COA finds Montano’s P12M contracts questionable

MANILA, Philippines – Cesar Montano approved questionable contracts worth P12.2 million for the cost of performers and bands during the Intramuros Revival concert and the Fusion music festival in 2017, according to a report by the Commission on Audit (COA).

The COA released its 2017 audit report of the Tourism Promotions Board (TPB) which Montano headed until May this year when he resigned following the P80 million Buhay Carinderia project.

In both incidents, Montano bypassed the TPB’s Board of Directors (BOD) and the Bids and Awards Committee (BOC) to secure the contracts for suppliers, and violated procurement rules and TPB's own rules in the process, according to auditors.

TPB employees complained about Montano to the Presidential Action Center (PACE) as early as March 2017, but he would leave only in May this year due to mounting pressure brought about by the Buhay Carinderia project. (READ: Cesar Montano’s travels excessive – COA)

Intramuros Revival

The Intramuros Revival Project is a concert of sorts that launched a new face of Intramuros with performing bands.

According to COA, the TPB “provided full support for the implementation of the 2nd phase of the Intramuros Revival Project.”

As such, the TPB had to hire the performers, for a contract of P1 million. However, Montano rejected the BAC resolution awarding the contract to the highest rated and most responsive bidder “without stating the reasons”.

“Instead he entered into a negotiated contract with the losing bidder as representative of the entertainers for the Second Phase of the Intramuros Revival Project contrary to Section 41 of RA 9184 (Government Procurement Act),” said COA.

According to an informed source, the winning bidder was JGL Intuitive Solutions Corp but the contract was awarded to losing bidder Jumpstart Productions.

Jumpstart Productions' Wilfredo Lozada entered into agreements with Montano for 7 performers, according to a list by the TPB:

The performers, COA said, were not even registered with the Philippine Government Electronic Procurement System (Philgeps) which is a requirement for doing business with government.

A negotiated procurement, which Montano did for Jumpstart, is only allowed if the supplier is a highly technical consultant, or if no other supplier can provide the service.

Montano said the BAC had no basis for approving the other bidder because both got low ratings.

“It was HoPE’s (Head of Procuring Entity or Montano in this case) prerogative to enter into a negotiated procurement since he believed that the entertainers of his choice were more capable of providing a world class service instead of the winning bidder recommended by the BAC,” said the TPB in response to COA, as quoted in the report.

“The COO believed that he had implemented the 2nd phase of the Intramuros Revival Project in good faith and requests an impartial audit on the first phase of the project,” said COA.

Fusion Music Festival

For the Fusion Music Festival held at the SM Mall of Asia in January 2017, the TPB entered into an P11.2-million agreement with the fusion manager without first getting the approval of the board.

Under the agreement, the TPB provides the sponsorship worth P11.2 million while the organizer provides the admission tickets, event plugs, and media booths.

The agreement violated TPB rules, said COA.

“We noted that the agreement with a contract price of P11.200 million was approved by the COO on March 31, 2017, even though the Calendar Year 2017 projects, budgets and work plans were not yet approved by the TPB Board, and there was no board resolution issued for the approval of the said project,” said COA.

Even worse, the organizers did not submit a liquidation report to show how they utilized the P11.2 million.

“It was also stipulated in the said agreement that the company shall submit not later than April 27, 2017 a liquidation report showing actual utilization of the sponsorship fund covered by the agreement supported with relevant proof of expenditures such as but not limited to vouchers, official receipts, sales invoice and checks. TPB paid the P11.200 million in tranches from February-April 2017. However, the company did not submit the required liquidation report,” said COA.

Montano justified it by saying that the vouchers and checks were below P5 million and therefore did not need the signature of the chairman of the board. Rappler’s source said transactions under P5 million should be scrutinized because the rule of doing away with the board’s approval for these expenses is being used as shield.

However, the COA said: “The total project cost was P11.200 million (over the threshold of five million set by the Board) and the FY 2017 was not yet approved by the BOD, then it was required/necessary that this project be approved by the Chairman of the Board.”

Montano resigned around the time that Tourism Secretary Wanda Teo also resigned amid corruption scandals. The Office of the Ombudsman has launched its own investigation of Teo, but it’s unclear if it did the same with Montano. – Rappler.com

Lian Buan

Lian Buan covers justice and corruption for Rappler. She is interested in decisions, pleadings, audits, contracts, and other documents that establish a trail. If you have leads, email lian.buan@rappler.com or tweet @lianbuan.

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