COA quizzes Ombudsman

WITH power, function and duty, among others, to “determine the causes of inefficiency, red tape, mismanagement, fraud, and corruption in the Government and make recommendations for their elimination and the observance of high standards of ethics and efficiency,” the Office of the Ombudsman is fairly expected to be the exemplar in all its transactions involving public funds.

But two Commission on Audit (COA) reports on the Ombudsman in 2008 and 2009 raise doubts about whether the Office is setting a good example, listing rather critical observations on how the Ombudsman spends taxpayers’ money. Among other findings, the reports noted:

  • The unliquidated cash advances of the Ombudsman remained in the millions – from P1.01 million in 2005, P6.27 million in 2007, P4.65 million in 2009. COA Circular No. 97-002 dated February 10, 1997 that serves as a guide in the granting, handling, and liquidation of cash advances provides that no additional cash advance shall be allowed to any official or employee unless the previous cash advance given to him or her is first settled or a proper accounting is made. As well, a cash advance shall be reported on as soon as the purpose for which it was given has been served.The Office seems to have acted promptly and in 2009 reported that the audited outstanding balance of cash advances as of December 31, 2009 has been reduced to P416,420.55 as of April 30, 2010.
  • The Ombudsman exceeded its Security Services Contract by P10.96 million. From May 2008 to May 2009, the Ombudsman’s Central Office (Manila) paid Variance Protective and Security Agency Corporation (VPSAC) a total of P30.05 million instead of the contract amount of P19.09 million only.COA said the difference was due to the payment of additional post assignments and payments based on the number of hours rendered and not on the semi-monthly installment amount as provided in the contact.From 54 post assignments, around 38 more were billed by the security agency and paid by Management since the contract’s start. Payment was also based on the number of hours rendered for the period and not the semi-monthly instalment amount of P795,270.00, more or less, as provided in the contract.In the same report, the Office’s management explained that the computation should be based on the Philippine Association of Detective and Protective Agency Operators (PADPAO) Inc. monthly rate of P28,402.50 per security guard rendering seven days a week for 12 hours per day. Rate per hour (P78.90) multiplied by the total number of hours rendered in a month by the security guards is the amount paid by the Office of the Ombudsman to VPSAC; irrespective of the postings or assignment of the guards and of whether a guard has served for five or seven days a week. “Thus, in effect this spelled savings on the part of the Office since payment was made based on the actual number of hours served,” the report said.But COA said post assignments for a five-day schedule should be segregated from the seven-day schedule. “(T)hese assignments should be adhered to considering these were management’s prerogative,” it said, “otherwise, these provisions will be put to naught.”Moreover, said COA, the original contract amount should have been P16,218,011.88 instead of P19,086.480.00, based on the current PADPAO rates. Any additional services should have been billed and paid separately. COA’s Technical Services Office maintained its position notwithstanding justification from the Ombudsman.
  • The Ombudsman’s Office-Visayas spent an “extravagant and excessive” sum of P178,566.50 on a day-long seminar cum physical fitness event for 70 employees in 2008.COA said OMB Visayas breached the budget ceiling allowed per employee-participant in agency-organized seminars when it incurred expenses of P178,566.50 for a one-day yearly assessment, mid-year planning and physical fitness activities in uppity Alegre Beach Resort in Cebu in 2008.The COA called the expense “extravagant and excessive,” and P94,566.50 in excess of the ceiling allowed in Section 25, General Provisions of R.A. No. 9498, which is only P84,000.00 (70 employees-participants x P1,200).“It could not pass the test of prudence or the diligence of a good father of a family nor supportive of the implementation of the objectives and mission of the agency relative to the nature of its operations,” the COA said of the day-long seminar.The next year, in the 2009 COA report, the Ombudsman’s Office in the Visayas justified the one-day event by noting that it was composed of two major activities: one, the yearly assessment aimed at reviewing and formulating human resource development and training programs, and the other, the mid-year planning and physical fitness. For the yearly assessment and mid-year planning, it said it incurred expenses reaching P92,589.00. For the physical fitness program, it spent P85,977.50. Total expenses:  P178,566.50.But while OMB Visayas argued that it managed “to maximize its resources considering that it conducted two main activities in one day,” it also made reference to the Office’s “fiscal autonomy” and its prerogative in deciding how best to inspire its investigators “to achieve aggressive prosecution of cases and assessment…(and) greatly contribute to the prompt investigation of cases.”

    “After a rigid and thorough assessment and planning, the OMB personnel did some unwinding and indulged themselves in sports and physical fitness activities,” the Ombudsman explained. “The conduct of said activities aimed to promote sportsmanship, respite, camaraderie, and health consciousness among the Visayas sector employees.”

