Pagcor under fire anew for P1-B slot machine deal

The Philippine Amusement and Gaming Corp. has come under fire anew, this time for not following proper procedures in buying P1.047 billion worth of slot machines.

The Commission on Audit said Pagcor’s purchase of slot machines in 2010 did not comply with the rules of the Government Procurement Reform Act.

In its 2010 report on Pagcor, COA said the machines were bought under the demonstration and trial agreement with option to purchase. This falls under the Alternative Mode of Procurement, or direct contracting, under the law.

COA said that Pagcor did not follow the methodology on the conduct of direct contracting in procuring the slot machines.

It said that at the expense of transparency, the procurement was handled by the office of the executive vice president instead of the bids and awards committee (BAC).

“In short, transparency in the procurement process, competitiveness, viability and reasonableness of the items procured were not determinable,” the COA said.

COA did not name the supplier of the slot machines in its report.

Not in the plan

COA also said that the mode of demonstration and trial agreement with option to purchase did not have any provision for the termination of the agreement should the slot machines failed to earn the desired level of income.

The slot machines were not included in Pagcor’s annual procurement plan as well, it said.

Pagcor bought slot machines in 2009 and 2010 in two transactions amounting to P840.049 million and P207.266 million.

The COA said that the next time Pagcor bought slot machines, it should follow the procedures laid down in the law for direct contracting and allow the BAC to undertake the procurement. Slot machines should also be included in the gaming agency’s annual procurement plan, it added.

Pagcor, for its part, told the COA that every machine mode had a unique game theme and features covered by propriety rights, which is why a particular machine could only be sourced from its exclusive manufacturer or supplier.

As for the other concerns of the COA, Pagcor said, it would heed its recommendations.

Earlier, the new management of Pagcor filed a string of criminal cases before the Department of Justice against its predecessors, led by former chair Efraim Genuino, for the alleged misuse of agency funds.

‘Baler,’ the movie

One of these cases stemmed from the use of Pagcor funds to finance the film “Baler.”

The COA, in its latest report on Pagcor, also questioned Pagcor’s spending for the movie.

It said Pagcor paid for P26.7 million worth of movie tickets, charged mostly to marketing expenses, but the move was not properly supported by documents.

It said that the Pagcor board had approved a resolution that the cost of tickets would be charged to the player tracking system (PTS) points of its 12 casino branches. But only a small amount was charged to PTS points, and the rest were charged to other accounts without board approval.

Pagcor said that it was impossible for casino branches to charge the cost of tickets against the customers’ PTS points without their consent. Since none of the tickets could be returned, it added, the casino branches distributed unsold tickets for free and charged the cost against marketing expenses.