STATE auditors have questioned the sale of the Cebu International Convention Center (CICC) by the Provincial Capitol to the Mandaue City Government in 2018.
The Capitol was then under governor now Vice Gov. Hilario Davide III, while Gabriel Luis Quisumbing was at the helm of the Mandaue City Hall.
State auditors recommended that the current Capitol administration require those responsible for the transaction to explain why existing regulations, which required the conduct of a public bidding and prior approval of the Commission on Audit (COA), were disregarded.
The structure, which cost around P840 million to build, was sold for P300 million.
In their 2019 audit report, state auditors cited COA Circular 2017-003 as basis for the disallowance.
The circular states that real estate and their improvements by the local government unit “may be sold to other government or private entities under sealed bids, or by negotiation if a sealed bid has failed as defined herein at a price to be determined by the Committee on Awards.”
The circular also states that the disposal of any local government-owned properties is not only subject to approval by the local Sanggunian, but also by the COA in case the disposal is through negotiation regardless of the value of the property to be disposed of.
On Aug. 22, 2017, the Provincial Board and the Mandaue City Council allowed Davide and Quisumbing, respectively, to enter into a deal to mutually terminate the joint venture agreement and contract to sell for the CICC.
But state auditors noted the documents embodying the provisions of the agreement did not mention any failed bidding previously conducted by both parties.
The agreement provided for the proposed sale of the CICC to Mandaue City for P300 million on the condition that ownership of the property shall not be transferred to the City unless and until full payment of the purchase price has been received by the Province and the Province has executed the deed of absolute sale, which conveys to the City all the titles, rights and interest in and over the property.
The deed of absolute sale was eventually executed on Oct. 2, 2018, conveying that Mandaue City has absolute and unconditional ownership of the CICC.
“In so doing however, the Provincial Government did not secure the required COA approval of the negotiated sale prior to the execution of the deed of absolute sale, thus review of the reasonableness of the selling price as well as the propriety and conformity of the sale with existing regulations was not conducted,” state auditors concluded.
Aside from requiring those responsible to explain the questionable transaction, state auditors also recommended that COA approval be secured for disposal of real properties and improvements through negotiation before the contract of sale is perfected.
During their exit conference with state auditors, Gov. Gwendolyn Garcia said she already sent a letter to Davide on Dec. 12, 2019 requesting an explanation on the audit observation.
She also instructed Provincial Administrator Noli Valencia to send a follow-up letter to Davide, as the latter has yet to reply or comment on the matter.
SunStar Cebu tried to get Davide’s side on the matter, but text messages and calls to him were unanswered.
Just before she was elected governor, Garcia had vowed to hold accountable officials from the previous administration who abandoned and sold the CICC.
In previous reports, Davide said he decided to sell the CICC after two earthquakes and typhoon Yolanda heavily damaged the building. (JKV, ANV)