COA slams NPO over ‘illegal’ jobs awarded to private printers

THE National Printing Office (NPO) had dealings with private printers without valid contracts amounting to P121.69 million, according to the Commission on Audit (CoA) in its annual audit report on the agency for the year 2018.

CoA said the NPO’s continued engagement with private printers without any legal contract violates Section 4(6) of Presidential Decree NO. 1445 and Republic Act No. 9184 or the Government Procurement Act.

CoA also noted the amount of P120.9 million which the NPO specified as rental fee of the printing equipment was “already tantamount to total production cost” and constituted the act of subcontracting.

In addition, CoA discovered that the NPO’s Equipment Lease Agreements with private printers had already expired last 30 September 2017.

However, the agency continued its alleged lease of equipment without holding a competitive bidding required by law.

CoA also noted that in 2018, the printing agency accepted procuring entities and accomplished 249 work orders under the “Leasing” work orders account amounting to P121,691,215.37.

“However, based on records, NPO did not have any valid Lease of Rental Agreement for 2018 nor did it conduct public bidding for the lease of printing equipment; thus, the work orders under “leasing” amounting to P P121,691,215.37 were illegal,” the CoA report said.

CoA also reprimanded NPO for not abiding with the audit recommendations the agency made in 2017.

State auditors said that despite the recommendations and the issuance of the Notice of Disallowances (ND) for the irregular payments to private printers of the rental fees for their equipment, NPO has continued subcontracting its printing service “in guise of leasing.”

In 2018, the CoA paid 12 private printers a total of P120.9 million for alleged rental fee although the documents show that the amount paid is for the whole production cost.

“Therefore, it was a subcontract and thus, irregular,” CoA stressed.

CoA added that upon their review, it was revealed that the alleged rental fee was computed at 85 percent of the production cost estimate as shown in the work order.

“A rental fee/expense is just a component of Manufacturing Overhead; thus paying 85 percent for rental of printing machines is grossly erroneous,” CoA further explained.