WHEN a local government buys school supplies, it's usually routine business. But what happens when a P59 million purchase of T-shirts is riddled with inconsistencies, from missing inventory to contradictory delivery dates?
The answer, as illustrated by a recent audit in Cebu Province, is a serious questioning of the fundamental principles of public accountability and procurement integrity. This isn't just about cotton shirts; it's about safeguarding taxpayer money and ensuring that government contracts are fair, transparent and legally executed.
The audit report
The Commission on Audit (COA) recently flagged the Cebu Provincial Government's payment of P59,056,522 for white round-neck T-shirts intended for students in School Year 2024-2025. This payment was part of a larger, P114 million contract. COA cited numerous irregularities concerning documentation, delivery and a possible violation of procurement rules under the administration of former governor Gwendolyn Garcia, in breach of laws like Republic Act (RA) 9184, or the Government Procurement Reform Act, and Presidential Decree 1445.
This audit report brings into sharp focus the perennial challenge of procurement transparency in the Philippines. Government spending, particularly at the local level, is governed by strict rules designed to prevent fraud, waste and favoritism. These rules mandate open bidding, meticulous documentation and rigid adherence to contract terms.
When auditors note issues like discrepancies in inventory, contradictory paperwork and questionable supplier authorizations, it suggests systemic weaknesses in internal controls. The audit on the T-shirt purchase, while focused on one transaction, falls into a broader pattern of scrutiny where the regularity and authenticity of government transactions are being tested, forcing local government units (LGUs) to defend their spending decisions.
Why it matters
The irregularities flagged by COA directly affect ordinary Cebuanos in several ways:
During the exit conference of the audit findings, the provincial treasurer attributed some noted discrepancies, such as in the dating of documents, to a "clerical error" committed by the receiving personnel and committed to providing a full written reply to the audit team.
However, COA's perspective is that the multiple inconsistencies -- including the erased signature on one Acceptance and Inspection Report (AIR), deliveries made at the Capitol instead of the contractually mandated Provincial General Services Office (PGSO) Motor Pool Warehouse and signature variations on supplier documents -- "could raise concerns regarding the authenticity and regularity of the transactions." COA remains firm that the audit team is still waiting for the full explanation from Cebu Province management to evaluate the regularity of the P59 million payment.
Auditors discovered multiple mismatches between reports. The AIR showed 500,479 T-shirts delivered, yet the warehouse report only accounted for 466,551, resulting in an unaccounted difference of 11,903 T-shirts. A separate issue was an unexplained difference of 182,372 T-shirts between the issuance records (Requisition and Issue Slips) and the AIR. COA also pointed out that acceptance and inspection must be properly documented and contract amendments, such as delivery extensions, must be formally executed and mutually agreed upon in writing.
The contradiction in delivery
The audit revealed a request from the supplier for a 15-day delivery extension on Aug. 12, citing a shortage of raw materials. However, records show that deliveries were made on both Aug. 12 and Aug. 15, directly contradicting the supplier's stated reason for needing the extension. Some deliveries were also made after the extended deadline of Aug. 31, but no liquidated damages were imposed on the supplier, as required by procurement rules.
Concerns over the bidding process
One of the most serious red flags involved the supplier's authorization documents. The Secretary's Certificates authorizing the supplier's representatives to bid were dated Sept. 13, 2022, nearly two years before the Invitation to Bid was officially issued on May 21, 2024. According to COA, this "raises a significant concern... implying that the winning supplier might have had prior knowledge of the bid opportunity well before its official announcement." This suggests a potential breakdown in the integrity of the open bidding process.
Issues with supplier signatures
COA also flagged varying signatures of a key supplier representative (Representative B) across crucial documents like the contract, performance bond, indemnity agreement, disbursement voucher and official receipt. Furthermore, while the contract named Representative A as the authorized signatory, Representative B signed on his behalf, without having explicit written authority to do so. COA stated that the signature variations "raise serious concerns regarding their authenticity and legitimacy."
Recommendation
The immediate focus is on the response from the Cebu Provincial Government. COA has formally recommended that the Province submit explanations for all discrepancies, provide the list of T-shirt recipients and furnish a government-issued ID of Representative B to verify the authenticity of the signatures. Until management provides a complete written response, the regularity of the P59 million payment remains under COA's evaluation. The outcome of this audit will determine if the matter is closed with remedial action or escalated for further investigation into potential administrative or criminal liability. / CDF