MANILA, Philippines–The Commission on Audit (COA) has recommended the abolition of the advisory unit for its heavy dependence on outside consultants and heavy losses.
In an annual audit report of the NIA released last Friday, the COA said the NIA Consult Inc.’s (NIACI’s) purpose to engage in consultancy “is defeated as it had been heavily dependent on hiring of consultants on a per project basis.”
While the Government Policy Procurement Board allowed NIA to enter into an advisory contract with its wholly owned subsidiary, COA noted that NIACI was ill-equipped to provide such service to its parent agency because “it had only one engineer performing the engineering tasks and had to heavily rely on consultants.”
The COA noted only one of the NIACI’s 12 employees was an expert in irrigation-related services. The employee retired last December.
NIACI has relied largely on its previous employees who retired during the NIA’s rationalization plan five years ago and have been retained on a per project basis.
“Continued operations could result in further losses, which are detrimental on the part of the government. Besides, it is an exercise in futility to be continuing operations without sufficient and knowledgeable personnel to carry out its mandate of performing consultancy services related to irrigation system,” the COA said.
“We recommended that the management consider winding up and liquidating NIACI’s business and affairs as it can no longer efficiently and effectively carry out its mandate of engaging in consultancy services related to irrigation system,” it said.
The COA also questioned how the NIACI managed to chalk up losses from 2009 to 2013 (except in 2011) despite getting 96.3 percent of its income from NIA.
NIACI is also bankrupt as its liabilities of P20.215 million (of which P14.013 million in office space rentals and share in electricity, telephone, water and janitorial expenses have not been paid for the last three to nine years) were more than double its capital stock of P10 million.