Cebu City’s rice procurement, distribution questioned in COA report

CEBU CITY, Philippines — Cebu City’s procurement of rice for distribution to pandemic-struck households has been questioned by the Commission on Audit (COA) from the unqualified supplier to the unspecified beneficiaries.

The COA notes that the purchase of P67,376,600 were awarded to unqualified suppliers contrary to the Government Procurement Policy Board Circular (GBPP) No. 01-2020, stating that local government units (LGUs) must directly negotiate or procure from a legally, technically, and financially capable supplier, distributor, manufacturer, contractor or consultant.

In the review of COA, they found out that the procurement of “well-milled” rice was attributed to three suppliers: Best Buy Mart, Inc., Simon Industrial Products Trading Corporation, and Selchem Global Trading Inc.

The city procured a total of 3,000 sacks for P50 per kilo from Best Buy, 2,236 sacks for P25 per kilo and 9,100 for P50 per kilo from Simon Industrial; and finally 15,000 sacks for P50 per kilo from Selchem Global.

COA noted that Best Buy Mart is registered as general merchandise for non-essential wholesale and dress shop, Simon Industrial Products Trading Corporation is a wholesale and retailer for non-essential goods, and Selchem Global Trading Inc. is also a non-essential retailer and wholesaler.

“Meanwhile, the GPPB Non-Policy Matter Opinion (NPM) No. 126-2016, dated December 6, 2016, states that it is necessary for the BAC to determine whether the Mayor’s Permit and the BIR Certificate of Registration issued to the supplier authorizes it to engage in the business stated herein, such that a finding to the contrary would amount to non-compliance by the bidder and will result to its disqualification…”

“Despite the foregoing facts, the BAC recommended the award of the contracts to the said suppliers, thus posing risk on its quality, warranty, delivery, or service issues. Likewise, negotiation of the most advantageous price may not be achieved. Dealing with ineligible suppliers and non-observance of the law and rules and regulations of the procurement process render the transactions illegal,” said COA.

The city government explained that the 2016 Revised Implementing Rules and Regulations did not distinguish the type of business permit to be submitted by the bidders and what was emphasized that the bidder must have a business permit by the city or municipality where the principal place of business of the bidder is located to show that the bidder is operating a legitimate business.

Furthermore, the city argued that the three suppliers were the only businesses that were willing to transact with the city at a short notice with late payment.

“There was no more time to look for suppliers as its constituents were clamoring for rice due to the lockdown,” said the city in their explanation.

The COA recommended to the city to procure from legally, technically, and financially capable suppliers, distributors, manufacturers, contractors, or consultants.

The business permit must also be a necessary document to be submitted by the bidder so the city will be apprised of the nature of the business. The business permit must align with the transaction involved.

“What is then vital is the business permits which is similar to the nature of what was being procured,” said COA.

This is not the only discrepancy COA found in the city’s rice distribution as the state audit notes that P391 million disaster funds and P135.7 million Bayanihan Grant to Cities and Municipalities (BGCM), were not supported with a distribution list or recipients.

COA said that per records in the electronic budgets, the disbursements of these rice aid has not been properly accounted for.

The city claims that the City Accountant already furnished the distribution lists of the 2,000 sacks of rice distributed to Barangays Ermita and 1,000 sacks of rice to Barangay Bonbon.

However, COA notes that only 2 out of 29 barangays have submitted a list and 56,000 sacks of rice remain unaccounted for.

This time, the COA directed its order to the barangays affected urging them to submit the distribution list accordingly.

/rcg, bmjo

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