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Friday, August 24, 2007
P7.9 million advance to CICC contractors ‘irregular’
CEBU CITY -- The Cebu Provincial Government disbursed at least P7.9 million as advance payment for suppliers of goods used for the Cebu International Convention Center (CICC).
That, according to the Commission on Audit (COA), violated the Local Government Code.
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Section 338 of the code states that no money shall be paid on account of any contract under which no services have been rendered or goods delivered.
In a memorandum, the Office of the President has also said advance payments shall be made only after prior approval by the President, and shall not exceed 15 percent of the contract amount, unless otherwise directed by the President.
Government auditors found that the Provincial Government granted 15 percent advance payment or “mobilization funds” to suppliers of goods, like kitchen equipment, carpets and closed-circuit television systems, among others.
The advance payments were to be deducted from progress payments.
“However, records at the accounting departments as of December 31, 2006 showed that some of the advance payments granted were not fully recouped from progress payments to suppliers,” the audit report states.
The Provincial Government has explained to the commission that the procured items were urgently needed to complete the Cebu International Convention Center in time for the Asean Summits.
The Province also assured that advance payments shall be discontinued in the current year.
Businessman Crisologo Saavedra, who has alleged that the CICC transactions were anomalous, said the nearly P8-million advance payment is very minimal and may have not covered all the contracts off the CICC.
COA recommended that the pre-audit section should see to it that advance payment on the procurement of goods, supplies and materials should not be passed without prior approval from the President.
Exemptions from this rule are payments for hotel and restaurant services, use of conference, seminars and exhibit areas, lease of office space and procurement of goods for contingencies arising from natural or man-made calamities in areas where a state of calamity has been declared.
The CICC was built primarily for Cebu’s hosting of the Association of Southeast Asian Nations (Asean) Summit last January.
Garcia and some officials have been charged before the anti-graft office by Saavedra for alleged anomalous transactions for the CICC.
The Provincial Government has spent some P600 million for the project, and Garcia admitted that there will be more expenses in the future for the reconfiguration of the building.
Activities have been booked at the CICC until January next year. (MBG of Sun.Star Cebu)
For more Philippine news, visit Sun.Star Davao. (August 24, 2007 issue)
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