COA tells MCIAA to explain discrepancies in Runway Overlay Project

MCIA /CDN File Photo

CEBU CITY, Philippines — The Commission on Audit (COA) has told airport officials of the Mactan-Cebu International Airport (MCIA) to explain discrepancies they found on the Runway Overlay Project.

COA, in its 2020 Annual Audit Report for Mactan Cebu International Airport Authority (MCIAA), found ‘erroneous and overstated cost’ in all segments of the Runway Overlay Project that led to variances amounting to P12.8 million.

They also flagged down the airport’s decision to spend around P1.3 million for support equipment for the multi-million project as ‘unnecessary and disadvantageous to the government’.

As a result, the state auditing body instructed MCIAA to shed light on the overstatement and erroneous cost, otherwise, they will have to direct all contractors that undertook the project to return funds amounting to a total of P12.8 million.

MCIAA spent around P264 million for the completion of all four segments of the Runway Overlay Project, but according to COA’s Technical Inspection Report, airport authorities should only spend around P251 million, amounting to a variance of approximately P12.8 million.

In accounting, variance is the term used to define the difference between the planned and actual amount spent.

In MCIAA’s case, state auditors pointed out the difference in costs found between the COA Technical Report and MCIAA’s Accomplishment Report.

“The objectives of the project inspection were to verify the existence of the project, validate the reported accomplishments, and determine compliance with approved plans and specifications. At the time of the inspection, the projects were already 100 percent completed and fully-paid,” COA said.

“As can be gleaned from the technical inspection reports of the Regional Technical Services Office of COA Regional Office No. VII, the Agency Reported (MCIAA) Accomplishments on the completed segments of the runway overlay project showed discrepancies when compared with the COA Verified Accomplishments Report aggregating ₱12,773,292.01,” they added.

MCIAA, in response, requested COA to furnish them the full COA Technical Inspection Report which the state auditors said ‘forms part of the Audit Team’s internal documents for audit purposes’.

“The noted variances contained in the subject COA Technical Inspection Report were quoted in toto in the issued Audit Observation Memorandum No. 2021-001 (2019-2020) dated April 06, 2021, addressed to Atty. Glenn Napuli, Acting General Manager (AGM) of the MCIAA,” COA said.

Airport executives also justified the need to purchase support equipment in order to expedite the completion of the Runway Overlay Project.

“It is well to stress that the fund allocation towards the support equipment is an essential part of the successful implementation of the project. The allocation of a separate budget for the equipment designated to be for the whole project enables (sic) definite and concrete insurance for the entirety of the project in case of bog downs,” MCIAA explained.

While they commended MCIAA’s decision to purchase standby equipment to ensure continuous implementation of the project, COA said the expenses for such strategy should be shouldered by the contractors.

“Having known of the risks related to that particular contract, each contractor was deemed to have accepted and was expected to be prepared against all circumstances in order to avoid such unfortunate possibility.  Hence, the cost of such preparation or risk preparedness should have been for the account of the contractor and not for the MCIAA to shoulder,” they added.

MCIAA is the government body co-managing and co-operating the Mactan airport.

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