2012-05-14

NPM 059-2012

Requesting Entity: Pasig River Rehabilitation Commission (PRRC)

Issues Concern: BAC Chairman and Approving Authority for Disbursement Vouchers

 

Details

Whether the designation upon the Chairperson of the Bids and Awards Committee of the authority to sign disbursement vouchers violates Section 11.2.5 of the Implementing Rules and Regulations of Republic Act 9184.

[T]he prohibition under Section 11.2.5 is intended to avoid any conflict of interest between the person who undertakes procurement and the one approving said transactions.

[T]he Commission on Audit (COA) Circular No. 2003-004 prohibits the Chief Accountant and personnel of accounting units to be regular members of the Bids and Award Committees as it is also necessary to ensure that the procurement and payment functions are segregated, in keeping with the rules and principles of good internal control and to avert the possibility of the conflict of interest, as prohibited under the rules.

The rationale behind the prohibition in COA Circular 2003-004 is applicable to the case of an official authorized to sign disbursement vouchers.

[T]he term "approving authority" in Section 11.2.5 of the IRR and the Generic Procurement Manual includes a person who undertakes payment since the approval contemplated therein also includes approval of disbursements. Therefore, it is important for the procuring entity to make a determination whether the official designated as the approving authority for the subject contracts is also the same officer who has the authority to approve payment for the same contracts. In both instances, said official cannot be appointed as the BAC Chairman to avoid conflict of interest and to maintain the integrity of the procurement process and contract implementation.