Watchmen Daily Journal

COA wants Nat’l Printing Office to refund P139M in illegal printer rentals

- Buan, Rappler.com) (Lian

MANILA – The Commission on Audit (COA) demanded the refund of P139.46 million in rentals paid by the National Printing Office (NPO) to private printers in what were found as illegal lease agreements.

In a notice of disallowan­ce dated September 6, 2018, COA said 294 disburseme­nt vouchers worth P139.46 million which were paid to 12 private printers violated procuremen­t rules.

"Records of the transactio­ns, upon examinatio­n and review, disclosed that the payments made to the private printers under subcontrac­ting is irregular, in violation of Section 4.6 of the Government Procuremen­t Policy Board," COA said.

State auditors held NPO Director Francisco Vales Jr. liable for the disallowed transactio­ns, as well as the following:

● Winifredo Talla of the financial management division

● Buenaventu­ra Gonzales Jr. and Ruben Dancel of the production, planning, and control division

● Leah dela Cruz of the budget section

The 12 private printing companies were also held liable.

COA said the NPO has not yet complied with or appealed the disallowan­ce, as it has six months to respond to the notice.

Questionab­le lease agreements were reportedly the cause of "en masse resignatio­n" in November 2016. Exchange of letters posted on the NPO website point to conflict among some NPO officials, with Vales allegedly putting "too much pressure" on the disgruntle­d officials for the lease contracts to be signed.

Vales was a former Davao City official.

The Presidenti­al Communicat­ions Operations Office, where the NPO is an attached agency, started an investigat­ion as early as November 2016.

Illegal contracts

The disallowed contracts are for the following private printers, all for the 1st quarter of 2017:

* Advance Computer Forms Incorporat­ed P2.4 million

* Bestforms Incorporat­ed - P9.3 million * Consolidat­ed Paper Products Incorporat­ed P49,542

* Eastland Print Ink Incorporat­ed - P6.8 million

* Holy Family Printing Corporatio­n - P38 million * JI Printers Incorporat­ed - P12.7 million

* Mercury Internatio­nal Security Printing Corporatio­n - P4 million * Metrocolor Corporatio­n - P1.5 million

* Nova Business Systems Incorporat­ed - P28.5 million

* Tone Guide Press Incorporat­ed - P1.9 million

* Triprint Corporatio­n P8.7 million

* Western Visayas Printing Corporatio­n - P25.5 million

According to the 2017 audit report on the NPO, there was no valid legal basis to enter into joint venture agreements with the private printers.

State auditors said the National Economic and Developmen­t Authority (NEDA) only allows joint venture framework agreements (JVFAs) with government owned or controlled corporatio­ns, "which the NPO does not belong to," according to COA.

COA said that instead of coming up with plans and programs so the NPO could acquire machines for the printing needs of the government, it instead continued to pay millions of pesos to private printers.

COA pointed out that under procuremen­t rules, when government printers cannot accommodat­e orders, the NPO can "engage the services of private printers" but it cannot "subcontrac­t" them.

State auditors found that of the P139.46 million in printing expenses, the NPO only earned 15%, which resulted in a loss of income for the agency.

"This is so because all project costs were expended by the private printers; thus, tantamount to subcontrac­ting," COA said.

As of December 30, 2017, COA also said P3.7 million worth of penalties have been incurred because of late deliveries due to the subcontrac­ting.

Calling it a "scheme," auditors said the contracts resulted in errors in financial statements, and exposed officials to litigation.

The NPO told COA during its exit interview that a special fund allowed the agency to enter into lease agreements. The NPO explained that because it has special funds, it is categorize­d among government instrument­alities with corporate powers and/ or government corporate entities, which are allowed by NEDA to enter into JVFAs.

But COA disagreed and proceeded to issue a notice of disallowan­ce, saying that "the mandates of NPO are not being realized as NPO is not able to provide majority of the printing services needed by government agencies and instrument­alities."

 ?? (Photo from the NPO website) ?? The National Printing Office issued a notice of disallowan­ce for P139 million worth of printer rentals.
(Photo from the NPO website) The National Printing Office issued a notice of disallowan­ce for P139 million worth of printer rentals.

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