COA bares Capitol delay in reporting ‘blacklisted’ supplier

By Florence F. Hibionada

A Capitol purchase of a medical equipment validated to have been irregular and fraudulent presented yet more problems for government auditors.

This, as a long standing order to blacklist the erring Capitol supplier was discovered to have been unheeded and left unreported to the Government Procurement Policy Board (GPPB). The GPPB is the country’s governing body on all dealings using public funds. Blacklisted suppliers, contractors and companies are reported here so a ban and prohibition on future government projects will be in place.

The discovery formed part of the “significant findings” of the Commission On Audit (COA) in its latest Annual Audit Report (AAR) on the financial operations of the Iloilo Provincial Government.

Valued over P1.3 million, irregular and fraudulent was then the conclusion reached on the procurement of 1 unit Autoclave Sterilizer. The equipment was for the Don Valerio Palmares Sr. Memorial District Hospital in Passi City.

Irregular and fraudulent primarily after COA discovered that there was collusive bidding on Capitol suppliers Pacific Trade House and CDC Pharmacy. Worse, the person who received the check for payment of the winning supplier – Pacific Trade House - turned out to be the same authorized representative of the losing company, CDC Pharmacy. One Ma. Cherry D. Alaban was identified by COA as the common denominator and easy give-away that established fraud and irregularity in said Capitol purchase.

Similar blatant discovery on the Delivery Receipt of the winning supplier that when also verified, showed the same Tax Identification Number (TIN) traced to a Dionie Trading owned by the losing bidder.

Same authorized representative and same TIN were just too much for the COA to disregard and too easy to establish fraud.

And yet it did not stop there. The unit when also delivered and inspected was locally fabricated, a complete deviation from what was ordered and paid for.

“It was also found out to be defective,” the COA noted with promised Capitol action to resolve the problem.

Yet none was done at the time COA concluded its work thus the issuance of Notice of Suspension and eventually, Notice of Disallowance. Legal action was also pushed among which was the issuance of Blacklisting Order No. 2009-001 in May 2009.

Ordered blacklisted were Diosdado del Castillo, his spouse Connie del Castillo, Alaban, CDC Pharmacy, Dionie Trading, Mercedes Sibug, Pacific Trade House “and any other enterprise that they might form to prevent them from transacting business with Iloilo Provincial Government.”

As of June 22nd though, COA noted that no such transmission of the blacklist order was made to the Government Procurement Policy Board (GPPB).

“It is recommended by the COA-TSO that the unit delivered be replaced. However, due to the presence of fraud in the procurement process, we recommend for the return of the unit and the subsequent refund of its cost. Further, it is recommended that sanctions be imposed upon persons liable for the irregularity… Since time is of the essence, the BAC is urged to transmit the blacklisting order to the GPPB as soon as possible for proper dissemination,” excerpts of the report went. COA’s “TSO” is the Technical Service Office.

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