  • The Ombudsman Visayas failed to comply with certain rules of the Procurement Law when it signed agreements in 2008 on the “rental” of photocopying machines with two private contractors in Cebu through “shopping” and not bidding.COA was referring to OMB Visayas’s separate agreements with Max Copy Center (expired May 31, 2008) and with U-Bix Corporation (signed Jun. 6, 2008), on the Ombudsman’s supposed rental of their photocopying machines. The year-long contract with Max Copy involved a rental fee of P319,200 for three machines, or P26,600 per month, while the year-long contract with U-Bix involved a rental fee of P264,000 for four machines, or only P22,000 per month.COA reminded the Ombudsman that the law requires competitive public bidding, as a general rule, and that alternative methods of procurement may be resorted to only in highly exceptional cases. The Ombudsman’s practice to go “shopping” for services defeated the principle of competitiveness envisioned in the law and prevented the government from getting the most advantageous rental costs, it said.
  • The Ombudsman Central Office spent millions on livelihood seminars and vaccination programs for employees, despite the absence of a Gender and Development Plan, or even a Gender and Development Committee.In 2009, the Office spent its funds set aside in law for Gender and Development (P4.38 million on vaccine administration and P342,362.80 on livelihood seminars for employees) even as “the management has not yet formulated a GAD Plan for the OMB that would set the tone and direction of the Central Office together with its sectors.” It was only in 2010 that the Ombudsman issued an order creating its GAD Focal Point Committee.
  • The Ombudsman Central Office enrolled inadequate data in its Annual Procurement Plan (APP) while the Ombudsman Mindanao Office had not submitted such a plan in 2009. These are requisite documents under the Procurement law, designed to reflect the entire procurement activity that an agency plans to undertake within the calendar year.COA found that the purchases/contracts made by the Central Office in 2009 were not consolidated and finalized by the Bids and Awards Committee (BAC), triggering two bad results: some purchases and projects carried out by the Office were not included in the 2009 APP, while some of those included were not implemented.For instance, the COA observed “much delay” in the procurement of equipment, supplies, and materials, including P1.46 million of office supplies, for the last quarter of 2009 that underwent bidding only on March 10, 2010.COA noted: “Obviously, 4th quarter or the period October to December, 2009 has since passed and the Office continued its operation without the need of these supplies and materials. Since it was already halfway of the 1st quarter of CY 2010, supplies and materials that should been procured by that time should be the office requirements for the 2nd quarter or the 2nd semester of CY 2010.”Lamenting the lack of a well-planned and timely prepared APP among others, COA observed, “The Office would have generated more savings if timely purchases were made considering persistent increase in the costs of goods.”

Two foreign donor-funded projects for the Ombudsman also drew COA’s attention.

In 2008, COA found that the Case Monitoring System (CMS) developed by Fujitsu Philippines, Inc. for the Office of the Special Prosecutor (OSP) had been inoperative for two years already, “thereby depriving the agency much needed improvement/enhancement in case preparation/management of its prosecutors.”

The auditing body recommended the management to exert extra effort to ensure that Fujitsu comply with its obligations and commitment to install an operational CMS to prevent wastage of government funds and for the agency to reap the benefits of a computerized case management/monitoring system.

In a letter dated April 6, 2010, the Office’s management said the OSP was engaged in talks with NEWGEN, the sub-contractor hired by Fujitsu to develop the CMS. It also said: “Due to the importance given by Ombudsman Gutierrez to resolve the issues regarding CMS, Overall Deputy Ombudsman Orlando C. Casimiro and members of the Office of Legal Affairs of the Office of the Ombudsman were tasked to facilitate these meetings and expedite the process of resolving the matters involving the CMS.”

Finally, COA noted that the Ombudsman’s property officer had not properly documented

the equipment and facilities, worth about $6.5 million in all, that had been provided from 2006 to 2006 under the United States’ Millennium Challenge Corporation-Philippine Threshold Program.

“It was incumbent upon the Property officer to conduct physical count of the equipment, obtain documents evidencing the donation and receipt thereof and prepared a report,” COA said. “However, inquiry from the property officer disclosed that a physical inventory… was not conducted because the documents pertaining to the donated properties were not turned over to the Property section.”

Worse, the COA said, “some of the equipment were already transferred to other sectors without the required physical inventory-taking and documentation such as the Inspection Report and the Acknowledgement receipt for Equipment.” These materials, which MCC program manager Carlos Gavino had turned over to Ombudsman Merceditas N. Gutierrez in 2008, included “investigative tools, communication devices, more than 80 CD copies of the Ombudsman Legal Resource Book on Public Accountability and Lex Libris law and jurisprudence; various IT equipment totalling P1,786.875.00, and 70 units of personal computers.” – PCIJ, February 2011