Findings NO.7 COA Annual Audit Report 2005

July 25, 2008

7. Purchase of 133 heads of goat totaling P159,600.00 was not in accordance with specifications called for in the Purchase Request and Purchase Order. As a result, the City Government expended more money to rehabilitate the moderately inferior health status of said animals after delivery because these were unfit for dispersal as envisioned by the goat dispersal program.

Specifications refers to technical description of supplies or property being requisitioned or ordered, which should be clear and complete, including if necessary, the specific uses thereof and how acceptability thereof can be determined.

Purchase Request dated December 29, 2004 and Purchase Order No. 10-05-01-17 dated February 22, 2005, requisitioned and ordered for 121 heads of Female Breeder Goat and 12 Male Breeder Goat or a total of 133 heads. This was paid under disbursement voucher no. 464 in favor of Mr. Bienvenido Jamis for P159,600.00.

Purchase Order is a contract between the local government and the suppliers or dealers for the delivery of supplies at a stipulated amount and includes, among others, quantity, period and mode of the delivery, unit and total price per item, and mode of payment.

Records showed that no Acceptance and Inspection Report was made and attached to Disbursement Voucher No. 464 but still this transaction was paid by the City Government. Records also showed that instead of the ordered delivery of 133 heads of goat requisitioned, 141 heads were delivered to compensate for the non-compliance of supplier to the specification required in the purchase order.

Interview conducted with the head of the City Veterinary Office, the end-user of this requisition, disclosed that he did not sign the acceptance of the delivered goats because these were not in accordance with the specification called for in the requisition.

A certification dated July 27, 2005, relative to the delivered goats was issued by Dr. Al G. Gonzales, City Veterinarian/End-User, this City, and we quote:

“This is to certify that 101 heads of goats were delivered at the City Stock Farm on March 22, 2005. The balance of 32 goats was delivered on April 22, 2005. That 121 heads of said animals were female and 12 were male. The said goats were classified below according to age and weight, to wit:

No. of Heads

WeightEstimated Age385-7 kgs.4-5 months608-10 kgs.6-9 months35More than 10 kgs.10 mos. & older

That an additional 8 female goats were included in the April 22, 2005 delivery which weighed more than 10 kilos each. This brought the total number of female goats delivered to 129 heads. The final number of goats relative to its classification based on weight was as follows:

No. of Heads

WeightEstimated Age385-7 kgs.4-5 months608-10 kgs.6-9 months43

—–More than 10 kgs.10 mos. & older141

===

This is to further certify that during the canvass of prices, the City Veterinary Office was not informed hence not represented to evaluate the quality of stocks the suppliers intend to sell to the City Government. This Office was not also given the privilege to choose the stock to be delivered by the supplier, Bienvenido Jamis, who quoted the lowest price. It was a practice in previous livestock procurements, that the City through the City Veterinary Office evaluated the quality of stocks during canvass of prices and chooses the stocks to be delivered to protect the interest of the City.

That the said goats are not of breeder quality and upon delivery, many were too small, some were old and many were thin.

That this certification is issued to rectify errors in the certification issued last April 7, 2005 and provide more details on the delivery.

Done this 27th day of July 2005.”

This certification amended the certification issued by him on April 7, 2005 which stated a delivery of 139 heads of goats because according to Dr. Gonzales, there were additional delivery of goats due to the recommendation of the Technical Working Group of the Bids and Awards Committee which suggested an additional delivery of 8 heads of goat and reduction of price per results of evaluation made and duly approved by the Bids and Awards Committee under Resolution No. 17, Series of 2005.

The program design called for 91 heads of Female Breeder Goat and 9 heads of Male Breeder Goat, or a total of 100 heads of goat, with an appropriation of P200,000.00. But the delivery made per certification of Dr. Al G. Gonzales, City Veterinarian/End User, disclosed that the actual delivery made was for 141 heads of goat and these were not of breeder quality and upon delivery many were too small, some were old and many were thin, as stated in his certification.

An Ocular Inspection Report dated March 28, 2005 of Ms. Merlina S. Berdelao, Asst. City Agriculturist, BAC/TWG Member, stated herein her findings and recommendations of the ocular inspection and appraisal conducted on the goats procured under the program of goat dispersal of the Office of the City Veterinarian as follows:

1. The reported 30 heads of goatlings and does are found to be low grade.

The average weight ranges from 5-6 kilos only.

Health status is moderately inferior.

Health conditioning to breeding time takes a quite period of time.

To date, not fit for dispersal.

To date, not fit for breeding.

In this report, the Asst. City Agriculturist highly recommended to request the supplier that the 30 heads of goatlings will be replace with another heads of healthy and ready to breed female or male goats.

