SBMA per diem not authorized—COA

MANILA, Philippines – The Commission on Audit has found that the continuous granting of the P20,000 per diem given per meeting to the Subic Bay Metropolitan Authority’s board of directors in 2009 did not have permission from the Office of the President.

The granting of the unauthorized per diem resulted in the P5.7-million overpayment of claims, the COA said.

In its 2009 report on the SBMA, the COA said that the P20,000 per diem had been allowed in previous years because of an exemption from the Office of the President from Administrative Order 103, which suspends the grant of additional benefits and sets the maximum per diems, honoraria and other fringe benefits of non-full time officials and members of governing boards and committees at P20,000 per month.

But there was no such exemption coming from the President in 2009, said the COA report.

“However, similar payments of claims were continuously extended to the Board of Directors in the ensuing year, 2009, despite the absence of proper authority from the OP,” it said.

But it added that it allowed the payment of per diems from August to December 2009 in pre-audit subject to the management’s commitment to submit the copy of the Office of the President’s approval of their request for exemption.

The COA noted that for 2009, the management paid P8.8 million in per diems of the board of directors. But only P3.18 million of this was authorized, with the rest of the amount lacking any legal basis.

It recommended that the SBMA immediately submit the copy of the President’s approval of its request for exemption from AO 103.

The SBMA agreed to do so, and it also stopped the practice of paying per diems exceeding P20,000 per month. It also committed to refund the unauthorized per diems amounting to P5.7 million should it fail to get an approval from the Office of the President.

The COA also found that the project consultant of the Subic Bay Port Development project failed to conduct “an adequate and more comprehensive review and evaluation” of the variation orders on the project, which led to the overstating of the contract by P23.77 million.

The local cost component of the project was at P1.123 billion, while the foreign component was 9.004 billion Japanese yen. The consultancy of the project was handled by Oriental Consultants Co., Ltd.

“The noted lapses on the part of the project Consultant (OCCL), including the SBMA Technical Working Committee, PMO and Engineering Departments in the conduct of review and evaluation of VOs placed the Authority in a disadvantageous position,” the COA said.

According to the COA, a review of the variation orders showed that certain work items were unnecessary. In other times, improper unit costs were applied. COA Technical Audit Specialists also found deductive costs amounting to P13.48 million.

COA had submitted the review and evaluation reports on several variation orders to the SBMA management in February, and it agreed that the P13.48-million overpayment would be deducted from the contractor’s retention money.

It also recommended that P23.77 million, or up to the extent applicable, be deducted from the amount due to the contractor, and if warranted, the consultant be made liable for the overpayments. The SBMA agreed to these. –Leila B. Salaverria, Philippine Daily Inquirer