Republic of the Philippines

COMMISSION ON AUDIT
Regional Office No. VII
Audit Group LGS-D Cebu II, Team R7-07
Office of the City Auditor
Danao City

AOM No: 2019 – 003 (2018)

Date: 06 February 2019

AUDIT OBSERVATION MEMORANDUM (AOM)

For: The Honorable RAMON D. DURANO III

City Mayor
Danao City

Attention: Mr. Roland M. Perez

Chairperson, Bids and Awards Committee

Mr. Jovinal Dagatan

City Accountant

We have examined the transactions on the procurement of goods and services done
thru the alternative mode of procurement that were paid out from the City’s Special
Education Fund (SEF) during the Calendar Year 2018 and noted the following
deficiencies/errors:

The Request for Quotation (RFQ) or Request for Proposal (RFP) on the
procurements of goods and services totaling P1,262,718.00 during the year
through the Alternative Modes of Procurement was not posted at the
PhilGEPS website contrary to Section 54.2 of the 2016 Revised
Implementing Rules and Regulations (IRR) of R.A. 9184 otherwise known
as “The Government Reform Act” dated 09 August 2016.

Section 54.2 of the Revised IRR states that “For alternative methods of procurement,
the Procuring Entity may dispense with the advertisement in the newspaper and posting
requirement as prescribed in Section 21.2.1 of this IRR.

For the following modalities, however, the BAC, through its Secretariat, shall post
the invitation or request for submission of price quotations/proposals in the PhilGEPS
website (emphasis, ours), the website of the Procuring Entity concerned, if available, and at any
conspicuous place reserved for this purpose in the premises of the Procuring Entity for a
period of at least three (3) calendar days:

1. Section 49 Limited Source Bidding;

2. Section 52.1 (b) Shopping for ordinary office supplies and equipment not
available in DBM-PS (for above Fifty Thousand Pesos (P50,000.00));
 3. Section 53.1 Two Failed Biddings;
4. Section 53.9 Small Value Procurement (For ABC above Fifty Thousand Pesos
(P50,000.00)) and
5. Section 53.11 NGO Participation”

We examined the disbursement vouchers of the City on the procurement of goods

through the alternative modes of procurement amounting to P1,262,718.00, as shown in the
table below. In course of our review we noted that the Requests for Quotations (RFQs) for the
transactions enumerated hereunder were not posted in the PhilGEPS website, thus defeating
the purpose for wider publicity and transparency in government procurement. In effect, there
was no assurance that the most advantageous price was obtained by the City government.

DV Number Mode of Items Purchased Amount

Procurement
200-180109 SVP Various materials for School Bldg. P51,692.00
(Lower Quisol, Danao City)
200-1805119 SVP Parade Shoes for CVIRAA 2018 100,890.00
200-1806148 Shopping B Payment of Desktop Computer 293,250.00
System for 10 Cluster Schools
200-1807167 SVP Sports Materials for CVIRAA 2018 430,966.00
200-1808192 SVP Meals and Snacks for CVIRAA 2018 385,920.00
TOTAL P1,262,718.00

May we have your comment/s on the foregoing audit observation within fifteen (15)
calendar days from receipt hereof.

We recommend that the Bids and Awards Committee shall post the Request for
Quotation (RFQ) or Request for Proposal (RFP) on the procurements of goods and
services through the Alternative Modes of Procurement in the PhilGEPS website in
compliance with the provisions of Section 54.2 of the 2016 Revised Implementing Rules
and Regulations of R.A. 9184.

SOCRATES M. MONTEALTO
State Auditor IV
Audit Team Leader

MARIA DAISY O. BERCEDE

State Auditor V
Supervising Auditor
Proof of receipt of AOM:

Received by:
Name Position (Signature over Printed Date
Name)

1. Hon. Ramon D. Durano III City Mayor

2. Mr. Roland M. Perez Chairperson, BAC

3. Mr. Jovinal Dagatan City Accountant