Mandaue City, Philippines – State auditors wrapped up an annual audit of the Mandaue City government’s operations for 2006 and found that P69 million worth of imported garbage bins, hospital equipment and construction materials purchased over the past three years remained idle and unused.
The findings referred to transactions made during the term of former mayor Thadeo Ouano, whose administration was hounded by the discovery last year of stacks of new garbage cans lying unused in a warehouse.
In its report, the Commission on Audit (COA), confirmed the waste, which was first reported in Cebu Daily News in July last year.
COA noted that Mandaue City was already paying amortization for the P110 million Development Bank of the Philippines (DBP) loan it used to buy the garbage bins in 2005 and for which P3.4 million was paid last year as “unnecessary interest.”
The interest was an “unnecessary expense”, auditors said, because 4,716 garbage cans or 55.56 percent of the entire delivery were lying idle, exposed to the elements, in a stockyard in Jagobiao.
Mayor Jonas Cortes was urged to distribute the trash bins in the barangays so they could be useful and the city can get maximum value for its loan.
State auditors said “inadequate planning” resulted in the deterioration of some of the purchased items and the “unnecessary” disbursement of government funds.
It advised Mandaue City officials to practice “sufficient planning” and “prioritization” in future projects to avoid unnecessary allocation of funds.
New equipment was purchased for the Mandaue City Hospital only to end up still in its packing crates because the annex building where it was to be installed wasn’t finished yet.
Other lapses noted by COA: P9.8 million in overpayments released to elected officials as part of a 2006 honorarium and the contract cost that was paid to the phase I contractor of the unfinished Mandaue City public market.
Auditors also questioned the payment of P1.2 million to 10 government consultants hired by former mayor Ouano. The hire was made without undergoing the approved selection process.
State auditors reviewed the city’s financial statement in 2006 “to ascertain the propriety of financial transactions and compliance of the local government unit to prescribed rules and regulations,” wrote Delfin Aguilar, COA cluster director.
For the trash bins, the COA found that bins earlier given to barangays were also found “not utilized but only kept stored in some areas of the barangays.”
“Additional expenses were also wasted especially on the excess bins purchased due to the higher dollar exchange rate at the time of the purchase importation.”
Mandaue City used a P110 million DBP loan and P13 million from its own coffers to buy five compactor trucks worth P69.89 million and 8, 502 garbage bins worth P53 million from the Singapore-based company Schaefer Systems International.
But as of December 2006, the city only used half of them or 3, 786 garbage bins.
The 50 litter-bins cost $98.50 each while the bigger bins cost up to $415 each.
When Cebu Daily News (CDN) first reported the unused bins in July, they were stacked in an uncovered portion of the empty Uniwide structure at the Reclamation Area. After the adverse publicity on the idle garbage cans, the trash bins were transferred to a less visible government stockyard in Jagobiao.
In the unused hospital purchases, Mandaue City bought on Jan. 27, 2006, P17.5 million worth of hospital equipment even if the Mandaue City Hospital annex building where the equipment were to be installed was still unfinished.
The purchase included a fluoroscopic x-ray machine with a TV monitor and accessories worth P5.5 million, laboratory and medical equipment worth P11. 15 million and a sound system worth P.85 million.
But the S-ray machine was still inside its crate while the sound system was left at the sports commission office, when COA inspectors conducted an inventory of government purchases.
“As a result of this deficiency, the constituents were deprived of the immediate use of these modern and high-tech equipments and other facilities and the LGU were deprived of additional income which could have (been) earned from the use of the said facilities,” the audit report said.
Hospital chief Dominga Obenza told auditors during their exit conference that the purchases were made because she thought the new hospital annex would be finished before the items arrived. But the project was only 62.27 percent completed by year end.
Educational materials worth P1 million were also unused because of “obsolescence” while P12.56 million worth of construction materials bought in 2005 and 2006 for the Mandaue public market phase II and the Casili barangay hall remained unused and started to deteriorate, according to COA.
During inspection, auditors found the materials were still stocked in the engineering warehouse and near the market construction site where they were exposed to the elements.
Mandaue officials were urged to use the construction and education materials.