The Commission on Audit has flagged the Department of Information and Communications Technology for its P1.362 billion worth of free public Wi-Fi project.
State auditors said the financing agreement between the DICT and the United Nations Development Program in September 2018 vested full control and discretion to the latter over the entire funding for Pipol Konek free Wi-Fi Internet access in public places project.
Under the arrangement, the entire infrastructure—equipment, supplies and other properties—acquired from the government “contribution” would become part of the UNDP’s assets and under its disposal.
The DICT sent the UNDP a letter on July 30, 2018, “signifying its intent to engage with the latter as a development partner” in implementing the project.
“The Department entered into a financing agreement [FA] with the UNDP, placing at the latter’s disposal the contribution of P1,362,084,618.28 in two payment tranches: P700,000,000 on Sept. 25, 2018, and P662,084,618.28 on Jan. 15, 2019,” the report read.
CoA said Republic Act 10929 or the Free Internet Access Law allowed the DICT to tap the private sector in implementing the project.
It said the DICT’s arrangement with the UNDP went beyond the bounds of the law and underscored the requirement that the department should be the lead implementing agency.
Neither the bids and awards committee resolution nor the cost-benefit analysis showed that the DICT undertook an early procurement activity to form a basis for the decision to take on a private organization as a partner.
As of yearend 2018, CoA said 92.44 percent of the total budget equivalent to P1.259 billion had already been transferred to the UNDP.
One of the objectionable provisions in the financing agreement cited in the audit report was Article V stating, “Ownership of equipment, supplies, and other property financed from the contribution shall vest in UNDP. Matters relating to the transfer of ownership by UNDP shall be determined in accordance with the relevant policies and procedures of UNDP.”
“In essence therefore, the contribution of P1,362,084,618.28 by DICT constitutes donation to UNDP. And because the funds are now part of the “UNDP’s financial resources and are its assets”…, it appears now that the Pipol Konek becomes entirely a project of the UNDP and not of DICT,” CoA said.
“This partnership does not mean divestment of the project funds and properties. In fact… the DICT shall be the lead implementing agency that will oversee the effective and efficient implementation of the Free Wi-Fi Law,” it added.
It, however, clarified that while the government was “not categorically bound” to provide any additional funding, its refusal could only put the entire project in danger.
“By entering into the financing agreement with these provisions, DICT has bounded the Government to produce additional funds to be made available to the UNDP which are not yet appropriated by Congress,” it cited.
Based on the BAC resolution, Pipol Konek had set a target of 13,024 working sites by December 2018, but as of the third and fourth quarters of 2018 only preparatory works had been completed, such as the “assessment of technology options, drafting of procurement strategy, stakeholder mapping and advisory experts and consultants for support.
“Clearly, the target of 13,024 sites as at year end was not met,” the audit report said.
