Pavia’s splitting of govt contracts ‘disadvantageous’ – COA

By: Gerome Dalipe

STATE auditors questioned the move of the Pavia Municipal Government in Iloilo in splitting government contracts for the purchase of various information and communication technology equipment amounting to P232,650.

The Commission on Audit (CPA), in its report on Pavia’s financial transactions in 2018, said the municipal government may have “circumvented” the public funds when it opted to split the contracts for the purchase of communication equipment.

The practice violated Sec. 54 of the revised implementing rules and regulations of Republic Act 9184, otherwise known as the “Government Procurement Reform Act, auditors said.

Sec. 54 of RA 9184 states that splitting of government contracts means “the division or breaking up of contracts into smaller quantities and amounts…for the  purpose  of  evading  or  circumventing  the  requirements  of law  and  this IRR, particularly the  necessity  of competitive  bidding and  the  requirements  for  the alternative methods of procurement.”

In their annual report, the auditors said there was an indication the Pavia municipal government resorted to the splitting of contracts in the purchase of communication and technology communication equipment in 2018.

Thus, the auditors held the municipal government would have circumvented the funds when it skipped public competitive bidding as the general mode of government procurement.

The public biddings aim at providing assurance that the purchase price is advantageous to the government, the auditors pointed out.

The auditors urged the municipal mayor to direct the concerned officials and employees to be “meticulous and judicious” in the preparation of their Annual Procurement Plan.

This is to ensure the procurements made by the municipal government are properly planned and executed, and that the procurements done via alternative methods will not result in splitting of government contracts.

Apart from splitting of contracts, the auditors also scored the municipal government for granting the contractors’ advance payment for various infrastructure projects.

The advance payments were granted despite the absence of a guarantee bond, pursuant to the provisions of the Government Procurement Reform Act.

“Hence, it exposes the municipality to possible losses if the contractors fail to meet its contractual obligations,” the COA report read.

The auditors instructed the municipal accountant and all officials concerned to ensure that the disbursements for advance payments to contractors are duly accompanied by a bond.