The Commission on Audit (COA) has given the Land Transportation Office (LTO) until February to address the payment discrepancies amounting to P1.272 billion for its P8.2-billion road infrastructure project under the Land Transportation Management System (LTMS).
The COA warned the LTO, along with its information technology provider (IT), of possible disallowance of payments should they fail to address the discrepancies.
“Items suspended in audit, which are not settled within 90 days from receipt hereof shall become a disallowance pursuant to Section 82 of Presidential Decree 1445 and COA Circular No. 2009-006 dated September 15, 2009, prescribing the Rules and Regulations on Settlement of Accounts,” COA stated in its Nov. 29, 2024 letter to the LTO.
The state auditors cited its decision to suspend the audit on several questionable items on the LTMS project between 2019 and 2022 over the LTO’s failure to submit its response to the Audit Observation Memo (AOM) on various deficiencies involving non-compliance with applicable laws, rules and regulations, non-conformance with the contract requirements and incomplete submission of relevant supporting documents.
“The audit team has yet to receive the complete compliance and/or justifications from the (LTO) management on these noted observations/issues on the aforesaid AOM. On May 21, 2024, and November 26, 2024, the audit team issued two follow-up letters to the LTO but still no response has been given as of this date, hence, the issuance of this Notice of Suspension,” the COA said.
It also asked the LTO and its German IT provider, Demalog, to explain the non-compliance of the IT company in providing three redundant internet lines with a bandwidth of 200 Mbps each for the LTO data center, saying Dermalog only provided 80 Mbps for each bandwidth.
Moreover, the Commission questioned the non-compliant features of the driver’s licensing system, including failure to provide interoperability in government information and communications technology; inability to publish generated reports on the LTO portal; non-compliance observed in other core applications of the LTMS, such as revenue collection system, motor vehicle inspection and registration system, and law enforcement and traffic adjudication system.
COA, in a 2023 audit report, revealed that the LTMS remained to be fully unutilized due to system issues.
Earlier, the COA ordered ex-LTO chief Edgardo Galvante, who approved the payment for Milestones 1 to 13 and certificates of acceptance for the LTMS project, to comply with the submission of the required documents.