More than a year after actor Cesar Montano resigned as chief operating officer of the Tourism and Promotions Board, the Commission on Audit is hot on his heels for alleged violation of the Procurement Law.
According to the COA, ‘Buhay Carinderia,’ Montano’s P80 million pet project under the TPB, has yet to liquidate its expenses, and was thus deemed funded in violation of Procurement law.
In a 2018 Audit report, state auditors said the TPB paid P80 million to contractor Marylindbert International Inc. without requiring the contractor to submit liquidation and utilization reports with supporting documents, such of official receipts, invoices and other pertinent documents, as proof of expenses paid in the preceding tranche before the release of the next additional tranche.
“Payments were based on the submission of documents/reports prepared by MII such as Calendar of Events and Media Plan, Program Flow, Forum Content, Exhibit layout and final creatives,” the COA report read.
“[In fact], TPB already paid a total of P80.640 million inclusive of VAT as of April 17, 2018 even without prior liquidation of the previous tranches paid as there was no previous stipulation in the MOA (memorandum of agreement) for the submission of liquidation/utilization reports with supporting documents.”
The COA also questioned TPB’s agreement with MII, as it wondered why the TPB had only required the submission of a Summary of Expenses and Disbursements at the end of the project, and did not require the contractor to provide other necessary supporting documents to establish the existence or completion of the project.
The COA also flagged TPB for failing to deduct five percent of the final Value- Added Tax or P3.6 million from MII, a clear violation of the the National Internal Revenue Code.
The TPB had envisioned Buhay Carinderia Program as a way to promote carinderia fare across the country.
The COA also expressed alarm over the cost of the Buhay Carinderia Program, as P50 million out of the total P80-million budget was spent on advertisements.
“The contract price for the project of P80.640 million plus VAT, was excessive as compared to other TPB project like the Madrid Fusion Manila 2017 with contract price of P43.417 million only,” COA said.
“The advertisement expenses for [Madrid Fusion Manila] amounted to P2.116 million or 4.87 percent, while Buhay Carenderia’s advertisements amounted to P50.152 million or 62.69 percent of the total project cost.”
Aside from its failure to explain how the program came to fruition, COA also noted that the Buhay Carinderia program started on the wrong foot because its P80 million budget was charged under TPB’s 2017 budget even if it was not included in the Annual Procurement Plan and Project Procurement Management Plan, a violation of the Government Procurement Act.
Also, the TPB’s Budget Officer certified in the Budget Utilization Slip that the TPB could only be funded out of TPB’s 2017 savings. In the end, TPB did not have any savings and even accumulated P256.14 million in overdraft expenses due to TPP’s inability to generate projected receipts for 2017.
The however argued that the Buhay Carinderia project was not covered by the Procurement law because its expenditures had been treated as a financial sponsorship undertaken pursuant to the TPB’s mandate to extend assistance to the private sector.
It also assured the public that it had implemented necessary courses of action to recover the funds released to MII, including sending demand letters to MII to refund the VAT and submit liquidation documents.
The TPB, however, admitted that MII has yet to comply with TPB’s request.
The TPB’s Finance Department also vowed to adopt additional safeguards to ensure that supporting documents necessary and other documents required under auditing and accounting rules and regulations were submitted before payments were effected and released prior to the disbursement of public funds.
Still, the COA said that even if the Buhay Carinderia project was not covered by the Procurement law, all expenditures of public funds needed to be supported with a budget which was not the case for the P80 million project.
Montano resigned as TPB chief in May 2018 after Tourism Chief Bernadette Romulo-Puyat ordered the suspension of Buhay Carinderia program over lack of public bidding.