Why buy gadgets from a firm registered as engaged in general construction?
The Commission on Audit flagged the Department of Information and Communications Technology for purchasing P170.273 million worth of electronic devices from Lex-Mar General Merchandise and Contractor.
Reports note that COA found out DICT procured laptops, tablets and pocket wi-fi devices from Lex-Mar that was registered with the Bureau of Internal Revenue as a company engaged “in the business of general construction business.”
“Here, there is no showing both in Lex-Mar’s BIR certificate of registration and permit to operate that it is engaged in the business of supply and delivery of ICT devices such as laptops, tablets and pocket WiFi,” the state auditing body was quoted as saying.
“Hence, it is doubtful whether the herein supplier has the legal capacity to engage in this kind of (ICT supply) business,” it added.
State auditors also questioned Lex-Mar’s financial capability to supply the items for the project since its listed assets were only at P44,578,450 as of December 2019. The contract, meanwhile, is four times the company’s value.
They likewise noted that there are no submitted documents saying that Lex-Mar has previously engaged in the business of supplying ICT devices.
Identified beneficiaries of the devices were students and teachers of public schools in the cities of San Juan and Makati.
“The DICT’s mandate of formulating and implementing policies and initiatives does not include the authority of providing ICT devices to the intended beneficiaries,” COA said.
“Hence, while we sympathize with the plight of learners and teachers in this time of distance learning or online classes, a donation of government property, such as in this case, may be considered as illegal expenditure,” it added.
The Overseas Workers Welfare Association was similarly flagged by COA for purchasing hygiene kits, sanitary napkins and thermal scanners worth nearly P1 million in a construction firm that did not exist in its listed address.
‘Boost ICT-enabled education’
DICT in a statement on Wednesday said that it has “already responded to the COA’s memorandum, addressing the issues raised and assuaging its concerns regarding the said projects.”
Lex-Mar was “found to be a technically, legally, and financially capable supplier” and that the devices were procured through the Emergency Cases of the 2016 Revised Implementing Rules of Republic Act 9184.
DICT claimed that Lex-Mar is also a wholesaler of office supplies and office equipment, including the supply of computer units and tablets. In addition, its recent financial statements also supposedly indicate that its income is “capable of sustaining its operations, costs and expenses.”
The information technology agency also justified its purchases by saying that the laptops and gadgets were intended to assist its partner local government units facilitate distance learning this COVID-19 pandemic.
“The ICT gadgets, which were turned over by the LGUs to student beneficiaries, enhances (sic) the delivery of services to the education sector – a mandate that DICT fulfills,” it said.
“Overall, the projects involved aim to support the primary objective of the government to contain the spread of the COVID-19 virus as more and more agencies and LGUs rely on the technical expertise and functions of the DICT to address the greater need for digitization, interconnectivity, and ensuring cybersecurity awareness of the public, during this new normal,” DICT Secretary Gringo Honasan II said.
Other than DICT and OWWA, state auditors have similarly flagged the Department of Health, the Department of Education, the Department of the Interior and Local Government and the Land Transportation and Regulatory Board, among others.
The COA is mandated to “promulgate accounting and auditing rules and regulations, including those for the prevention and disallowance of irregular, unnecessary, excessive, extravagant, or unconscionable expenditures, or uses of government funds and properties.”