Stradcom Corp., the information technology provider of the Land Transportation Office (LTO), has illegally used the LTO’s database in its dealings with other agencies, earning P2 billion in the process, according to the Commission on Audit (COA).
In its 2010 report on the LTO, the COA said Stradcom had also collected P340.719 million in computer service fees even from manually processed transactions and that this amount should be recovered.
The COA said LTO had allowed Stradcom to use the LTO database for various interconnectivity projects the IT company had contracted on its own and with third parties.
Stradcom earned an estimated P2.015 billion from these activities from 2006 to 2010, the COA said.
No share for gov’t
“The government in general as well as the LTO in particular was not given its corresponding share and the sharing scheme for interconnectivity transactions between LTO and Stradcom did not materialize,” the COA said.
“Because of the failure of the LTO officials concerned to execute the appropriate contract/s with Stradcom, IT Providers, and other private entities and government agencies, the national government as owner of the database being used was deprived of a rightful share in the interconnectivity fees collected by Stradcom. It was thus precluded from earning additional income of an undetermined amount,” it said.
LTO Executive Director Alfonso Tan declined comment, saying the agency had yet to see the COA report.
Stradcom spokesperson Margaux Salcedo said:
“The interconnectivity projects of Stradcom have been upon request of the respective government agencies for which this service has been provided, to increase their efficiency, lessen corrupt practices of both civilians and government employees and effectively increase income of concerned agencies.
“Stradcom has never meant to deprive the LTO or any government agency for that matter of any earnings. In fact, Stradcom has already increased LTO earnings by over 200 percent since the LTO’s computerization.”
The COA said that the projects that Stradcom had been involved in using the LTO database consisted of the online and real time uploading of emission test results from the Department of Trade and Industry and the accredited private emission testing centers; a deal with the Metro Manila Development Authority to maintain a system that would include online uploading of its apprehensions; a system to interconnect the LTO and the Land Transportation and Franchising Regulatory Board; and the authentication and verification of Certificate of Cover for Compulsory Third Party Liability policies.
No LTO consent
The LTO should review the agreements between Stradcom and other agencies related to inteconnectivity fees, especially since the LTO’s consent was not sought before these deals were executed, and the LTO was not included in the agreements even though its own database was used, the COA said.
At the same time, the LTO should take legal action against its own officials and that of the Department of Transportation and Communication who allowed Stradcom to use its database without permission and compensation, to the prejudice of the government, it added.
The LTO should also take legal action against the agreements dealing with interconnectivity to determine their propriety and to establish the legal basis for imposing interconnectivity fees, the COA further said.
As for the collection of computer service fees, COA said that from 2003 to 2007, license applicants and vehicle registrants were made to pay the fees even though their transactions were manually processed.
Of the P340.719 million in computer fees collected from 2003 to 2007, P266.093 million had been paid to Stradcom while the remaining P74.625 million remained in escrow.
The COA said the amount in escrow should be remitted to the Bureau of Treasury. The LTO should also seek legal assistance to recover the amount paid to Stradcom.
Manual processing
According to the audit agency, applicants whose transactions were not computerized were still made to pay fees because the information technology service would be rendered later when the transactions would be uploaded into the central database using the “offline facility.”
This offline facility was an uploading procedure formulated by the contractor for the technical shortcomings of the system.
But the COA said the offline facility was not part of the LTO’s IT project with Stradcom, which was why the collection of computer fees from those whose applications were manually processed had no legal basis.
“Since the fees in question were collected from manually processed transactions, these rightfully and solely belongs to the government,” it said.
The COA also said it had questioned the payment of computer fees in previous reports, but “for one reason or another, management has yet to take appropriate action.” With a report from Paolo Montecillo