COA asks Ombudsman to look into ‘irregular’ BSP purchase in 2002

MANILA, Philippines – The Commission on Audit (COA) asked the Office of the Ombudsman to investigate former officials of the Bangko Sentral ng Pilipinas (BSP) in connection with a P17.15-million deal in 2002.

In the 24-page decision dated August 18, state auditors affirmed the notice of disallowance issued against the purchase of a fire suppression system which was found to be substandard. 

Facing possible criminal and administrative charges are former BSP deputy governor Armando Suratos, as well as Disbursement Control Committee (DCC) and Bids and Awards Committee (BAC) members Evelyna Avila, Wilfredo Domong, and Eduardo Magahis.

Also under investigation are director Reynaldo Pinangat, acting deputy director Edgardo Reyes, officer-in-charge Michael Gesmundo, Bank Officer II Ismael Bacarse, and contractor Builders International First Defense Incorporated (BIFDI).

BIFDI completed the turnover of the fire suppression system in 2003. But in the same year, it was found to be substandard as the cylinder tanks used were fabricated in a local machine shop instead of being imported from the United States as stated in its papers.

Findings of the National Bureau of Investigation (NBI) and the BSP’s Security Investigation and Transport Department show that BIFDI submitted falsified documents during the pre-qualification process.  

It was also discovered that at least 31 locally-fabricated cylinders were passed off as genuine Kiddie cylinders, HCFC-123 gas was used in the fire extinguishers instead of FM-200 as specified in the contract, and the BSP failed to conduct the post-qualification process. 

“The DCC/BAC cannot feign ignorance nor claim that they acted in good faith in relying on the recommendation of their subordinates. Section 16 of RA No. 7653, the New Central Bank Act, requires every employee of the BSP to exercise extraordinary diligence in the performance of his/her duty,” COA said. 

“[The committee] failed to evaluate the eligibility of the prospective bidders properly. No post-qualification was conducted which led to the qualification of, and awarding of the contracts to an unqualified contractor, and to the eventual irregular and unnecessary disbursement of BSP funds.” – Rappler.com