In its 2022 Audit Report, COA revealed that Compostela had not implemented the construction of Community College despite receiving P6 million in funding assistance for it from the Cebu Provincial Government, and that it had also not utilized as of the end of 2022 the P3 million in Local Government Support Fund (LGSF) it received for the building of a multi-purpose hall in Barangay Poblacion.
The COA also cited the insufficient detailed engineering design that caused the delay in the implementation of the construction of Phase 1 of the multi-purpose building.
The state auditor added that the non-implementation and non-utilization of these funds have deprived the constituents of the use and benefit of the projects.
Community College
On Dec. 29, 2020, the Municipality of Compostela received financial assistance from the Province of Cebu for the three-phase construction of a community college. However, as of December 2022, the fund remained unutilized, COA reported.
The state auditor said the project was procured and awarded to a contractor on Feb. 29, 2022, and on March 3, 2022, a notice to proceed was issued by the previous administration of Froilan Quiño to the contractor.
However, suspension orders were issued on March 7 and March 25, 2022, due to the relocation of the site and the election ban, respectively, while orders to resume were then issued on March 11, 2022 and July 1, 2022.
COA also reported that a separate procurement for the backfilling project (the process of filling in the excavated area around a foundation or structure) for the proposed Community College was conducted with the final payment of this recorded in February 2022.
But the agency found out that the contractor for the project had zero accomplishment as it did not resume the construction works for the project.
Multi-purpose building
A Local Government Support Fund amounting to P3 million was awarded to the Compostela local government unit (LGU) on Sept. 30, 2020 for the construction of a multi-purpose hall in Barangay Poblacion. However, it remained unutilized for over two years and was not reverted back to the source agency.
COA said this contradicts the Guidelines on the Release and the Utilization of the LGSF-Other Financial Assistance (FA) to LGUs in the Fiscal Year 2020 General Appropriations Act provided under Department of Budget and Management Legally Binding Contract (LBC) 122 dated Jan. 31, 2020.
According to Item 3.15 of the LBC, if at any point before Dec. 31, 2021, the LGU determines that the funds can no longer be utilized, for example when the program(s) and the project(s) cannot be implemented for any reason or when the same have been funded from other sources, the amount received by the same LGU from the LGSF-FA to LGUs shall be immediately reverted to the National Treasury.
The fund should have been returned to the source agency in compliance with the above-mentioned guidelines on Dec. 31, 2021.
However, COA found out that the former mayor awarded the contract for the construction of Phase 1 of the multi-purpose building only on Feb. 15, 2022, with the notice to proceed awarded on Feb. 21, 2022.
However, the municipal engineer failed to present necessary data on the project and upon deeper inquiry, personnel from the Municipal Engineering Office claimed that the project was 80 to 90 percent finished.
Furthermore, the COA said detailed engineering investigation, survey and design for the project was not sufficiently carried out by the Compostela LGU prior to the implementation of the project as evidenced by the suspension order and variation order issued by the Municipality on July 4, 2022 due to the inadequate backfill materials to stabilize the slab on the ground, contributing to delays in the project.
The election ban had already earlier suspended work on the site from March 25-June 30, 2022. The two suspension orders thus extended the completion date of the project from June 20, 2022 to Nov. 4, 2022.
COA said the Compostela LGU violated Section 17.6 of the Revised Implementing Rules and Regulations (IRR) of Republic Act (RA) 9184 stating that no bidding and contract awards must be given to a contractor unless the “detailed engineering and investigations, surveys and designs” including the right-of-way acquisition for the project has been carried out.
Recommendations
COA recommended that the Compostela LGU examine the extent of the delay and consider imposing liquidated damages or terminating the contract with the contractor for the unimplemented construction of the Community College pursuant to Section 9 of Annex E of the Revised IRR of RA 9184 or the Government Procurement Reform Act of 2003.
Replying to the COA, the Compostela LGU said it is preparing the documents for the termination of the contract for the proposed Community College, citing its infeasibility and its requirement of more funds for completion. The town will also request the realignment of the funds to its other priority projects.
As for the multi-purpose building, the state auditor recommended, and Mayor Felijur Quiño agreed, that the Compostela LGU request for an extension from the source agency for the utilization of the funds and project implementation, or else the funds must be returned to the source agency.
COA also suggested that the municipal planning and development officer and the municipal engineer ensure that projects funded from assistance are timely implemented in accordance with the guidelines.
The Compostela LGU also agreed to the COA’s recommendation to conduct reasonably accurate and sufficient detailed engineering for all its projects henceforth to reduce or eliminate the need for variation orders that delay the completion of projects. (EHP with Claudine Flores, CNU Intern)