Pao 2017 05 - Hfep Doh

Performance Audit Report
PAO-2017-05
HEALTH FACILITIES
ENHANCEMENT PROGRAM
Program Implementation Gaps

Impacting on the Efficient,
Economical and Effective Provision
of Health Facilities and Equipment
Necessary for PhilHealth
Accreditation and Licensing
December 2017
Audit HEALTH FACILITY ENHANCEMENT PROGRAM
Highlights
DEPARTMENT OF HEALTH
Program Implementation Gaps Impacting on the Efficient,

Economical and Effective Provision of Health Facilities and
Why COA Did This Study
Equipment Necessary for Philhealth Accreditation and
One of the major challenges in the Philippine Licensing
health sector is providing access to
appropriate health facilities for the poor and
marginalized sector of the society. One of What COA Found
the banner programs of DOH which is directly
linked to this concern is the Health Facilities The HFEP is a national program that assists in enabling government health facilities
Enhancement Program (HFEP). The budget provide quality health care towards Kalusugan Pangkalahatan through the allocation
of the program has significantly increased of capital outlay for the procurement of health infrastructure and medical equipment.
from ₱1.7 billion in 2008 to ₱26.9 billion in
2016.
HFEP GO ALS
COA had determined the program goals,
objectives and performance indicators of the
HFEP. It also assessed the extent to which
the HFEP facilities and equipment helped in Improving primary Improving quality of Upgrading of DOH
the achievement of program goals and health facilities to LGU hospitals to hospitals and other
objectives. “gatekeep” and comply with DOH health care facilities
deliver preventive licensing and to provide
COA examined relevant laws, rules,
regulations, and related program guidelines,
health services and PhilHealth affordable quality
plans and reports to determine the Program’s PhilHealth accreditation tertiary care and
goals and objectives and assessed program accreditation specialized
implementation taking into consideration the treatments
principles of efficiency, economy and
effectiveness. The existing performance Issues relating to availability of project sites, realignment and modifications on the
indicators, targets and program results were projects, work suspensions, delays in the approval of Memorandum Of Agreement
reviewed to assess the extent of attainment (MOA) and permits by Local Government Units (LGUs) and delays in the release
of goals and objectives. of SARO impact on the timely implementation and completion of the project. Hence,
percentages of projects completed in the same year they were funded and
The audit primarily covered selected completion of projects as planned were below 50%, while delays in completion of
transactions of DOH Central Office, Health projects ranged from three months to more than a year. Similarly, procurement for
Facilities Development Bureau, and NCR the equipping of health facilities was not all based on the identified needs resulting
Regional Office during the period 2014 to in unutilized equipment in health facilities, used for other purposes and reallocation
2016. Transactions and data pertaining to of equipment from intended beneficiaries to other health facilities. Delayed
2017 and prior to 2014 including data for the procurement and delivery, undistributed equipment at DOH Regional Offices
nationwide program implementation were (ROs), Provincial Health Offices (PHOs), City Health Offices (CHOs), as well as
included in the review and analysis, when acceptance of defective and inferior quality of equipment at health facilities were
necessary. noted in the review of related documents and validation at the National Capital
Region (NCR) health facilities.
What COA Recommends
DOH should continue to improve its program Specifically, the project establishing 5,700 Barangay Health Stations (BHS) in
implementation by addressing the public schools in 2015 and 2016 was obstructed by ineligible and non-workable
implementation gaps not only through project sites that were not fully validated before project contracting and
remedial measures but through preventive implementation due to absence of specific guidelines. Adhering to the annual
measures by continuously enhancing the availment guidelines for HFEP project which requires validation and review of
guidelines and observing strict adherence proposals could have minimized if not prevented the inclusion of unworkable sites
thereto and to other relevant laws, rules and in the project. Delayed and non-completion of the total BHS contracted again
regulations promoting efficiency, economical impacts on the procured equipment which remain idle or undistributed to intended
and effective program implementation. school-based BHS.
Improvements and strengthening of controls
should be focused on procurement planning; These program implementation gaps in the provision of health facilities and
screening, review and approval of project equipment, as well as low budget utilization and absence of continuous and robust
proposals; acceptance and inspection of monitoring did not contribute to the efficient, economical, and effective
procured items; budget utilization; implementation of HFEP. These recurring gaps since 2013 are not totally resolved
coordination with LGUs and other in spite of remedial measures instituted to address them.
implementing partners; and monitoring for
efficient and economical provision of health Lastly, the DOH has yet to conduct a continuous and more comprehensive impact
facilities and equipment. Moreover, evaluation to apprise the implementers and stakeholders of the program’s level of
enhancement of program results indicators, success as far as attainment of goals.
target setting and impact evaluation reporting
to track accountability and extent of
attainment of HFEP’s desired future state will
bring about relevant information and
feedback for effective program
implementation.
PAO-2017-05
Health Facilities Enhancement Program
Contents
Letter 1
Background of Health Facility Enhancement Program 3
Level of program success not evaluated in the light of deficient

indicators, targets and reported program results depriving the
stakeholders with the relevant information for decision making 5
Equipping of health facilities affected by procurement not based on

identified needs, delays in procurement and distribution and
acceptance of inferior and poor quality equipment 14
Need to improve compliance with guidelines on selection of projects

and improve timeliness of implementation and completion of project
for a more efficient and effective provision of health services in
health facilities 22
Project establishing BHS in public elementary schools not effectively

and efficiently undertaken compromising the completion of 5,700
BHS 26
Need for efficient utilization of program budget to improve the impact

of providing and equipping health facilities 32
Implementation gaps recur due to some underlying causes 35
Conclusions 37
Recommendations 38
Agency Comments 40
Appendix I Observations on Indicators, Targets and Accomplishment per 2016

GAA and 4th Quarter QPRO 41
Appendix II Analysis of Procured Equipment for CY 2016 45
Appendix III List of relevant DOH Orders, Circulars and Memoranda for HFEP 46
Appendix IV COA Contact and Staff Acknowledgments 49
Tables
Table 1: Annual Priorities and Objectives of HFEP 2011- 2016 3
Table 2: Allocation of Budget to Infrastructure Facilities and

