Military’s P68M fuel purchase for ‘Yolanda’ relief irregular: COA

From Malaya Business Insight (Nov 12): Military’s P68M fuel purchase for ‘Yolanda’ relief irregular: COA

THE Commission on Audit has found numerous irregularities in the military’s procurement of “petroleum, oil, and lubricants (POL)” worth P68.65 million in 2013.

The sum was part of the P118.65-million Quick Response Fund (QRF) transferred by the Office of Civil Defense to the Armed Forces supposedly to support to the military’s efforts in “providing rescue, recovery, relief, and rehabilitation to victims of typhoon Yolanda.”

To effect the fund transfer, a memorandum of agreement (MOA) was executed between the OCD and the AFP in November 2013, wherein P50 million was transferred to the military from OCD’s QRF in 2012 and another P68,645,912 from the 2013 QRF.

The OCD issued a check dated Dec. 6, 2013 which the AFP acknowledged by issuing official receipt No. 1589058 dated Jan. 9, 2014, two months after Yolanda struck on Nov. 8, 2013.

From the transferred amount, the AFP released four checks in totaling P68,645,912 -- the exact sum drawn from the OCD’s QRF in 2013. Records showed P58,162,738.18 was paid to Petron Corp. as “payment for POL products” while the balance was listed as “payment of withholding tax in favor of Petron Corp.”

The transaction was approved through Resolution No. 34-2013 of the Government Procurement Policy Board authorizing emergency procurement by all agencies involved in disaster response.

Questions arose, however, after state auditors found that the mode of procurement for the POL was “repeat order.”

“Moreover, it was observed that the contract of agreement for the repeat order was approved on September 30, 2013, which was a month ahead of the approval of the MOA (between AFP and OCD),” the COA pointed out.

Three other supplemental contract agreements were left undated, preventing auditors from ascertaining actual date of approval.

Supporting documents to the original contract were also not submitted including general conditions, special conditions, schedule of requirements, technical specifications, notice of award, and notice to proceed.

COA required explanations from the AFP as to why the repeat order mode of purchase was used instead of emergency procurement; why the approval of the contract anticipated the fund transfer; and the missing supporting documents.

“Until the end of the year, however, no action was taken on the requirements,” auditors said.

Some of the required documents were later turned in to the audit team, during an exit conference on June 17, 2015 but there were still several that remain undelivered including authenticated copies of the notice of award and notice to proceed as well as delivery receipts.

“The regularity of the disbursement of P68,645,912 in the procurement of POL products out of the QRF could not be ascertained since the supporting documents were deficient and the mode of procurement was not in accordance with the memorandum of agreement,” the COA said.

http://www.malaya.com.ph/business-news/news/military%E2%80%99s-p68m-fuel-purchase-%E2%80%98yolanda%E2%80%99-relief-irregular-coa