Facility will be used as personnel training center, can be rented out: Ports Authority

MANILA - The Commission on Audit has flagged the construction of a P10.835-million infinity pool and additional room in the Ports Management Office-Northern Luzon of the Philippine Ports Authority in San Fernando City, La Union.

This as the PPA said Monday it has finished the renovation of its training facility in the city with "capacity-building initiatives to reduce cost" and with potential to earn revenue from rental fees.

In COA's 2020 audit report on the PPA, government auditors said that the construction of the infinity pool and additional room in the Training Center Compound of the PPA was “unnecessary” as it had caused the demolition of a newly built canopy and perimeter fence, resulting in “improper and wasteful” spending of public funds.

The auditors noted that the PPA is mandated to develop and operate a rationalized national port system in support of trade and national development.

“If the construction of the said structures was a prerequisite for at least the PMO-NL to realize the institutional vision, prudence and diligence would dictate that these expenditures and structures were unnecessary as these seem neither justifiable nor responsive to the exigencies of the service,” the auditors said.

The PPA management, as quoted in the audit report, justified to the auditors that the improvements were undertaken to increase customer influx that would result in higher non-traditional income.

“During the exit conference, management reiterated the need for such structures to avoid incurring higher costs of conducting Port Executive Conference and health and wellness programs, meetings, trainings and conference in expensive hotels. It also restated the possible increase in income by raising the rental fees of its facilities,” the auditors said.

The auditors however insisted that the TCC, while generating a gross income of around P700,000 for 2018, also incurred around P750,000 in electricity costs alone.

The audit team stressed that it recognizes the purpose of having and maintaining a training center but that existing structures as well as other improvements done were deemed more than sufficient for the needs of the agency.

“Despite the adequacy of the facilities and amenities, management still pursued the construction of new structures without any supporting feasibility study, and seemingly, without regard for value-for-money,” the auditor said.

The audit team also recommended that the PPA management take action against accountable officers.

“We recommended that Management hold the approving officers liable for the unnecessary expenditures,” the auditors said.

But the PPA management was insistent on the necessity of the improvements in the training center which they said can also be used for local, national and international trainings and conferences.

“Though it is not our mandate, on the other hand, it could help generate additional revenue,” the PPA management told the auditors in a letter-reply.

“As an audit rejoinder, if the given justifications of the management were to be accepted, then all government agencies, especially corporations, would be allowed to put up facilities and amenities as long as their budget permits, even if the uses or purposes of said projects are not within their mandates,” the audit team stressed.

The PPA management said Monday it has completed the renovation and improvement of its training facility in La Union.

The facilities can also be a "source of income from rental fees" as it will be made available to other state agencies, local governments, and the private sector within the region for their events, said PPA General Manager Jay Santiago.

“Annually, PPA is spending a significant amount of its budget in paying for rental fees on venues for organizational events, conferences, and planning sessions, among others,” Santiago said in a statement.

"With this improved training facility, it will provide the agency further financial flexibility as most training, events, conferences, and the like requiring offsite venues can now be held in the agency-owned training facility."

He added that the renovation of the training center was accelerated after the PPA converted its Manila Gender and Development facility into a COVID-19 molecular testing laboratory during the pandemic.

A copy of the COA report, which can be downloaded from the COA website, was received by the PPA Board of Directors and General Manager Jay Daniel Santiago on July 22.

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