The Ministry of Trade and Industry is renting a building in the Central Business District (CBD) without the approval of the Pubic Procurement and Asset Disposal BOARD (PPADB), the latest Auditor General report reveals.
In the audit report for the financial year ended March 2014, Auditor General Pulane Letebele said the MTI‘s tender committee approved leasing of the headquarters at a cost of P60.8 million, far beyond the expenditure threshold of P25 million appropriate to the committee.
According to the law, tenders above P25 million are beyond the jurisdiction of ministerial tender committees, and can only be adjudicated and approved by the PPADB. “This is yet another instance where public officers flagrantly disregard clearly laid down rules, resulting in public funds being spent without proper authority even where large sums of money, calling for extreme care and diligence, are involved,” read the report.
The report further revealed that as far back as 2011, the MTI had determined that it was essential for the ministry’s headquarters and all its five departments to be housed under the same roof to reduce administrative costs. To this end, the Auditor General said MTI officials had gone on a search of suitable accommodation and identified an office block in the CBD which was recommended to the Ministry of Lands and housing in March 2011.
However, Letebele said in August 2011, even before a response from the Ministry of Lands was received, MTI officials withdrew its earlier recommendation in favour of another office block, still in the CBD, on the grounds that rental of the first block was too high.
A lease was finally signed with the developer of the second office block with the agreement signed in December 2012, at a monthly rate of P1.01 million on the authority of approval of the ministerial tender committee. “However, as the total rental for the five year period amounted to P60.8 million, this was far beyond the expenditure threshold of P25 million appropriate to the committee,” read the report. In conducting their audit, The PPADB found out that in adjudicating over the tender, the Ministerial tender committee had failed in its duty to adhere to its expenditure limits.