Equipment in Billion pesos 4
Table 3: Status of Projects Implemented from 2014-2016 23
Table 4: Details of implementation of 5,700 School-Based BHS 27
Page i PAO-2017-05
Contents
Table 5: Analysis of Project Sites for School-Based BHS 28
Table 6: Status of Project Implementation of 3,200 School- Based

BHS under Phase 1 as of June 28, 2017 30
Table 7: Status of Project Implementation of 2,500 School-Based

BHS under Phase 2 as of June 28, 2017 31
Table 8: Allotment vs. Obligations for HFEP FY 2014-2016 33
Table 9: Comparison between Estimated Unit Costs per PPMP and

Actual Unit Costs per Purchase Order of Selected
Items 34
Table 10: Common Audit Findings from COA CAARs and MLs for
2013 to 2016 35
Figures
Figure 1: Budget Allocated to HFEP from 2008-2016 4
Figure 2: Screening Process for Project Proposal under HFEP 5
Figure 3: Definition of Indicators for Monitoring and Evaluation 7
Figure 4: Key Performance Indicators 8
Figure 5: Desired improvement in access to quality health facilities 10

and services in 2016 from the 2010 baseline rates
Figure 6: Desired improvement in quality from inpatient and 11

outpatient care in 2016 from 2010 baseline rates
Figure 7: Comparison of facilities per NOH/KP and Per GAA, CYs 12

2012 to 2016
Figure 8: Vaccine Refrigerator procured in 2015 remained 15

unutilized at Kalawaan Health Center, Pasig due to
problem in power/electricity requirement
Figure 9: Autoclave, 50 Liters procured in 2014 remained unutilized 16

at San Jose Health Center, Pasig due to existing similar
equipment
Figure 10: Weighing Scale units procured in 2014 remained 16

unutilized at Las Pinas Lying- in Center
Figure 11: MRI procured in 2016 uninstalled at Jose Reyes Memorial 16

Medical Center
Page ii PAO-2017-05
Contents
Figure 12: Plasma Freezer procured in 2014 used for medicine and
reagents at Sta. Ana Hospital, Manila 17
Figure 13: Blood Bank refrigerator procured in 2014 used as

medicine cabinet at Santa Ana Hospital, Manila 17
Figure 14: Sample Photo of Olympus Binocular Microscope 20
Figure 15: Binocular Microscope units procured in 2015 remained 20

undistributed at Las Piñas City Health Office

undistributed at Caloocan City Health Office

undistributed for Navotas Health Office stored at
Bagumbayan North Health Center
Figure 18: Status of Phase 1 Project as of 28 June 2017 30
Figure 19: Status of Phase 2 Project as of 28 June 2017 31
Page iii PAO-2017-05

Abbreviations
AAR Annual Audit Report

ABC Approved Budget for the Contract
AHA Aquino Health Agenda
AOs Administrative Orders
AOM Audit Observation Memorandum
APP Annual Procurement Plan
ARMM Autonomous Region in Muslim Mindanao
BHS Barangay Health Stations
BeMONC Basic Emergency Obsteric and Newborn Care
CeMONC Comprehensive emergency obstetric and newborn
Care
CAR Cordillera Administrative Region
CAAR Consolidated Annual Audit Report
CHO City Health Office
COA Commission on Audit
COBAC Central Office Bids and Awards Committee
CONAP Continuing Appropriation
DBM Department of Budget and Management
DepEd Department of Education
DILG Department of Interior and Local Government
DM Department Memorandum
DOs Department Orders
DOH Department of Health
DOH-ROs DOH Regional offices
DPO Department Personnel Order
DPWH Department of Public Works and Highways
DV Disbursement Voucher
GAA General Appropriation Act
GPPB Government Procurement Policy Board
HFDB Health Facility Development Bureau
HFEP Health Facilities Enhancement Program
HFEP-MO Health Facility Enhancement Program Monitoring
Office
HBAC Hospital Bids and Awards Committee
IAR Inspection and Acceptance Report
IRR Implementing Rules and Regulations
ISSAI International Standards of Supreme Audit Institutions
JC Joint Circular
KP Kalusugan Pangkalahalatan
LGU Local Government Unit
LMD Logistics Management Division
MFO Major Final Output
ML Management letter
MO Management Office
MOA Memorandum of Agreement
NOA Notice of Award
NOH National Objective for Health
NCR National Capital Region
NCHFD National Center for Health Facility Development
Page iv PAO-2017-05
Abbreviations
NEP National Expenditures Program

NOH National Objective for Health
NTP Notice to Proceed
OFIM Office for Field Implementation and Management
OOP Out of Pocket
PHO Provincial Health Office
PIDS Philippine Institute for Development Studies
PPMP Project Procurement Management Plan
Philhealth Philippine Health Insurance Corporation
PITC Philippine Insurance and Trading Corporation
POs Purchase Orders
QPRO Quarterly Physical Report of Operations
RBAC Regional Bids and Awards Committee
RA Republic Act
RO Regional Office
RHU Rural Health Units
SARO Special Allotment and Release Order
SDN Service Delivery Network
SMART Specific Measurable Attainable Relevant and Time
bound/Trackable
TSEKAP Tamang Serbisyo Para Sa Kalusugan ng Pamilya
TWG Technical Working Group
WFP Work and Financial Plan
Page v PAO-2017-05
Republic of the Philippines
COMMISSION ON AUDIT
Commonwealth Avenue,
Quezon City
December 29, 2017
DR. FRANCISCO T. DUQUE III

