COA flags DBM Procurement Service over P95.46M COVID-19 'slow-moving' supplies

State auditors have flagged the Procurement Service of the Department of Budget and Management (PS-DBM) over its lack of a clear policy on handling inventories that led to P95.46 million worth of "slow-moving" COVID-19 supplies.

In its 2020 audit report, the Commission on Audit (COA) said PS-DBM placed orders for 113.95 million pieces of surgical masks and 1.32 million pieces of face shields on April and May 2020, a period when prices were “so high” because of high demand.

The masks were purchased from various suppliers for P13.50 to P27.72 per piece, while the face shields were bought for P120 each.

PS-DBM’s market surveys for the procurement were based on a Department of Health (DOH) circular dated March 2020 that stated the suggested retail price (SRP) was P28 for face masks and P120 for face shields.

COA said Regional Depot (RD) 11 received its share of the procured masks and shields “when the selling prices in the local market already dropped.”

State auditors said several RDs wrote to the PS-DBM to inquire about discounts so that they could sell the supplies at a lower cost, “however, it was reported that no reply was received by them.”

COA said it requested and received a copy of a September 2020 DOH memorandum indicating that the updated SRP per piece was P2 to P4 for face masks and P26 to P50 for face shields.

In contrast, PS-DBM’s selling price per piece was P14.04 for face masks and P124.80 for face shields.

“There is a wide gap between the PS-DBM selling prices and DOH SRPs. As a result, surgical face masks and face shields are now slow-moving items in the warehouses of the RDs,” COA said.

State auditors also said many client agencies opted not to purchase from the PS-DBM due to its high selling price.

“If PS-DBM had delivered all of the items when the demand was high, these items could have been sold immediately at a selling price at par in the market in the total amount of P99.27 million,” COA said.

“It was only in September 2020 that DOH implemented the updated SRPs. From May 2020 to September 2020, the PS had the opportunity to sell items at par in the market, yet these items remained unsold at the end of the year,” it added.

COA said that inventories must not take more than a year to be delivered or sold. It also said marketing strategies should be in place to ensure the salability of supplies before expiration.

State auditors said PS-DBM agreed with their recommendations to establish a clear marketing strategy and regularly monitor the performance of PS-DBM divisions or groups in charge of the movement of inventories.

GMA News Online reached out to the DBM for comment but has yet to receive a response. —KBK, GMA News