THE Lapu-Lapu City Government has been told to recover the P3.239-million it paid to a contractor, after the latter failed to repair a City-owned equipment.
If the City fails to recover the funds, the Commission on Audit (COA) said that the persons responsible for the release will be required to refund the amount.
In an audit report for 2016, the state audit said that the City made an advance payment equivalent to 90 percent of the P3.599-million contract cost for the repair of an LG2H model Mitsubishi road grader even if the contractor failed to deliver its service.
The amount was taken from the City’s disaster risk, reduction and management fund.
State auditors said that it was also considered uneconomical and unnecessary since the equipment had been unserviceable for more than 37 years and had only a value of P426,412.50.
The City Legal Office told COA that Mayor Paz Radaza has ordered an administrative investigation against the personnel involved in the preparation of the advance payment.
Through a public bidding, the City Government procured its contract with SSVF-ADD Trading for the repair of the road grader’s engine and chasis with a contract cost of P3.599-million.
The repair was expected to be completed last Nov. 17, 2015, after the contractor received the purchase order last July 20, 2015.
According to the COA, the contractor submitted a letter request for 30 percent advance payment amounting to P1.079-million to Lapu-Lapu. Radaza approved the request and the payment was made on Oct. 14, 2015.
When COA reviewed the City’s transactions, the contractor submitted an undated letter requesting another 60 percent payment or P2.159-million, and informed the City Government that the repair was 90 percent complete.
Lapu-Lapu then paid the said amount last January 4, 2016.
“It was also noted based on the submitted copy of an unsigned inventory of equipment made as of Dec. 31, 2002 that the subject road grader for repair was acquired between years 1963 to 1991 and was transferred/received as unserviceable from the DPWH on April 20, 1979 with a total value of P426,412.50,” the report stated.
The city accountant admitted to COA that she was not aware of the legal prohibition as regards to the first advance payment.
As to the second advance payment, it was “contested and treated by her (the accountant) office as actually a progress billing, considering that it was supported with the inspection and acceptance report on the repairs supposedly made as noted by the pre-audit section.”
COA submitted a notice of disallowance to Lapu-Lapu on Jan. 18 this year. (FMG)