Secretary
Department of Health
Manila City
Dear Secretary DUQUE:
In line with its vision to become an enabling partner of the government in

ensuring a better life for every Filipino, the Commission on Audit (COA)
conducts performance audits to help government agencies better perform
their mandate and achieve program goals and objectives more economically,
efficiently, and effectively.
Pursuant to Section 2 (2), Article IX-D of the 1987 Constitution which vests
COA the exclusive authority to define the scope of its audit and examination,
and establish techniques and methods required therefore, the COA
Chairperson issued Office Order No. 2016-962 dated November 9, 2016
creating audit teams to conduct performance audits on selected priority
programs/projects of the government. COA has identified the Health Facility
Enhancement Program (HFEP) of the Department of Health (DOH) as one
of the priority programs to be audited.
We were able to assess the extent to which the program has adhered to
implementing guidelines, relevant laws, rules and regulations, as well as the
attainment of program goals and objectives taking into consideration the
efficient, economical and effective provision of facilities and equipment to
intended beneficiaries. Key performance indicators for monitoring program
outputs and results as well as impact evaluation tracking and reporting were
likewise assessed.
The audit primarily covered selected transactions of HFEP at the DOH

Central Office and National Capital Region during the period 2014 to 2016.
Transactions and data pertaining to 2017 and prior to 2014 including data for
the nationwide program implementation were included in the review and
analysis, when necessary.
We reviewed applicable laws, rules, regulations and related guidelines to

HFEP implementation. We interviewed key officials to better understand the
process by which DOH plans, implements, and oversees the program. We
also looked into the documentation related to HFEP which included, among
others, procurement documents, records on distribution of equipment,
monitoring and status reports of projects and utilization of equipment,
program coverage reports, results of validation of health facilities,
assessment reports on the program, and COA audit reports. Likewise, we
conducted validation of equipment distribution at selected health facilities at
the NCR.
Page 1 PAO-2017-05
As one of the initiatives of COA performance audit, we would like to provide

inputs and recommendations based on the findings and conclusion that we
would arrive on the evaluation of the program based on sufficient,
appropriate evidence.
We conducted this audit from January 2017 to June 2017 in accordance with
the International Standards of Supreme Audit Institutions (ISSAI) 300.1 The
standard requires that we plan and perform the audit to obtain sufficient,
appropriate evidence to provide a reasonable basis for our findings and
conclusions based on our audit objectives. We believe that the evidence
obtained provides a reasonable basis for our findings and conclusions based
on our audit objectives.
_______________________________________________________
1ISSAI 300 Fundamental Principles of Performance Auditing
Page 2 PAO-2017-05
One of the major challenges in the Philippine health sector is providing

Background
access to appropriate health facilities for the poor and the marginalized
sector of the society. Recognizing this problem, one of the inaugural
commitments of the Aquino administration is ensuring that quality and
affordable care reaches each and every Filipino through the Universal Health
Care or Kalusugan Pangkalahatan (KP).2 The KP identified three strategic
thrusts, namely; financial risk protection, improved access to quality hospital
and attainment of health Millennium Development Goals (MDGs).3
The DOH is implementing “improved access to quality hospitals/health

facilities”4 through HFEP which provides funding assistance for infrastructure
and equipment of government health facilities nationwide, particularly
Barangay Health Stations (BHSs), Rural Health Units (RHUs), District
Hospitals, Provincial Hospitals and DOH Retained Hospitals and specialty
centers.
The main goal of the HFEP is to improve delivery of basic, essential and
specialized health services. The program envisions revitalization of primary
health care facilities and rationalization of the various levels of hospitals to
decongested-referral hospitals. HFEP also provides hospitals the needed
equipment to comply with minimum licensing and PhilHealth accreditation
requirements. Facilities will be upgraded to make them more responsive to
the “need” of the catchment area, to provide Basic Emergency Obstetric and
Newborn Care (BEmONC) and Comprehensive Emergency and Newborn
Care (CEmONC) services to the population, and to strengthen the health
facility referral system or network.
Specifically, the annual priorities and objectives of the HFEP from 2011 to
2016 are presented in Table 1.
Table 1: Annual Priorities and Objectives of HFEP 2011-2016*

Year Priorities Objectives
rr
2011-2012 BHS, RHU and LGU Hospitals •Aquino Health Agenda (AHA) to achieve Universal Health Care (UHC)
BHS, RHU, LGU Hospitals and

2013 Hospitals Development • Aquino Health Agenda (AHA) to achieve UHC
• Ensure the achievement of the health system goals of better health

BHS, RHU, LGU & DOH Hospitals outcomes, sustained health financing and responsive health system
Dialysis Clinics, Blood Service Facilities,
2014 ensuring that all Filipinos, have equitable access to affordable health
Psychiatric Facilities and
care
Treatment and Rehabilitation Centers
BHS, RHU and Government Hospitals
2015 DOH Facilities & grounds and
other Government Health Facilities
• Improving primary health facilities to “gatekeep” and deliver preventive
Health services
2016 BHS, RHU, Government Hospitals, • Improving quality of LGU hospitals to comply with DOH licensing and
DOH Facilities & grounds Philhealth accreditation requirements as quality referral centers
and other Government Facilities • Decongest DOH hospitals to be able to provide quality tertiary care and
specialized treatment.
*Source: HFEP briefer Presentation by DOH
_______________________________________________________
2DOH-HFEP Executive Summary
3AdministrativeOrder No. 2010-0036,Dated December 16,2010, The Aquino Health
Agenda, V. General Guidelines
4 http://www.doh.gov.ph/universal-health-care
Page 3 PAO-2017-05
The total budget allocated for the HFEP as a banner program rose steadily
from ₱1.7 billion in 2008 to ₱26.9 billion in 2016.
Figure 1: Budget Allocated to HFEP from 2008-2016
30. 26.87
22.5
in billion pesos
15. 13.5 13.3
10.8
7.14
7.5 5.08
1.66 2.07 3.26
0.
2008
2009
2010
2011
2012
2013
2014
2015
2016
Specifically for the period 2014 to 2016, the HFEP received a total budget of
₱53.7 billion, of which ₱38.5 billion was allotted to infrastructure and ₱15.2
billion to equipment.
Table 2: Allocation of Budget to Infrastructure Facilities and

