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National Printing Office illegally subcontracted jobs to private firms — COA

/ 04:05 PM June 24, 2019

MANILA, Philippines — The National Printing Office (NPO) has allegedly subcontracted its printing jobs illegally, under the guise of renting equipment from private firms, the Commission on Audit (COA) said.

In the 2018 audit report released on Friday, COA said NPO made it appear that they were hiring printing equipment from 12 companies for a price of P121.6 million.

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However, documents showed that the payments, which already amounts to P120.9 million, were for the printing process — which COA says is an indication that NPO “subcontracted” its tasks.

“To augment its limitation on printing capability of accountable and specialized forms, the Agency continued the engagement of private printers […] without any valid contract with them,” COA said.

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“Moreover […] documents would show that the amount paid was already tantamount to the total production cost, which means that it was a subcontract, contrary to Section 4.6 of the Guidelines of the GPPB Resolution No. 05-2010 dated October 29, 2010,” the commission added.

This practice, according to COA, violates Republic Act 9184 or the Government Procurement Reform Act and Presidential Decree or the Government Auditing Code of the Philippines.

NPO was also found to have continued tapping the services of companies even if their lease contracts had expired in September 2017. The entire process also did not go through public bidding.

This was not the first time that NPO was called out for subcontracting printing services. In 2017, COA also issued a notice of disallowance (ND) for the “irregular payments to private printers.”

“Despite the audit recommendations in the CY 2017 AAR and the issuance of ND […] NPO continued subcontracting its printing services in the guise of ‘leasing’ and recording the transactions in its books as ‘leasing,'” COA said.

The agency also discovered that the rental fee comprised 85 percent of the total production cost when it should be just a portion of the “manufacturing overhead” or the total indirect expenses.

It was implemented in 2012 by the previous NPO management and has been part of its procedures since then.

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“Inquiry as to the basis of the 85 percent disclosed that it was a decision by the Head of the NPO in the year 2012 but without any written supporting guidelines,” the report said.

“From then on, it was adopted by the NPO. It is of note that NPO was unable to present the breakdown of the costs of production to assert that indeed, 85 percent of it pertains to the rental fee,” it added.

The NPO is an office under the Presidential Communications Operations Office (PCOO) mandated to print materials needed by the government. But an executive order in 2004 stripped NPO of exclusive jurisdiction of the government, forcing it to compete with private entities.

As of now, the only exclusive job that NPO does, although shared with the Bangko Sentral ng Pilipinas, is the printing of election paraphernalia.

COA recommended that NPO management enter into legal contracts and valid equipment lease agreements through competitive bidding.

The NPO is also asked to release certifications or waivers in case the agency cannot accommodate printing requirements “due to time constraints and equipment limitations. (Editor: Eden Estopace)

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TAGS: COA, Commission On Audit, National Printing Office, NPO, Philippine news updates, subcontract
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