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CoA sniffs ‘Free WiFi’ fraud

Hananeel Bordey



The Commission on Audit (CoA) has questioned the Department of Information and Communications Technology (DICT) for transferring P1.259 billion to the United Nations Development Programme (UNDP) for the Free WiFi Access in Public Places Project.

The CoA, in its 2018 Annual Audit report, disclosed that the DICT agreement lacked documents to support that the government agency could not implement the project on its own to justify the need for a deal with UNDP.

The agency said the DICT’s Pipol Konek project was provided with P1.739 billion under the 2018 national budget. Nearly all of the fund went to the UNDP.

It was also under the DICT’s annual procurement plan (APP) for 2018, specifying public bidding as procurement mode. But it was amended in the 5th supplemental APP where it provided that Pipol Konek will be implemented with the engagement of the UNDP.

The CoA reiterated that lack of documentation showing empirical data that the DICT lacks the capacity to undertake the specific procurement project caused the project to be red flagged.

“Management could not provide documentation showing empirical data that DICT lacks capacity to undertake the specific procurement project which is one of the underlying considerations that should be present before resorting to UNDP’s assistance,” the CoA said.

In the Project Document (PD) of Pipol Konek, the DICT said that “challenges in the bidding and implementation process, limited access to cost-effective and up-to-date technology options, as well as limited capacity of Philippine telecommunications companies, have slowed progress toward this goal.”

This was reiterated in a resolution of the Bids and Awards Committee (BAC) dated 25 September 2018 which justified the recommendation to engage UNDP as the implementing partner of the DICT.

CoA mentioned that then DICT Acting Secretary Eliseo Rio stated under an undated certification that “the engagement with the UNDP is necessary in achieving the effective and expeditious resolution of the desired targets, and is thus most beneficial to the DICT and in the best interest of the Government as evidenced by the Cost Benefit Analysis.”

However, the auditing agency noted that the Cost-Benefit Analysis (CBA) did not show any comparison of costs and benefits, quantitatively and qualitatively, in case the project will be implemented by the Department and if implemented by UNDP.

It added that even if the advantages on availing UNDP’s assistance were mentioned in the CBA, there was no statistics presented and documents submitted showing UNDP’s capability to deliver the Project in an efficient, economical and timely manner.

The CoA also said that there are provisions in the Financial Agreement and the Project Document that were either ambiguous or has divested control of the said project.

“According to the Project Manager, the FA was wholly prepared by the UNDP and the terms therein cannot be changed by the Department, thereby constituting a contract of adhesion,” the state auditors said.

Moreover, the engagement with the UNDP was not cost-effective on the part of the government as the DICT was obliged to pay a ₱64,861,172.29 service fee.

The CoA explained that this only added another cost layer in the sense that instead of the DICT directly dealing with the contractors through public bidding, it was now the UNDP which did so, hence the additional five percent service fee.

DICT was also flagged for the slow implementation of the Pipol Konek project for failing to achieve the 13,024 sites as the agency only installed 3,509 sites at year-end.

“Thus, with the noted slow project implementation in CY 2018, the Philippine government’s efforts in enhancing internet accessibility across the nation is adversely affected, opportunities not bolstered and the growing digital divide not completely bridged,” the CoA said.

There were also procedural lapses in the issuance of Certificate of Availability of Funds and Letter of Intent in DICT’s partnership with the UNDP.

The CoA also asked the DICT to prove that it was necessary to forge an agreement with UNDP.

DICT was also urged to require the free WiFi Office to meet operational targets and outputs as well as to fast-track the implementation of the project.