In an interview conducted on August 5, 2005 with Ms. Merlina S. Berdelao, Assistant City Agriculturist/TWG Member, revealed that the Technical Working Group of the Bids and Awards Committee was verbally instructed by the Chairman of the Bids and Awards Committee to evaluate and verify the sizes and equivalent prices of the 133 heads of goat delivered at the City Stock Farm from Guitagum, Misamis Oriental. Thus, in its letter dated May 18, 2005, addressed to Atty. Cromwell G. Generalao, BAC Chairman, recommended the following and partly quoted hereunder:

“… the said numbers of animals are grouped based on weighs and corresponding estimated prices which are considered over the counter prices to wit:

A. GOATS

Weight

Heads

Prices

Bid Prices

VarianceReduced

AmountFinal

Amount10 kls. Above 35P1,200.00 P 1,200.00 -0–0-P 1,200.008-10 kls. 601,080.00 1,200.00 1,200.00 1,200.00 1,080.005-7 kls. 38720.00 1,200.00 66.66% 480.00 720.00

In this regard, may we therefore recommend for the reduction of prices from the retention money of Suppliers of live goats and additional delivery of another eight (8) heads at ten (10) kilos above each, and the retention money of live carabaos in the amount stated in the table under the Total Deduction pursuant to Section 62 of the Implementing Rules and Regulations–A of the Republic Act No. 9184.

A. GOATS

Heads

Reduction Total Deduction from Retention60P 120.00P 7,200.0038480.0018,240.00

TOTALP 25,440.00

All goats that were declared dead after few days of delivery are still subject for verification by the Technical Working Group (TWG) based on the specified warranty period and the actual condition and/or nature of handling of the said animals by the employees and staff of the City Veterinarian Office who are directly in-charged at the City Stock Farm.

The said letter was signed by Mrs. Merlinda S. Berdelao, Assistant Agriculturist/TWG, Engr. Danilo R. Gabia, Supply Officer III/TWG and Dr. Al G. Gonzales, City Veterinarian/End User.

Conformed to charge to the 10% Retention: Goats signed by Mr. Bienvenido Jamis, the supplier of goats and approved by Atty. Cromwell G. Generalao, Former City Administrator/BAC Chairman.”

This report was resolved and conferred by the Bids and Awards Committee (BAC) per BAC Resolution No. 17, Series of 2005, dated May 18, 2005.

Though the Technical Working Group (TWG) of BAC recommended for the reduction of prices and the additional delivery of another eight (8) heads of goat, the fact remained that these did not correct the deficiencies noted because instead of achieving its objective to contribute development of agriculture in Gingoog City particularly in the aspect of livestock production, the City Government expended extra money to rehabilitate the moderately inferior health status of the delivered animals. The animals were treated for deworming and diarrhea, were given with vitamins and electrolytes, were given supplementary concentrate feed (hog mash, hog grower pellets or copra meal) and etc.

These reports were incorporated in the letter dated June 27, 2005 of the Technical Working Group (TWG) of the Bids and Awards Committee addressed to Atty. Cromwell G. Generalo, former City Administrator and BAC Chairman informing him of the result of their findings on the review and verification regarding the goats that died few days after delivery and the actual conditions and nature of handling of goats, as quoted herein:

“

ACTUAL CONDITION OF ANIMALS UPON DELIVERY

Many of the animals were thin which was most probably caused by poor feed intake. Many had rough coats and a few showed signs of diarrhea, which were manifestations of worm infestation. A few were infested with ticks. Age ranges from about 4 months to over 1 year old. The presence of old ropes with different colors signified that the animals were raised using the tethering system. Health status is moderately inferior. Health conditioning to breeding time will take a period of time. The animals to date are not fit for breeding or for dispersal. Thirty (30) heads in the first delivery and eight (8) in the second delivery were small (5-7 kg).

HUSBANDRY PRACTICES IMPLEMENTED UPON DELIVERY OF GOATS

All animals were dewormed within one week (March 29, 2005) from the first delivery using Abendazole (15%) at 1 ml per 10 kilos body weight. Vitamins and electrolytes (MVE) were added to the drinking water at 1 teaspoon per gallon, supplementary copra meal was given and thin animals were injected with vitamins ADE. Water with vitamins and electrolyte was placed in the animal shed and near the entrance between paddocks 2 and 3. Supplemental minerals (Red Rokies) were given on a free access basis. Those exhibiting diarrhea were given additional treatment using Scourex. Animals were allowed to freely graze in paddocks 2 and 3. Animals with rough coat and those showing diarrhea were again given Albendazole at 1 ml per 10 kg body weight in April 26, 2005 including those delivered on April 22, 2005.