Equipment in billion Pesos
Year Infrastructure Equipment Total
2014 ₱9.143 ₱4.399 ₱13.542
2015 10.419 2.853 13.272
2016 18.961 7.911 26.872
Total ₱38.523 ₱15.163 ₱53.686
Annually, the DOH issues Department Orders (DOs) prescribing the

guidelines for the availment, selection and processing of projects and
implementation under HFEP (Appendix III-For the list of Relevant DOH
Order, Circulars, and Memoranda for HFEP). For 2016, the guidelines for
the availment for HFEP from screening to approval of project proposal is
detailed in Figure 2.
Page 4 PAO-2017-05
Figure 2: Screening Process for Project Proposal under HFEP
For FY 2016, HFEP was guided by DO No. 2016-01105 and 01336 entitled,
Guidelines for the Implementation of the Health Facilities Enhancement
Program (HFEP) FY 2016, and Guidelines on the Implementation of the
Project to Establish Barangay Health Stations in Public Schools under the
HFEP dated April 04, 2016 and May 13, 2016, respectively.
The Health Facilities Development Bureau (HFDB) shall specifically oversee

the implementation and tracking of HFEP project. In line with the DO No.
2017-0050 dated March 01, 2017, the HFDB was transferred from the Office
of the Technical Services to the Office for Field Implementation
Management.
Level of program
success not
evaluated in the
light of deficient
indicators, targets
and reported
program results
depriving the
stakeholders with
the relevant
information for
decision making
The HFEP is a national program that assists in enabling the government
health facilities to provide quality health care towards Kalusugan
Pangkalahatan through the allocation of capital outlay for the procurement of
health infrastructure and medical equipment. HFEP is one of the components
_______________________________________________________
5 Guidelines for the Implementation of the health facilities enhancement program
(HFEP) FY 2016
6 Guidelines on the implementation of the Project to establish Barangay Health
station Barangay Health Stations in Public Schools
Page 5 PAO-2017-05
for the functionality of the Service Delivery Network (SDN). The program is
implemented with the following goals.
a) Improving primary health facilities (RHUs, BHS) to “gatekeep” and

deliver preventive health services and PhilHealth accreditation to
decongest the DOH hospitals;
b) Improving quality of LGU hospitals to comply with DOH licensing and

PhilHealth accreditation requirements as quality referral centers to
decongest DOH hospitals; and
c) Decongesting of DOH hospitals and other health care facilities to be able

to provide affordable quality tertiary care and specialized treatments.
The DOH issued Administrative Order No. 2010-0036 7 on December 16,

2010 to provide among others, the scope and coverage, overall goals and
objectives, general and specific guidelines, roles and responsibilities of
implementing agencies and development partners as well as the
implementation arrangements for the Aquino Health Agenda (AHA):
Achieving Universal Health Care for all Filipinos. One of the strategic thrusts
of AHA is improved access to quality hospitals and health care facilities.
The National Objectives for Health (NOH) 2011-2016,8 which embodies the
Health Agenda, also sets the health program goals, strategies, performance
indicators and targets to lead the health sector achieves Kalusugan
Pangkalahatan (KP) by 2016. DO No. 2011-01889 prescribes execution plan
and implementation arrangements for the KP.
Performance indicators are measures of project impacts, outcome, outputs

and inputs that are monitored during project implementation to assess
progress towards attainment of project objectives. They are used to evaluate
project’s success.10
Five types of indicators to measure different aspects of program performance

are generally used for monitoring and evaluation. Monitoring focuses
primarily on input, process and output indicators, while evaluation focuses
largely on outcome and impact indicators.
_______________________________________________________
7The Aquino Health Agenda: Achieving Universal Health Care for All Filipinos
8National Objective for health 2011-2016
9Kalusugan Pangkalahatan Execution Plan and Implementation Arrangements
10World Bank Performance Monitoring Indicator Handbook
http://siteresources.worldbank.org/BRAZILINPOREXTN/Resources/3817166-
1185895645304/4044168-1186409169154/24pub_br217.pdf
Page 6 PAO-2017-05
Figure 3: Definition of Indicators for Monitoring and Evaluation11
_______________________________________________________
11 https://www.urbanreproductivehealth.org/toolkits/measuring-success/indicators
Page 7 PAO-2017-05
To ensure consistency, accuracy, relevance and usefulness of data collected

for monitoring and evaluation, the indicators must have the SMART
characteristics.
a) Specific – focused and clear

b) Measurable – quantifiable and reflecting change
c) Attainable – reasonable in scope and achievable within set time-frame
d) Relevant – pertinent to the review of performance
e) Time-Bound/Track able – progress can be charted chronologically
Inquiry from the HFDB and analysis of their key performance indicators
● ● ● revealed that the indicators are mere quantitative measure of
accomplishment for monitoring and not for outcome and impact evaluation
Performance indicators
of the program. Consequently, when HFDB was further clarified on how they
not adequate to assess
measure the attainment of program goals and objectives, the Program
the attainment of
Expenditure Plan was showed which indicates, among others, the yearly
goals/outcome or level
of success of the
target with accomplishment in various stages of implementation in the
program upgrading and improvement of health facilities/hospitals (in percent), status
● ● ● of fund release and number of distributed equipment. These indicators used
to report the outputs of the program are similar to the indicators provided for
in the Annual Work and Financial Plan (WFP). From the DOH Annual
Reports, the same information were presented in addition to the number of
health facilities upgraded with the corresponding funding from 2010 to the
current year. Likewise, no review on the progress on the attainment of
program goals was reported in the Annual Reports.
Figure 4: Key Performance Indicators
Key Performance Indicators
No. of
No. of HF
health No. of HF No. of HF
infrastructure
facilities licensed by accredited by
projects
(HF) funded DOH PhilHealth
completed
per GAA
● ● ● Sec. 2 of the General Provisions in the General Appropriations Act (GAA)

provides that the targets set for the Major Final Outputs (MFOs) performance
Deficiencies in the MFO indicators of agencies, stated in terms of quantity, quality or timelines
indicators, targets and
dimensions, are considered the commitments and accountability of the
data impact on the
commitment and respective heads of agency. The results-based budgeting system being
accountability of the adopted by the government shall be based on the actual performance of
Secretary under the GAA spending units in delivering their MFOs and their impact on the sectoral and
societal objectives and priorities set by the National Government.12
● ● ●
Department Memorandum No. 2015-0368 dated 27 October 2015 on the

