Cebu City told to explain purchase of ‘overpriced’ KN95 masks
CEBU CITY, Philippines – The Commission on Audit (COA) has told the Cebu City Government to explain the purchase of ‘overpriced’ KN95 face masks.
In its 2020 Annual Audit Report for the fiscal year 2020, the state auditing body found out that the procurement of 20,000 pieces of KN95 masks that cost a total of P4.4 million was ‘in excess of the maximum retail price’ set by the Department of Health (DOH).
COA said the city incurred additional expenses up to P1,340,000 for the alleged overpriced face masks.
As a result, they recommended to City Hall executives to ‘be guided by the prices of essential emergency medicines and medical devices set by DOH during this COVID-19 health crisis to ensure that the government avail of the most advantageous price’.
According to state auditors, the city bought 20,000 pieces of KN95 face masks last April 2020 from Markabi Distributors Philippines Inc. at a cost of P219 each.
But the price tag was P67 more than what was mandated by DOH’s memorandum on price freeze, said COA.
“DOH Department Memorandum No. 2020-0144-A provided the updated list for the price freeze of essential emergency medicines and medical devices due to COVID-19. For KN95, DOH has set a retail price of P152 per piece,” they said.
“However, based on the DOH retail price, KN95 mask was only P152 each, hence an excess of P67 per piece of a total of P1,340,000,” they pointed out.
COA also said the supplier Cebu City chose for the procurement of the KN95 masks was not registered with the Food and Drugs Administration (FDA).
“Also, there was no proof showing that there was marketing scanning done by the City in compliance with GPPB (Government Procurement Policy Board) Circular No. 01-2020,” COA added.
Officials from the city government, based on the audit report, said the price set by the supplier they selected was ‘only reasonable’ since it also included delivery fees.
“The price set by DOH was on cash basis. Furthermore, it was only Markabi who was willing to deliver these items sans payment and the extraordinary high demand for the mast at that time. It was only on September 10, 2020 when these masks were paid and the DOH Memorandum is not applicable because the purchase took place prior to that Memorandum,” COA said, quoting the city government.
State auditors, in its 259-page 2020 Annual Audit Report for the City of Cebu, found at least eight significant observations, one of which was the procurement of these ‘overpriced’ face masks.
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