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THE Commission on Audit has found P241.87 million in tax deficiencies as well as anomalies in the Supreme Court’s procurement of computer sets, printers, and a service vehicle for former Chief Justice Ma. Lourdes Sereno.
In its 2017 audit report released last Monday, the COA said the SC paid employees of the judiciary P831.065 million additional cost of living allowances (COLA) in 2016 and P960.738 million in 2017 under the Judiciary Development Fund (JDF) but only withheld taxes from justices, judges, and a few personnel.
“Tax deficiencies on the JDF’s additional COLA has accumulated to P241,865,620.90 computed as of June 30, 2017 due to the continued non-withholding of taxes on the subject allowance granted in CYs 2017 and 2016, except those paid to Justices, Judges and some employees,” auditors said.
The COA said failure to deduct withholding tax was a violation of the BIR Revenue Memorandum Order No. 23-2014 because it deprived the government of revenues due it.
It emphasized that only “de minimis” benefits – small value privileges offered to employees to promote health, goodwill or efficiency – are not subject to income tax, withholding tax, or fringe benefit tax.
“The subject allowance is not among the de minimis benefits…yet taxes are not withheld from the additional COLA,” the COA added.
Based on the audit team’s computations, tax deficiencies of SC employees amounted to P29.453 million in 2016 and P15.674 million in 2017 while those of employees in lower courts totaled P129.841 million in 2016 and P66.897 million in 2017.
The SC, through its Fiscal Management and Budget Office (FMBO), notified the COA that there is a pending petition (G.R. No. 213446) filed by various government employees’ associations questioning the constitutionality of BIR Memorandum Order No. 23-2014.
It likewise gave assurances that if these benefits are later ruled to be taxable, the corresponding taxes will be deducted from the salaries and from other benefits of the concerned employees.
Also earning frowns from auditors were the tribunal’s procurement of computer sets and printers worth P8.18 million without public bidding, the purchase of a P5.11 million service vehicle for Sereno that specified a car brand and model, and a P2.1 million lease accommodations at Shangri-la’s Boracay Resort and Spa without complying with the requirement to canvass for quotations from two other five-star facilities in the same area.
In its comment to the audit findings, the SC said the choice of Boracay as a venue was decided in the previous meeting of the ACJM in Kuala Lumpur in 2014.
It added that four hotels in the area were actually evaluated for suitability other than the one eventually chosen. These were the Boracay Regency, Discovery Shores Boracay, and the Fairways and Bluewater Boracay.
The evaluating team headed by Justice Zaldy Trespeses selected Shangri-la Boracay Resort and Spa because it can provide sufficient number of rooms to accommodate the entire delegation, suitability of facilities for the events planned, and capability to meet security requirements.
Auditors said the SC did not observe the requirement for the conduct of a public bidding when it shopped for computers and printers worth P7,987,495, not counting the freight cost of P193,600.
“Management resorted to “shopping” or “small value procurement” as an alternative mode …instead of public bidding contrary to …RA 9184 (The Government Procurement Reform Law),” the COA said.
Asked to explain the lack of public bidding, the SC said the acquisition of the office equipment became urgent because of the simultaneous implementation of several Judicial Reforms Program like the eNotice (eSubpoena), eCoourt (automated hearings), and the Continuous Trial for Criminal Cases, all aimed at expediting court processes.
It said there would have been delays had the transaction undergone public bidding which would cause slow dispensation of court duties that will in turn “compromise the administration of justice.”
To obtain the best price, the Property Division claimed it obtained at least three price quotations from different suppliers.
Auditors, however, said breaking the purchases into small value procurement in order not to exceed the threshold amount of less than P1 million to “splitting” of contracts which is barred under procurement rules.
They likewise noted the absence of supporting documents, including requests for quotations from at least three suppliers, proof of posting at the Philippine Government Electronic Procurement System (PhilGEPS), Notice of Award and purchase order, and the recommendation of the Bids and Awards Committee to award the project to a supplier.
On the purchase of the service vehicle, the COA questioned the inclusion of the technical specifications of the Toyota Land Cruiser in the bidding documents and the benchmarking of the cost at P5,110,500 which was the set price of one Toyota Land Cruiser.“Such procedures prevented other supplier from participating and the reasonableness of the purchase price cannot be assured,” the COA pointed out.
The SC defended the move, saying no reference to any brand was included in the notice and only technical specifications were provided. The SC en banc approved the recommendation of the BAC through e resolution dated March 28, 2017.
Auditors, however, said the descriptions provided was “tailor-fitted” to the Toyota Land Cruiser which makes it a violation of RA 9184.
The lease of accommodations at the Shangri-la Boracay Resort and Spa during the 3rd Meeting of ASEAN Chief Justices and the Asean Law Association General Assembly on March 1 to 3, 2015 was likewise flagged in audit due to the absence of quotations from two other 5-star resort hotels on the island.
The COA said the requirement was set under the implementing rules and regulations (IRR) of RA 9184.
It said the SC should have submitted the rationale for the choice of Shangri-la Boracay Resort as venue, quotations from two other establishments with comparative facilities, and the abstract of canvass. |