Guidelines for FY 2016 Work and Financial Plan was issued to set
performance targets for 2016 to adequately support the achievement of KP
goals/objectives/targets in the Philippine Development Plan (PDP), National
_______________________________________________________
12GAA General Provisions 2016
Page 8 PAO-2017-05
Objectives for Health and KP Execution Plan and Implementation

Arrangements. The Technical Cluster shall consolidate overall resource
requirements to implement KP from all sources, determine national level
targets with area, regional and provincial breakdowns, develop measures
and a collection, validation and reporting scheme for monitoring
performance, and consolidate national level performance regarding KP
targets.
Analysis of targets and indicators for HFEP in the 2016 GAA and the 4th
Quarter Physical Report of Operation (QPRO) for 2016 revealed the
following deficiencies (Appendix I for Details):
a) Description of the indicator does not clearly specify when to consider the
completion of an output resulting in different interpretation in data
collection and reporting by the regional offices;
b) Indicator not time-bound to gauge the timely provision of facilities and
equipment;
c) Target per GAA not fully supported with breakdowns at regional level;
d) Target (%) per GAA different from the average percentage of the regions
per QPRO; and
e) Definition/description provided not descriptive of the indicator.
The HFDB, which is also responsible for the MFO indicators and the Health,
Policy Development and Planning Bureau which submitted the QPRO to
DBM had neither explained the discrepancy between the targets per GAA
and the QPRO nor corrected any inconsistencies in the targets and reported
accomplishments.
DOH commented that target setting was based on the number of health
facilities for which a barangay as a recipient of BHS is considered as an LGU.
It also explained that the overall accomplishment for 2016 was 2,961 facilities
as of May 31, 2017, of which 1,092 facilities were under pre-procurement,
725 were procured, 752 were ongoing and 392 were completed. Regional
offices were also encouraged to adopt higher targets provided, such targets
do not go below the national target as provided in the GAA. It should be
noted, however, that in the description of the indicator, barangay as an LGU
was not included in target setting, which was the main reason why the total
target per QPRO did not match the target per GAA. As discussed earlier, it
was not clearly specified when to consider an output as accomplishment as
there are various stages in the procurement until a project is completed
and/or become functional. As noted, there were regions which reported only
the completed projects.
Deficiencies in the MFO performance indicators, targeting and reporting

impact on the accuracy, completeness and usefulness of information
considered as commitment and accountability of the Secretary of the DOH
on the funds provided under the GAA. The reported targets and
accomplishment would not also adequately support or reflect the
achievement of KP goals/objectives/targets in the NOH for 2011-2016.
DOH Management further commented that for year 2017 onwards, the
indicators will be revisited. Indicators and description will be reviewed and
modified to minimize and avoid inconsistencies. Management further stated
and the audit team agreed that MFO indicators must be disseminated/
cascaded to Regional offices to address the gaps between targets and
accomplishment to avoid misinterpretations.
Page 9 PAO-2017-05
The KP overall goal of improved access to quality hospitals and health

facilities by all Filipinos, especially the poor, which is directly aligned with the
goals of the HFEP, has the following strategic objectives with respective
● ● ● indicators, baseline data and 2016 targets:
Need for a more a. Access to health facilities and services, especially those commonly
comprehensive used by the poor is improved
assessment on the level of
success in program The baseline percentages by type of health facilities
implementation upgraded/rehabilitated/constructed ranged from 10 to 30 percent in 2010.
particularly on the desired The desired outcome at the end of 2016 is to upgrade/rehabilitate/construct
future state at end of 2016 95 to 100 percent of all the health facilities.
● ● ●
Figure 5: Desired improvement in access to quality health facilities and

services in 2016 from the 2010 baseline rates13
100%
90%
80%
70%
60%
50%
40%
30%
20%
10% Baseline (2010)
0%
2016 Target
b. Quality of inpatient and outpatient care is improved
Under the NOH, the DOH plans to improve the percentages of RHU/CHO
and government hospitals with PhilHealth accreditation to 80% and 95%,
respectively, in 2016 from the 2010 baseline data of 59% and 88%. The
percentage of DOH-retained hospital with Center of Quality Accreditation is
expected to rise from the 17% baseline figure to 100% in 2016 and similarly,
for the number of provinces and large cities with at least one LGU-managed
hospitals with Center of Quality Accreditation from 10% to 70%.
_______________________________________________________
13 National Objectives for 2011-2016
Page 10 PAO-2017-05
Figure 6: Desired improvement in quality from inpatient and outpatient care in 2016 from 2010
baseline rates14
Baseline 2016 Target
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
% DOH-retained Number of provinces % RHU/CHO with % Government
hospitals with Center and large cities with PhilHealth hospitals with
of Quality or at least one LGU- Accreditation PhilHealth
Excellence managed hospital Accreditation
Accreditation status with Center of
or equivalent Quality Accreditation
c. Client responsiveness of health facilities is improved
The percentage of client satisfaction through special survey is expected to

increase to 90% at the end of 2016 from the baseline rate of 83.2% in 2010.
According to the KP execution plan and implementation arrangements, the

DOH has to upgrade a total of 2,552 government health facilities nationwide
with the cost of ₱92.6 billion in order to close the upgrading gap in 2016. The
implementation shall be undertaken in three phases: Launch Phase (2011),
Scale-up Phase (2012-2013) and Sustainability Phase (2014-2016).
Comparison of the number of health facilities to be upgraded/constructed per

