DOH loses P338 million due to alleged hospital project irregularities in Albay

LEGAZPI, Philippines – The Commission on Audit (COA) has started looking into the alleged irregularities surrounding a P589.6-million building construction project at the Bicol Regional Hospital and Medical Center (BRHMC) in Daraga, Albay province.

This was confirmed by Health Undersecretary Nestor Santiago, concurrent regional director of the Department of Health (DOH) in the Bicol region, although he declined to give details about the result of an initial investigation conducted by his office on the construction of the five-story and 600-bed hospital building.

The DOH had sought the help of the state auditors in digging into the alleged irregularities which resulted in huge losses to the health department apparently due to a collusion in the implementation of the project that was supposed to decongest the hospital. 

The bungled project could have substantially increased the bed capacity of the BRHMC from the current 450 beds to 1,050. The BRHMC, which caters to an average of 492 outpatients and 66 patient admissions daily, is one of the most congested hospitals in the region.

The DOH investigation was prompted by the report of a monitoring team from the Department of Health Central Office last June 3, 2022, which inspected the project funded under the Health Facility Enhancement Program (HFEP)..

The monitoring team noted the discrepancy between the payment released compared to the work accomplishment of the Manila-based contractor identified as New Vic Construction Corporation.

Acting on the report, a fact-finding team, composed of Dr. Rose Balisnomo-Rempillo as chair, Dante Atento, and lawyer Jaime Guerrero as members, was created by the DOH-CHD-Bicol as directed by the central office.

Documents obtained by Rappler showed that the contract agreement was signed on February 8, 2018, by Dr. Rogelio Rivera, who at the time served as the BRHMC chief, and NVCC managing head Vivian Llorando. The agreement outlined a 720-day work duration with a target completion date of December 25, 2020. Rivera has since retired from government service.

Furthermore, the documents indicated that the contractor received payments totaling P338.782 million, representing a 53.91% completion of the work. These payments were disbursed in three installments: P88.440 million as a mobilization fund, P72.041 million for achieving 17.77% completion as the first payment, and P146.512 million for reaching another 36.14% completion. Subsequently, an additional payment for retention money was released.

The monitoring team from the DOH central office noted a gaping discrepancy in the payments compared to the actual work done on the project as certified by the Engineering and Facility Management Office (EFMO), headed by Engineer Richard Serrano.

The EFMO had certified that the work accomplishment of the contractor had reached 53.91% when in fact the actual accomplishment was only 14.68% based on the inspection report of the DOH monitoring team.

The DOH team said this resulted in an overpayment of P213.103 million, which further increased after the new RHMC chief, Dr. Raymond Raborar, who assumed office in May 2021, approved the release of the retention money, amounting to P31.788 million.

The team said the retention money should have been held by the BRHMC until after the project had been turned over to the agency purposely to answer for any defect or deficiency in the project.

In a February 19 interview, Raborar asserted that the release of the retention money was justified as it was supported by a certification from former hospital chief, Rivera, who stated “that construction work was on schedule and was satisfactorily undertaken.”

Asked about the discrepancies, Raborar said he directed both the financial management office (FMO) headed by Mary Nathalie Cadag and the chief of the EFMO to explain the noted inconsistencies between the accomplishments and the actual payments made.

The response of the two offices, however, did not give a clear explanation as Cadag pointed to the EFMO as the source of the work accomplishment certifications which they used as bases for the payments. 

The EFMO pointed back to the FMO as the source of the request for them to issue such certification “for financial requirement purposes only.”

The investigation ordered by Raborar ended with this stalemate between the two offices.

Meanwhile, the contractor, NVCC, abandoned the project in September 2022 despite its earlier proposal for a catch-up plan, the records showed.

Raborar said the abandoned project would have to be demolished eventually because its structural integrity was already compromised. The demolition, however, would take place after they receive the green light from the COA.

The building’s foundation has constantly been soaked in flood water, and hospital observers said it has become a nuisance and a breeding ground for mosquitoes.

A report from the hospital chief’s office revealed that aside from the five-story building, other HFEP projects at the BRHMC suffered the same fate, including the Dialysis Center building, Out-Patient building, Dialysis Center Phase II, Patient Support Services Building Phase II, Cancer Center Phase II, and the Cancer Center building. – Rappler.com