COA: PCOO officials must be charged for ASEAN Summit procurement irregularities

Adrian Ayalin, ABS-CBN News

Posted at Jul 20 2018 01:46 PM | Updated as of Jul 20 2018 06:38 PM

MANILA - (UPDATE) The Commision on Audit has recommended the filing of charges against officials of the Presidential Communications Operations Office (PCOO) for irregularities in procurement of goods and services used for the Association of Southeast Asian Nations Summit last year.

Government auditors said in the 2017 audit report on the PCOO that the agency awarded contracts to suppliers without adhering to the provisions of the Government Procurement Act.

“We recommended that management file the appropriate charges against any erring officials, as prescribed under Section 65.1 of the Revised Implementing Rules of Republic Act No. 9184, for taking action that favored a particular supplier/s,” the COA said. 

Among those flagged by government auditors on PCOO, currently headed by Secretary Martin Andanar, were contact costs for handmade soaps from three suppliers which were higher than the approved budget of P758,000.

Printing contracts and powerbank supplies contracts were also awarded to companies even if there were lower quotations, causing unnecessary expenditures of P2.071 million and P2.488 million. 

Government auditors also questioned the rental of Information Technology (IT) equipment worth P4.039 million when buying the said equipment could have saved the government P964,872.

Through inquiries with other suppliers, equipment such as Apple MacBook Pros, MacBook Airs, Dell laptops, Lenovo Yoga 300, Desktop Apple Mac, Sony cameras and lenses, Canon cameras and lenses could have been bought for only P3.074 million.

“Management decided to rent/lease the IT equipment, hence the agency expended more, and ownership of the items was not retained, to the detriment of the government as a whole,” the COA said.

The PCOO however told government auditors that renting the equipment was their only option.

“Management commented that the PCOO was constrained by the budget, which was programmed by Congress and granted to the agency, to perform ASEAN 2017-related function. No budget was allotted for capital outlay. Without realignment, the PCOO cannot purchase any equipment, thus, was compelled to lease equipment to address specific IT-related requirements for ASEAN event,” the COA said.

Government auditors also flagged purchase orders and payments for various goods and services amounting to P27.503 million and P7.264 million van rentals also for the ASEAN Summit. 

According to the COA, the PCOO resorted to “splitting” to circumvent rules such as public bidding which is required for purchases worth P1 million and above.

The contracts worth less than P1 million were for delicacy bags, handmade soaps, medical kits, dry-fit shirts, ASEAN jackets, media handbooks, wifi access, powerbanks and chargers, and VIP passenger van rentals for events in Metro Manila, Tagaytay and Clark, Pampanga. 

“Resorting to splitting deprived the agency of the opportunity to take advantage of possible bulk discounts or lowest responsive offer if the procurements were done through public bidding,” the COA said. 

The PCOO emphasized that their hands were tied as they were only notified of their events one or two weeks before.

Also in the audit report, PCOO travel expenses ballooned to P162 million in 2017 from P30 million in 2016, due to foreign and local travels of President Rodrigo Duterte and the ASEAN chairmanship of the Philippines. 

Communications, office supplies, rental expenses, and other maintenance and operating expenses also increased, at P99.679 million, P59.553 millioin, P771.879 million, and P120.020 million in 2017, also because of the ASEAN Summit. 


The PCOO is investigating at least 5 officials over the allegations of anomalous contracts for the procurement of services and supplies for the summit, an official said.

The office reconstituted its two Bids and Awards Committees in February and replaced their respective chairpersons, in response to reports of alleged indiscretions in the procurement process, said Undersecretary Gatpayat, reading from the department’s official statement.

“On March 2018, the PCOO received Audit Observation Memorandums (AGMs) on the aforementioned procurement irregularities. As ordered by the Secretary, the PCOO Legal Department is conducting an investigation on the matter. Show cause memorandums have been issued and an investigation report is forthcoming,” he said.

The official did not directly answer the COA’s audit report, saying that the concerned PCOO officials have submitted their response to the agency.

“Rest assured we are going to investigate it. We will find out if indeed there were irregularities. If indeed there were violations. We will identify who these people are, and will make sure that this will not happen anymore,” Gatpayat said.

“We are willing to file charges if indeed there is evidence to support it,” he added.

Gatpayat said that the results of the PCOO’s internal investigation may be released to the public in 10 days time.