Boracay sanitary landfill: COA questions Sualog over P51-million disbursement

BORACAY – The Commission on Audit (COA) questioned the disbursement of P51,713,780.72 made by the administration of Malay, Aklan acting mayor Abram Sualog for ECOS Sanitary Landfill and Waste Management Corp.

In an Audit Observation Memorandum, COA casted doubt on the “propriety, validity and correctness of the transactions” involving the disbursements on the hauling of solid waste and the management and operation of an Eco-Tourism, Engineered Sanitary Landfill undertaken as a Public-Private Partnership (PPP) activity.

It should have been under Republic Act 9184 (Government Procurement Act), according to state auditors.

The Audit Observation Memorandum was dated Feb. 12, 2019.

It may be recalled that the local government of Malay and ECOS Sanitary Landfill and Waste Management Corp. entered into a PPP.

The local government disbursed checks in eight tranches starting Nov. 26, 2018 just one month after then Vice Mayor Sulog assumed post as Acting Mayor when Boracay Island was subjected to a six-month closure for a massive cleanup.

For the month of January this year, four separate checks totaling P27,991,859.71 were released.

The multi-million disbursements were made on the following dates:

* Nov. 26, 2018 – P10,511,030.14

* Nov. 26, 2018 – P2,956,949.77

* Dec. 27, 2018 – P7,409,451.37

* Dec. 27, 2018 – P2,844, 489.73

* Jan. 10, 2019 – P10,618,202.25

* Jan. 10, 2019 – P3,118,764.11

* Jan. 22, 2019 – P3,177,043.10

* Jan. 22, 2019 – P11,077,850.25

According to COA, the disbursements “can be interpreted that the Private Partner should render the services first before being paid by the LGU thus it can be construed as simple procurement of services and should follow the Revised Rules and Regulations of RA 9184.”

In this Audit Observation Memorandum signed by Audit Team Leader Merle A. Maglunob and OIC Supervising Auditor Loda P. Ocheda, COA stressed that a PPP activity cannot be observed on the kind of transactions made.

“The Private Sector should have been responsible in financing for operation and maintenance of the particular undertaking normally without cost for the LGU. Although the undertaking is to be structured in such a way that the private sector gets a reasonable rate of return on its investment, they are allowed under Section 12.16 of RA 7718 to collect tolls, fees, rentals and charges subject to the approval by the Approving Body as repayment schemes.”

COA noted that these repayment schemes were not present in the PPA agreement. Instead, the LGU were billed by the private sector for its services rendered.

The COA also emphasized that the PPP should have been a tool to minimize the government spending.

“It should address the limited funding resources for local infrastructure or development projects of the LGU thereby allowing the allocation of public funds for other local priorities,” it stated.

As of press time, Sualog could not be reached for comment./PN


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