HUSBANDRY PRACTICES IMPLEMENTED DURING DISEASE OUTBREAK

Plastic sheeting was used to cover the windward side of the shed housing the animals. Five (5) Incandescent bulbs (100 watts) were installed to provide extra heat at nighttime. While the animals are still allowed to graze in paddocks 2 and 3, they were given supplementary feed composed of chopped napier grass, ipil-ipil, madre de cacao and centrosema. Employees of the office hauled these fresh feeds even on weekends. Supplementary concentrate feed (hog mash, hog grower pellets or copra meal) were given in increased amount. Mineral lick (Red Rockies) and water with vitamins and electrolytes (MVE) were still available. Pneumonia, tick infestation, worm infestation and coccidiosis were treated using appropriate drugs. Constant monitoring of worm eggs and Eimeria oocysts in the feces and tick infestation was conducted. Symptoms of pneumonia were also monitored.

D. HUSBANDRY PRACTICES IMPLEMENTED AFTER OUTBREAK OF DISEASE CONDITIONS

Plastic sheeting is still used to cover the windward side of the shed housing the animals. While the animals are now allowed to graze in paddocks 2-7, they are still given chopped napier grass, ipil-ipil, madre de cacao and centrosema. Copra meal is still given. Mineral lick is still available but only plain drinking water is given. Constant monitoring of worm eggs and Eimeria oocysts in the feces and tick infestation and symptoms of pneumonia continues.

The husbandry practices implemented by the City Veterinary Office upon arrival of said animals were found to be appropriate and could even be considered better than the features of a tethering system of raising goats.

EVALUATION OF GOATS THAT DIED FEW DAYS AFTER DELIVERY

First goat mortality was on April 1, 2005. The animal suffered from diarrhea. In Gingoog City, the most common cause of diarrhea is worm infestation. The animal was already given dewormer (Albendazole) on March 29, 2005. Supplementary treatment using scourex was given but the animal did not respond. On that day 2 more goats exhibit diarrhea and were undergoing treatment. Later they exhibit symptoms of pneumonia, eg. Coughing and colds. They were treated using Oxytetracycline HCI injection. The said animals died on April 6 and 12. Another died in April 18, 2005 exhibiting the same symptoms. On April 23, 2005 one goat died. The said goat is part of the second delivery on April 22, 2005. The most probably cause is cold exposure during travel the animal being wet with urine during transport. ”

Actual inventory conducted by the City Veterinarian/End User and the Asst. City Agriculturist/ TWG, as witnessed by employee of the City Auditor’s Office, revealed that out of the 141 heads of goat delivered, only 81 heads of goat survived after the rehabilitation made by the end user.

As a result, the payment made on this transaction was disadvantageous to the government because the delivered goats were not in accordance with the specifications called for in the purchase order, hence:

They failed to achieve its objective to contribute to the development of agriculture in Gingoog City particularly in the aspect of livestock production because up to this period the goat cannot yet be dispersed to targeted beneficiaries because of the health status of the animals.

They have expended additional money to rehabilitate the health status of the animals after its delivery.

The former Chairman of the Bids and Awards Committee/former City Administrator justified and we partly quote:

“The only basis of the AOM for declaring that the goats delivered did not conform to the specifications of the Purchase Request and the Purchase Order is the observation of Dr. Al G. Gonzales and the Technical Working Group that “the goats were not of breeder quality and upon delivery, many were too small, some were old and many were thin.” Dr. Al Gonzales therefore concluded that goats that are too small, old and thin cannot procreate, produce, bear young or be fruitful. The said report of Dr. Al Gonzales is contrary to common knowledge and common human experience of raising goats because even small goats, even old goats and even thin goats can procreate, produce, bear young and be fruitful. Moreover, there is no report and there is no record of any actual clinical, laboratory or technical examination or autopsy showing that the goats delivered have no capability to procreate, produce, bear young or be fruitful. In the absence of any clinical or laboratory examination of the capability of the goats to breed, common knowledge and common human experience of the goat raising should be the basis of observations that even small or young or thin goats may procreate, bear young and be fruitful.

In the absence of any report, record, finding or observation to the contrary, the goats that were delivered have the capacity to BREED as required under the Purchase Request and the Purchase Order. Hence, the supplier has complied with the specifications of the Purchase Request and the Purchase Order that the goats to be purchased are “BREEDER GOATS” having the capability to “BREED”.

ON THE SECOND ISSUE of whether the goats being delivered were accepted and inspected by the concerned officials, the undersigned maintains that the City Veterinary Office has accepted and inspected the goats being delivered.

