Findings No.1 COA Annual Audit Report 2005

July 26, 2008

1. Purchase of medicines and other medical supplies for use of the Provincial Health Office and for distribution to the different hospitals under the Province of Misamis Oriental were procured through shopping instead of competitive public bidding in violation to Republic Act 9184.

Section 10 of Republic Act No. 9184 provides that all procurement shall be done through competitive public bidding.

Section 22 of the same Act further provides that shopping maybe resorted to under any of the following instances:

When there is an unforeseen contingency requiring immediate purchase, provided however, that the amount shall not exceed fifty thousand pesos (P50,000.00); or

Procurement of ordinary or regular office supplies and equipment not available in the Procurement Service involving an amount not exceeding two hundred fifty thousand pesos (P250,000.00), provided however, that the procurement does not result in splitting of contracts.

Review of the submitted Purchase Orders of the Province of Misamis Oriental and its corresponding disbursement vouchers revealed that all purchases of medicines and other medical supplies were procured through shopping instead of competitive public bidding as mandated under RA 9184.

It was also observed that separate Purchase Requests and Purchase Orders of the same date were prepared for each responsibility centers (the municipal hospitals and health offices) thus, reducing the amount per PO to below P250,000.00, the ceiling requirement to avail of the alternative mode of shopping. However, such Purchase Orders of the same date when totaled costs more than P250,000.00 violating the second condition of Section 22 of the aforementioned Act. Such practice tantamounts also to splitting.

The practice of preparing separate Purchase Orders for each hospital and health unit may be for the convenience of the Accounting Office in their recording, since each hospital is also a separate responsibility center, it cannot be helped that the immediate conclusion would be that of evading competitive public bidding.

As a result of such practice, the Province was not able to avail of the most advantageous prices of medicines and other medical supplies that suppliers can offer, had they purchased in bulk and conducted competitive public bidding.

Recommendation:

Purchase of medicines and medical supplies should be in bulk and through competitive public bidding. It can be done quarterly using the Annual Procurement Program as the basis in the preparation of the Purchase Requests. In that way, the Province will have the chance of availing the most advantageous prices suppliers can offer.

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Written by admin · Filed Under Commission on Audit, Misamis Oriental