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COMMISSION ON AUDIT
NATIONAL GOVERNMENT SECTOR
Cluster 8 Agriculture and Environment
Audit Group NGS 8-B, Team NCR-03
OFFICE OF THE AUDITOR
DA-PCAF Bldg., Department of Agriculture Compound
Elliptical Road, Diliman, Quezon City
The total amount of 7,095.00 is hereby disallowed in audit due to the advance payment
of items which were not delivered and which form an integral part of the items procured:
Section 88 of Presidential Decree No. 1445 prohibits the advance payment of government
contracts and specifically states that Except with the prior approval of the President (Prime
Minister) the government shall not be obliged to make an advance payment for services not yet
rendered or for supplies and materials not yet delivered under any contract therefor. No
payment, partial or final, shall be made on any such contract except upon a certification by the
head of the agency concerned to the effect that the services or supplies and materials have been
rendered or delivered in accordance with the terms of the contract and have been duly inspected
and accepted.
Review of the supporting documents revealed that Check No. 556845 amounting to
1,028,746.09 for the payment of various IT equipment was prepared on September 30, 2010.
The same was issued and was received by the representative of Basic IT Solutions on March 18,
2011 as evidenced by their issuance of OR no. 0501. However, inspection and acceptance of the
said delivered items were only made on April 6-13, 2011 and April 18, 2011, respectively.
Therefore, this shows that payment was made 31 days prior to the inspection and acceptance of
the delivered goods contrary to the abovementioned provision of PD No. 1445.
What makes matters worse was that although there was delivery of the items, some were
not in accordance with the specifications agreed upon and some were incomplete. Two laptop
computers were found to be not in accordance with the specifications, hence, were rejected and
returned to the supplier for replacement. However, the supplier absconded which led NAFC
personnel to personally settle the amount of 102,000.00 under the following Notice of
Settlement of Suspension/Disallowance/Charges (NSSDCs):
NSSDC OR
Amount
No. Date No. Date
14-004 10/01/2014 17,000.00 2096458 01/30/2014
14-005 10/01/2014 17,000.00 2096457 01/30/2014
14-006 10/01/2014 17,000.00 2096459 01/30/2014
14-007 10/01/2014 17,000.00 2096461 01/30/2014
14-008 10/01/2014 17,000.00 2096460 01/30/2014
14-009 10/01/2014 17,000.00 2096462 01/30/2014
Total 102,000.00
However, two items were still undelivered to this date, hence, this disallowance, to wit:
The following persons have been determined to be liable for the transaction:
Please direct the aforementioned persons liable to settle immediately the said
disallowance. Audit disallowances not appealed within six (6) months from receipt hereof shall
become final and executory as prescribed under Sections 48 and 51 of P.D. 1445.
ANDREW T. GARCIA
State Auditor II
OIC Audit Team Leader
ELEANOR G. PANCHO
State Auditor IV
OIC - Supervising Auditor DA 2
PROOF OF SERVICE OF COPIES OF ND TO PERSONS LIABLE
Received by
Name Position/Designation Date
(Print & Sign)
1. Eduardo C. Nolasco Former DA Assistant
Secretary for Finance