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The National Dairy Authority’s (NDA) milk production project in Mindanao, aimed at bolstering the national feeding program, has ended in failure.
The government invested P28.62 million in setting up and running the Sterilized Milk Plant (SMP) in the Davao region. The two-year-old project, however, had to be abandoned due to losses.
The Commission on Audit (COA) warned the NDA that the project’s closure falls under the category of “unnecessary expenditure or use of government funds” even as it recommended administrative sanctions against officials and personnel accountable for the mismanagement and wastage of government funds.
The NDA has explained that technical problems during the project implementation forced them to halt plant operations, asserting that shutting down was a necessary step to prevent further losses.
As if the loss of resources wasn’t bad enough, state auditors pointed out how beneficiaries of the Masustansyang Pagkain para sa Batang Pilipino Act in public schools under the Department of Education (DepEd) and the Department of Social Welfare and Development (DSWD) were shortchanged.
State auditors said, “Due to the suspension of operation of the SMP after the first batch of milk production, …machineries and equipment in the total amount of P7.59 million were no longer utilized and/or remained idle.”
The COA said the NDA took action by terminating the supply contract for the defective packaging and, in turn, shutting down the entire plant, leading to the wastage of P1.24 million worth of perishable raw materials.
“The implementation of the SMP Project was stalled in July 2021 due to defects in the pouches that were procured for the production of pouched sterilized milk, with 40 per cent of the production wasted,” read part of the COA report.
To avoid further losses, the NDA decided to lend 7,225 kilograms of sugar and milk powder to cooperatives and dairy partners. Yet, the lack of a written agreement poses challenges in recovering the value of these goods, according to state auditors.
Auditors said some P866,375 worth of cocoa powder, refined sugar, and milk powder were left exposed to extreme temperatures in a container van, raising concerns about possible chemical, physical, and bacteriological changes.
Adding to the wastage are two million hard plastic straws and 36,000 shipping boxes left idle, slowly deteriorating over several months, auditors found out.
They said, “We recommended that top Management … consider imposing administrative sanctions against officials and personnel concerned who were remiss in their duties that resulted in the wastage of government funds.” – Rappler.com