KP implementation plan and the GAA for 2014 to 2016 revealed significant
deviation from plan.
_______________________________________________________
14Supra 15
Page 11 PAO-2017-05
Figure 7: Comparison of facilities per NOH/KP and Per GAA, CYs 2014
to 2016
9000 8233
8000
7000
6000
5000 Per NOH/KP
4000 2917 2379 2937 Per GAA
3000
2000 229
1000 0 235
6
0
2014 2015 2016 Total
The significant increase in the number of facilities upgraded undoubtedly

brings improved access to health facilities and services from which the
success or attainment of the desired goals of the program should have been
assessed at the end of 2016 in line with the NOH/KP. No revised targets,
however, were set as goals or desired future state of HFEP for 2016.
Management explained that instead of using NOH as basis, HFEP targets

were more aligned in the GAA and Cabinet Assistance System under the
Office of the Cabinet Secretary. Plans were revised based on the funds made
available during the period and such revised plans are not anymore
consistent with the NOH. However, it should be pointed out that the targets
per NOH are the desired state at end of 2016 and not the annual targets.
The Philippine Health Facility Development Plan for 2017-2022 has identified
the gaps for the upgrading of all types of health facilities. For Barangay
Health Stations, a gap of 15,988 was established from the ideal ratio of one
BHS per barangay and 2,424 of RHUs for a population ratio of 1:20,000.
These gaps resulted from the implementation of the previous NOH but could
not be said as the residual gaps at the end of 2016 from a successful and
effective implementation of the program.
The indicators used in the NOH for 2011-2016/KP provided baseline values
and desired results at end of 2016. The indicators, however, pertain mostly
to the provision of facilities through infrastructure projects and appeared to
have not factored in the equipment provided which are in line with
accreditation and licensing of the health centers and hospitals as focused by
the program. The MFO indicators can be used to measure the level of
success of the program but need enhancement to meet the good
characteristics of indicators such as SMART as discussed earlier.
While impact evaluation studies were conducted by the Philippine Institute

for Development Studies (PIDS) though commissioned by DBM, the DOH
has yet to conduct a continuous and more comprehensive impact evaluation.
The Kalusugan Pangkalahatan 2010-2016: An Assessment Report by

DOH15 presented the number of health facilities funded by the HFEP for the
_______________________________________________________
15 The Kalusugan Pangkalahatan 2010-2016: An Assessment Report
Page 12 PAO-2017-05
period without assessment whether the desired improvement in the access

to quality hospitals and health care facilities has been attained. Nonetheless,
challenges for the HFEP were pointed out which include monitoring, delays
in completion of infrastructure projects and overlaps in the provision of
equipment.
Management commented that the outcome indicator for accessibility and

quality of service is the increase in PhilHealth accredited and licensed
facilities such as:
a. Increased PhilHealth-accredited RHUs for Primary Care Benefit (PCB):

December 2014-28% of RHU; December 2016-96.8% of RHUs.
b. Increased number of beds of government hospitals licensed in 2016:

increase of 5% or 1,678 from 2015 to 2016.
c. Increased number of government hospitals with license in 2016:

increase of 3% or 13 hospitals from 2015 to 2016.
Management also reasoned out that impact of HFEP is difficult to measure

as there are many social determinants of health. As health sector is
devolved, the LGUs are the primary implementers of health programs in their
jurisdictions and HFEP can only give support to ensure access to quality
health providing facilities and equipment. Furthermore, among the goals of
the HFEP is to reduce out of pocket (OOP) expenditures, which account for
60 to 70%, by increasing access of Filipinos to quality government facilities
through Universal Health Coverage. The increasing services made available
in government hospitals have actually reduced the OOPs.
It is acknowledged that there are outcomes which are difficult to measure

and evaluate and could not be solely attributed to HFEP. The indicators cited
by Management could be considered valid indicators but the actual increases
could not be taken as the desired increases at end of 2016. For the reduction
in the OOPs, no actual data were presented.
Page 13 PAO-2017-05
Equipping of health
facilities affected
by procurement
not based on
identified needs,
delays in
procurement and
distribution and
acceptance of
inferior and poor
quality equipment
Sec. 7 of RA 918416 provides that all procurement should be meticulously
and judiciously planned by the procuring entity. Consistent with government
fiscal discipline measures, only those crucial to the efficient discharge of
government functions shall be included in the Annual Procurement Plan
(APP). No procurement shall be undertaken unless it is in accordance with
the approved APP of the procuring entity. The end-user units shall prepare
their respective Project Procurement Management Plan (PPMP) for their
different programs, activities and projects which shall include, among others,
mode of procurement, time schedule for each procurement activity and for
the contract implementation. The PPMPs then are consolidated in the APP.
In view of the quantity of items to be procured and the current workload of

the DOH Central Office thru the Central Office Bids and Awards Committee
(COBAC), other DOH procuring entities, namely: Regional Offices thru the
Regional Bids and Awards Committee (RBAC), DOH hospitals thru the
Hospital Bids and Awards Committees (HBAC) and DPWH for projects were
designated to assist in the conduct of procurement. The HFDB prepares the
PPMP including the recipient list.
The HFDB prepares list of equipment and infrastructure projects for HFEP to
be approved by the Secretary of Health. The approved Regional Allocation
for 2014 to HFEP was submitted during the audit but the detailed lists of
allocations for 2014-2016 were presented to the Audit Team after the review
of the draft performance audit report.
● ● ●
Procurement not based on Clarification on the basis of preparation of list of equipment to be procured
need resulting in revealed that requests are received from hospitals while equipment for BHS
idle/unused equipment or and RHUs are identified by package to fast track compliance with PhilHealth
use for different purpose, requirements. Validation and monitoring reports of readiness and needs of
and reallocation of health facilities are required from the Regional Offices.
equipment from intended
health center- Manifestation of procurement which was not totally based on actual needs of
beneficiaries to other the recipients was, however, evident when DOH issued DO No. 2014-0072-
health centers B 17 dated 1 July 2015 to amend the guidelines on the implementation of
HFEP for FY 2014. The amendment was triggered by the observation that
● ● ●
centralized procurement of equipment for “big ticket” items did not meet
expected results. This is due to several bid failures causing extended time of
procurement and delay in delivery and installation of the needed equipment
to the disadvantage of the health facilities nationwide. It was pointed out that
_______________________________________________________
16RA of 9184 otherwise known as Government Procurement Reform Act.
17Revised Guidelines on the Implementation of the Health Facilities Enhancement
Program for CY 2014 as amendment to DO No.2014-0072
Page 14 PAO-2017-05
a number of equipment delivered were not suited to the actual needs of the
intended facilities.
Likewise, results of field validations and monitoring visits to health facilities

