Findings No.5 COA Annual Audit Report 2004

July 25, 2008

5. The City General Services Office failed to completely and promptly submit to the Office of the Auditor the contracts for Build-Operate-Transfer Agreement for the Redevelopment of Carmen and Cogon Markets with a contract amount of P118,006,529.81 and P198,458,538.32, respectively, contrary to COA Circular No. 76-34, thus timely review and verification could not be undertaken.

COA Circular No. 76-34 dated July 15, 1976 states thus: “within five (5) days from the execution of a contract by the government or any of its subdivisions, agencies or instrumentalities, including government-owned or controlled corporations, for a public works of major repairs, improvement or construction, as well as those for public service and or furnishing of supplies, materials and equipment, a copy of said contract and each of all the documents forming part thereof of reference or incorporation, if any, such as the Advertisement for Bids, Instruction to Bidders, Abstract of Bids, Award General Conditions, Specifications, Proposal and Contract Book, Certificate of Availability of Funds, etc. shall be furnished the unit or agency auditor irrespective of amount. The Regional Director shall also be furnished a copy if the amount involved is more than P100,000.00. Aside from the unit or agency auditor the Commission Proper shall also be furnished a copy of the contract. This procedure also applies to supplementary agreements, change orders and extra work orders.”

The management is required by law and/or rules and regulations to furnish the head of the auditing unit with copies of contracts/ orders and supporting documents. This is designed to enable the auditing unit to perform its duties relating to the post-audit of the transactions at the most appropriate time and manner without in any way delaying or obstructing the implementation or prosecution of the project.

It is the task of the City General Services Office (CGSO) being the procurement office to notify the Office of the Auditor for the purpose of giving information with regards to the procurement activities of the city.

Review and analysis of contracts submitted by the agency disclosed that the CGSO failed to completely and promptly submit to the Office of the Auditor the contracts, together with all the supporting documents forming part of the Built-Operate-Transfer (BOT) Agreement between the City Government and UKC Builders for the Redevelopment of two (2) Markets located in the commercial complex of Barangays Carmen and Cogon-Poblacion of which the proposed cost of redevelopment amounted to P118,006,529.81 and P198,458,538.32, respectively.

As of December 31, 2004, the redeveloped Carmen Market is already operational while the Redevelopment of Cogon Market is almost done, but until this date the subject contracts were not yet submitted for review to the Office of the City Auditor.

In the event of any deficiency noted, the same may not be corrected immediately due to the delayed submission of contracts.

The City General Services Officer agreed and accepted the aforementioned finding during the exit conference.

Recommendation:

Require the City General Services Officer to submit immediately the required contracts.

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Written by admin · Filed Under Cagayan de Oro, Commission on Audit