THE Commission on Audit (COA) has rebuked the Philippine Statistics Authority (PSA) for failing to explain why it failed to take over the operations of the computerization of the Civil Registry System (CRS) controlled by Unisys years before the 12-year agreement with the US company ended in 2012.
In its 2015 audit of the PSA, the COA said the agency claimed it had secured the approval of a higher authority to allow the three-year extensions for Unisys, a US company, despite the clear stipulation in the original contract that the then National Statistics Office (NSO), the PSA’s predecessor, was supposed to man the information technology system of the CRS in 2007, or five years before the contract expired in 2012.
The COA said on page 88 of the 2015 audit that, “to achieve the agency’s mandate, the Authority [PSA] in Current Year [CY] 2000 conducted the bidding for the computerization of the system and contract for 12 long years running from CY 2000-2012. In such contract, there is a provision that before the end of the last five years, such system provided by service provider will be operated by the Authority [then-NSO]. However, from CY 2012 up to this period, two extension contracts were already executed and the SP [service provider] operates the system.”
Thus, the contract is very clear that by taking over the system, there would be no need for CRS-Information Technology Phase II (CRS-ITP2), but instead of taking over the system, NSO allowed Unisys to secure two extensions to its original contract.
This action on the part of the then NSO and now PSA has earned brickbats from the COA, which noted that the extensions were allowed by a “higher authority” that had not been named.
That “authority” could be Malacañang, Department of Finance (DOF) or the National Economic and Development Authority (Neda), which eventually approved the extensions through the Neda-Investment Coordinating Committee (Neda-ICC).
However, the legality of such an extension could have been raised with the Department of Justice (DOJ), which could issue an opinion on the matter.
PSA argued that the extension agreements with Unisys were approved by Neda-ICC and said the decision was based on fears that failure to renew the contracts would mean reduction in revenues owing to delays in operations and failure to replace defective machines, while hiring competent information-technology (IT) staff members would be a problem since the budget for hiring manpower could not be provided immediately by the government.
The COA also questioned why Unisys and the then-NSO were unable to provide data on the total number of civil registry documents processed from 2000 to 2001, thus limiting the COA’s assessment of the first phase of the IT project for CRS.
It noted that, based on the data collected, the demand for civil-registry documents grew to 14 million copies in 2015, for a total increase of 320.43 percent from 2002.
Unisys is a US-based company that also services the information system of the global banking system for quick financial transactions and has contracts with various US armed services and federal agencies.
PSA Director General Lisa Grace S. Bersales and Unisys executive Juan Ingersol Castro signed the P1.59-billion contract for the CRS-ITP2 on September 30, despite nagging questions about an agreement that gives Unisys full control of all civil-registry documents nationwide, with government getting only 45.5 percent of the revenues.
Curiously, the PSA signed the contract despite the fact that the agency had a cap of 57.87 percent for the state in the original sharing provision.
In the 2015 audit, the COA said “the income realized from this project was shared by the service provider and the government, with the latter having a lower share than the former.”
However, the COA admitted on page 90 of the report that “the government shared more than the amount received by the SP if we include the documentary, expanded and percentage taxes from the CRS-IT project.”
COA also wondered why Unisys was still maintaining control of the CRS-ITP using government-owned facilities and earning a hefty income for a function that could well be taken over by the PSA.