revealed idle/unused equipment which could be attributed to procurements
which were not based on needs of recipient facilities or inadequate
procurement planning. The COA reported in its 2015 Consolidated Annual
Audit Report (CAAR) for DOH idle/unused equipment from facilities not yet
ready/operational (₱79.56 million), with oversupply/over distribution and non-
distribution to intended users (₱19.48 million), no actual use/no patient in
need of the equipment (₱7.7 million), and lack of manpower or trained
personnel to operate equipment (₱4.56 million).
DOH Internal Audit reported similar deficiencies amounting to ₱213.2 million

while HFDB in its validations in response to the COA findings and
recommendations resulted in additional deficiencies or unused equipment
(₱19.9 million).
The audit team validated the existence of unused/idle equipment in the

amount ₱78,974,500.39 for similar reasons from 21 NCR health facilities
validated in April and May 2017. Likewise, high-value equipment such as
blood bank refrigerator and plasma freezer, costing ₱400,000 and ₱220,000,
respectively, were noted to be used as refrigerator for medicine and reagents
in three facilities visited by the team.
Figure 8: Vaccine Refrigerator procured in 2015 remained unutilized at

Kalawaan Health Center, Pasig due to problem in power/electricity
requirement
Page 15 PAO-2017-05
Figure 9: Autoclave, 50 Liters procured in 2014 remained unutilized at

San Jose Health Center, Pasig due to existing similar equipment
Figure 10: Weighing Scale units procured in 2014 remained unutilized

at Las Piñas Lying- in Center
Figure 11: MRI procured in 2016 uninstalled at Jose Reyes Memorial

Medical Center
Page 16 PAO-2017-05
Figure 12: Plasma Freezer procured in 2014 used for medicine and
reagents at Sta. Ana Hospital, Manila
Figure 13: Blood Bank refrigerator procured in 2014 used as medicine

cabinet at Santa Ana Hospital, Manila
Another manifestation of procurement not based on need is the reallocation

of equipment from intended beneficiaries to other health facilities. Equipment
amounting to at least ₱170 million were reallocated in view of the refusal of
intended beneficiaries to accept the equipment due to existing units, no
available space, and facility under construction or not ready and non-existent
health centers:
a. 24 units of Mobile Dental Vehicles (₱94,800,000)

b. 18 units Autoclave 50 L (₱2,577,984)
c. 2 units Autoclave 150 L (₱496,220).
d. 2 units 500mA Radiographic Fluoroscopic X-ray Machine
(₱19,840,000)
e. 1 unit X-ray machine 300mA (₱1,790,000)
f. 1 unit Micro-Hematocrit Centrifuge valued at (₱54,000)
g. 3 units CT Scan 16 Slice (₱50,985,000).
Management cited several factors relating to unused/idle equipment and

reallocation:
a. Facility under construction/not ready – infrastructure and equipping of

the facility are funded for in the same year wherein the equipment have
been procured but the space/facility allotted for the equipment is not yet
finished.
Page 17 PAO-2017-05
b. Submission of the request for funding on the same list of equipment to

different funding agencies aside from DOH resulting in duplication of
equipment when both requests were approved.
c. Equipment as their back-up especially for common equipment which are

frequently used (e.g. stethoscope, BP apparatus, etc.) and request for
replacement takes time if it will be procured by LGU.
d. Equipment procured are the minimum requirement for the accreditation

of BHS and RHUs.
Management also added that corrective actions have been implemented in

2015 wherein all requests must be accompanied by letter request and must
be evaluated and validated by the Regional Offices. Infrastructure projects
will be funded for the year then funding for equipment for that infrastructure
will be given the following year.
Had the need for these equipment been properly identified in the
procurement planning, equipment would be allocated to health facilities
which are really in need and ready for the upgrading in accordance with the
focus of the program. This way, reallocation which causes delay in the
provision and use of equipment by health facilities and hospitals would be
minimized if not eliminated.
DOH NCR pointed out that their procurement of equipment was based on
gaps determined through health facility validation. Equipment from DOH
Central procurement was re-allocated, if needed, using their gap analysis.
The unused equipment at health facilities impact on the economical and

efficient utilization of resources of the program. These equipment may further
depreciate and may be put to waste if not put in service immediately.
● ● ● Sec. 20 of the General Provisions of the GAA dictates the early conduct of
procurement activities to ensure full budget utilization, timely contract
Need for earlier implementation and efficient delivery of services. It further provides that
initiation of agencies are authorized to undertake procurement activities from pre-
procurement activities procurement conference to post qualification of bids based on their proposed
for the current year budget in the National Expenditure Program/General Appropriations Bill, in
funding accordance with the guidelines issued by the GPPB and/or DBM.
● ● ●
Based on the annual guidelines on the implementation of the HFEP, the
procuring entities are also advised to conduct the procurement process at
the earliest possible time and in accordance with the 2016 Revised
Implementing Rules and Regulations (IRR) of RA 9184.18 It also provides that
the earliest possible time to complete procurement actions from the
advertisement/posting of Invitation to Bid to issuance of Notice to Proceed
(NTP) is 26 calendar day and the latest allowable time is 141 or 156 calendar
days. These timelines must be considered by the procuring entity in the
conduct and provision of procured goods, equipment and services.
Late initiation of procurement activities was noted in the procurement for

