SENATE Minority Leader Frank Drilon maintained on Wednesday the transfer of P42 billion in pandemic response funds of the Department of Health (DOH) to the Department of Budget and Management (DBM) violated the procurement law, indicating those involved could be haled before the graft court.
This, as the Senate Blue Ribbon investigating committee, chaired by Senator Richard Gordon, continued its “moto proprio investigation” of the issues flagged in the 2020 Commission on Audit (COA) report related to budget utilization of the DOH, especially its expenditures to fight Covid 19.
The first hearing Gordon called last week focused on widespread complaints by public and private health workers about nonpayment or delayed payment of pandemic-related benefits like hazard pay and special risk allowances, as mandated by the Bayanihan law.
At Wednesday’s second hearing, several senators dwelt at length on the issue raised by Sen. Imee Marcos earlier: why did the DOH transfer P42 billion of its funds to the DBM’s Procurement Service (PS-DBM), to outsource the bidding and purchase of badly needed personal protective equipment and pandemic-related supplies?
Drilon, a former Justice Secretary, said the DOH action violated existing implementing rules and regulations (IRR) and the Procurement Law when the P42-billion fund was transferred to PS-DBM.
He noted the irregularity stems from the absence of a MOA required for documentary tracing in disbursing the P42-billion fund, the same basis for COA flagging this among DOH’s “deficiencies” in fund management in 2020.
Drilon noted that the P42 billion transferred to PS-DBM comprised the biggest chunk of the “mismanaged” P67 billion DOH Covid-19 funds.
Citing Section 7.3.3 of the Implementing Rules and Regulations of the Government Procurement Reform Act, Drilon stressed the need to have a memorandum of agreement (MOA) before the funds was transferred by the DOH to PS-DBM.
“Prudence could have dictated that when you transferred P42 billion to another agency, out of the budget of the DOH, you should have signed a MOA; is that not a prudent thing to do for a Secretary [of the DOH]?” Drilon asked Duque. This transfer was found by COA to have not been “supported with complete documentary requirements contrary to law and regulations, and casted doubts on the validity, regularity and propriety of transactions.”
Duque responded by saying that they have a “document” to cover the transfer which is called “agency procurement request.”
“And also I would like to state, for the record, that MOA was not required to the fund transfer transactions with the PS-DBM since it covers [or it] was underscored already considered as common good supplies in the aforesaid GPPB [Government Procurement Policy Board] resolutions, banking on the provision of other relevant basis,” said Duque, who also cited the Republic Act 184 or the “Agency-To-Agency Procurement of Goods, Infrastructure Projects and Consulting Services.”
When Drilon asked Duque if he sees that there was nothing wrong with that process, the latter responded: “Yes, your honor. You are right.”
“However, with the findings of COA, we have agreed that, with their guidance, we can still come up with the memorandum of agreement as this is one of the deficiencies that was reported,” Duque said, adding that they will have to comply with 60 days after receiving COA’s report.
Called to testify, former DBM Undersecretary Lloyd Christopher Lao who used to head PS-DBM when the monies were transferred and bids were called, asserted there was no need for a MOA at that time as what were being acquired were common supplies.
But Drilon pointed out that there was nothing in the law that rules out the need for MOA under such arrangements.
According to Health Secretary Francisco Duque, they transferred funds to PS-DBM last year because the DOH personnel were neck-deep in work, and were busy procuring other supplies and services for non-Covid programs.
“We also did procure, you are right, but the volume…di kakayanin [we have limited capacity],” Duque explained to Drilon.
“Punong-puno na ang tungkulin ng aming internal bids and awards committee [the hands of our bids and awards committee are full] so we needed help,” the DOH official stressed, adding that the PS-DBM have the capability to store international supplies.
Duque added that belated submission is allowed as the COA gave them 60 days to correct deficiencies in the documents on the use of pandemic funds.
DOH Finance Management Office Director Rowena Lora reported that of the P42-billion fund, P39 billion was already utilized as of June 30, 2021 and the report submitted to COA stated that P12 billion was unused due to absence of physical deliveries of purchased items.
Lora,meanwhile said that of the P42-billion fund transferred to the PS-DBM for the procurement of PPEs, including face masks and face shields, P39 billion was already utilized as of June 2021.