The acceptance of the goats by Dr. Al Gonzales, the City Veterinarian and the requisition officer, is shown by the fact that Dr. Al Gonzales directed the delivery of the goats to the Gingoog City Livestock Stock Farm without expressing any reservations or intention to reject the same. If Dr. Al Gonzales intended to reject the goats, he should have refused the delivery of the animals to the city’s livestock stock farm.

Further, the use by Dr. Al Gonzales of the resources of his office to feed and treat the diseases of the goats at the city’s livestock stock farm indicates that Dr. Al Gonzales accepted the goats. Moreover, the acceptance of the goats by Dr. Al Gonzales and by the members of the BAC-TWG is shown by their failure to recommend the rejection of the goats, and instead they recommended the reduction of the price of the animals. In not recommending the rejection of the goats and instead recommending the reduction of their prices, Dr. Al Gonzales and the members of the BAC-TWG are deemed to have acknowledged the acceptance of the goats.

The general objective of the Goat Dispersal program of the City Government was to contribute to the development of agriculture in Gingoog City particularly in the aspect of livestock production.

Its specific objective, as cited in the program design, was to enable farmer-beneficiaries to generate additional income by utilizing the marginal areas and areas under coconut as grazing areas.

While it is true that the Purchase Request and the Purchase Order only specified 121 heads of female breeder goat and 12 heads of male breeder goat with no requirements as to the size, weight, age, body condition, price per head or price per unit as justified, the things to be considered on all government purchases/acquisitions is whether the purchase made served its purpose/objective and if whether the purchase made was advantageous to the government.

As the requisitioning office, the City Veterinarian accepted the goats as to QUANTITY only and certified that the goats delivered were not of breeder quality and upon delivery, many were too small, some were old and many were thin. As justified by the requisitioning office, they were not given the privilege to choose the stock to be delivered by the supplier, Mr. Bienvenido Jamis, who quoted the lowest price. The City Veterinarian further certified that it was the practice of previous livestock procurements, that the City through the City Veterinary Office evaluated the quality of stocks during canvass of prices and chooses the stocks to be delivered to PROTECT THE INTEREST OF THE CITY. In this case, there was a failure to inform the requisitioning office as to the quality of goats to be purchased, hence interest of the City was not protected.

Deliveries made on the requisitioned goats were not in accordance with specification as stated by the City Veterinarian. This was further supported by the Acceptance and Inspection Report, attached to the justification of the Audit Observation Memorandum because the following City Officials qualified/specified that they received the items requisitioned as to QUANTITY ONLY, as follows:

Dr. Al G. Gonzales, City Veterinarian

Mr. Renato C. Chaves, General Services Officer

Engr. Danilo R. Gabia, BAC-TWG

Ms. Merlina S. Berdelao, BAC-TWG

We believe that the intention of the City Government was to purchase breeder goats that are capable to produce or bear young goat at the TIME OF PURCHASE. But records showed that it took the Agency five (5) months and 10 days to distribute the goats to intended farmer-beneficiaries. The first delivery date of the goats was on March 22, 2005 while the first day of goat’s dispersal was on September 2, 2005. A Total of 52 heads of goats were distributed and one additional goat died as of November 18, 2005. Out of 133 heads of goat purchased/paid, only 80 heads of goats are available now for goat dispersal program and 53 heads died.

The payment made on this transaction was disadvantageous to the government because:

Instead of serving 133 farmer-beneficiaries as envisioned in the program, only 80 or 60% farmer-beneficiaries can avail of the dispersal program, due to the death of 53 or 40% heads of goat;

The City Government expended additional money to rehabilitate the moderately inferior health status of the goats after its delivery because these were unfit for dispersal;

The government lost the amount of P63,600.00 due to the death of 53 heads of goat; and

There was a delay in implementing the Goat Dispersal Program because of the health status of the goats at the time of delivery; the distribution started only on September 2, 2005 after 5 months and 10 days from delivery;

Had the delivered 133 heads of goats been of good quality at the time of purchase the above would have been avoided, hence the purchase was disadvantageous to the government and they failed to fully achieve its objectives to contribute to the development of agriculture in Gingoog City particularly in the aspect of livestock production.

Recommendations:

Explanation is required why the goats delivered were not out rightly rejected since these animals were not in conformity with the specification called for in order of the requisitioning office as specified in the purchase order.

Further explanation is also requested why the animals were delivered/accepted directly at the Stock Farm without the end user’s inspection/acceptance and paid without the acceptance and inspection as to conformity with specifications in the order of requisition.

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Written by admin · Filed Under Commission on Audit, Gingoog City