HFEP in 2014. PPMP to be sourced from GAA 2014 involving the
procurement of equipment worth ₱1,470,470,000 was prepared only on
August 12, 2014. Two PPMPs involving equipment amounting to
_______________________________________________________
18
The 2016 Revised Implementing Rules and Regulations of RA 9184 otherwise
known as Government Procurement Reform Act
Page 18 PAO-2017-05
₱167,940,000 were prepared on July 11, 2014. Thus, the procurement

activities such as Pre-procurement conference started only in the 3rd week
of September 2014 with the issuance of NTP in the 3rd week of December
2014 for procurement amounting to ₱335,089,000 per Updated APP for 2014
(under 3rd Supplemental APP). In addition, negotiated procurement
amounting to ₱1,221,401,200 was scheduled in December 2014.
Likewise, updated APP for 2015 included negotiated procurement of

equipment valued ₱3,524,094,550 from 2014 Continuing Appropriation
(CONAP) and ₱804,700,000 from GAA 2015 in the 4th week of December
2015.
Management claimed that the PPMPs in July and August 2014 were the
revised ones with the original PPMP could not be found. Several factors
contributed to the late initiation of procurement activities, such as: a) delayed
Special Allotment and Release Order (SARO); b) election ban; c) glitches in
the DBM computerized system leading to erroneous release of HFEP funds;
and d) Regional Offices and other procuring entities do not want to proceed
with the procurement process without SARO.
Management further commented that the SARO for the ₱3.52 billion was
received by DOH on December 29, 2015. As there was no sufficient time to
conduct public bidding, negotiated procurement (agency to agency
procurement) was used to ensure the procurement of the items included in
the updated 2015 APP.
Review of details of the ₱3.52 billion procurement revealed that equipment

with total value of ₱1.65 billion was procured through the Philippine
International Trading Corporation (PITC). As of October 30, 2017, however,
these equipment totaling ₱1.14 billion were still on varying procurement
stages.
● ● ●
For 2016, procurement amounting to ₱2.4 billion per APP was scheduled in
Delayed contracting, the 1st Quarter of 2016. Corresponding NTPs on 10 POs with aggregate
delivery and distribution value of ₱1,849,969,077.00 were issued/received by the suppliers from May
of equipment to December 2016 or up to eight months behind the planned schedule for
2016 procurement. (Appendix II for details)
● ● ●
For Region VIII, 4th QPRO for 2016 indicated that HFEP procurement on
current year was still on process at end of 2016.
Analysis of deliveries from 31 POs amounting to ₱177,676,195 from Central

Office disclosed delays in the deliveries by suppliers by up to 255 days in at
least 14 POs. Similarly, delays in the deliveries by the suppliers of NCR
Regional Office were noted. Management commented that they will impose
penalties to supplier with delayed deliveries subject to RA 9184 and a
memorandum will be issued to follow up the status of delivery.
In view of late procurement and delayed delivery, equipment were not

distributed in a timely manner to the recipient health facilities. Procured
equipment funded by GAA 2014, were distributed until 2016 while
equipment funded by GAA 2015 were not yet fully delivered as of June 2017
particularly those equipment purchased through the PITC.
Items which remained undistributed to intended health facilities deprived the

facilities in need of the equipment for the upgrading of their facilities and
services. Undistributed/Unused items to intended health facilities amounted
Page 19 PAO-2017-05
to ₱90,662,486 per 2015 CAAR and ₱1,557,250 per audit team’s validations
of distribution of binocular microscopes and infant weighing scales at four
CHOs in NCR.
Figure 14: Sample Photo of Olympus Binocular Microscope
Figure 15: Binocular Microscope units procured in 2015 remained

undistributed at Las Piñas City Health Office

undistributed at Caloocan City Health Office
Page 20 PAO-2017-05

undistributed for Navotas Health Office stored at Bagumbayan North
Health Center
Late initiation of procurement activities for the current year funding, and
delayed contracting, delivery and distribution of equipment impact on the
timely provision of necessary equipment for the upgrading and improvement
of health facilities.
The required specifications for the items to be procured are provided in the
bid documents and Purchase Orders issued by the procuring entity to which
the supplier agreed.
DOH DO No. 2012-0065 dated May 3, 2012 provides guidelines for the
delivery, receipt, inspection, acceptance, training, storage, issuance and
payment of various equipment procured under HFEP. The receipt of
deliveries shall be undertaken by DOH MMD, RO’s Director/Supply Officer
or the LGU General Service Office and shall coordinate the conduct of
inspection and pick-up of delivered goods by the recipient health facilities.
The authorized inspectors shall look into the compliance of the delivered
goods with the specifications and requirements stated in the
PO/Contract/Supplier’s Invoice/Delivery Receipt and shall prepare the report
immediately after the conduct of inspection. All goods inspected, tested and
found in compliance with specifications and requirements shall be accepted.
The concerned offices/End-users shall have the right to reject acceptance of
items that do not comply with the specifications or due to defective materials
or craftsmanship.
Verification of sample Disbursement Vouchers (DVs) revealed that

Inspection and Acceptance Report (IAR) is one of the supporting documents
of the DV for the payment of goods/equipment.
● ● ●
Reported in the 2015 CAAR are equipment which were defective upon
Defective and inferior
quality of equipment
delivery or after using them for less than a year in the amount of
distributed to health ₱51,576,337. In the 2016 Management Letter (ML) of COA for DOH TSEKAP
facilities Packages, items delivered to Region 2 and 13 were found
unutilized/defective/having specifications not in accordance with the PO per
● ● ● Logistics Management Division (LMD) monitoring report and unrecorded in
the books of recipient facilities.
The controls in the conduct of inspection and acceptance of equipment need

to be strengthened to prevent/minimize the receipt and acceptance of
Page 21 PAO-2017-05
defective items/inferior quality by the recipient health facilities. Likewise,

equipment with defects noted during the warranty period could have been
monitored and reported for repair or replacement to ensure the continuous
availability of the equipment in the health facilities.
If no corrective actions are taken on these equipment which were defective,

not in accordance with specifications or of inferior quality, the investment put
by HFEP to upgrade the health facilities would be put to waste. These
defective equipment will not contribute to the attainment of the objectives of
HFEP.
Management responded to the reports on defective equipment in the regional

offices by sending letters to concerned suppliers requesting for the repair
and/or replacement of defective items. It was added that payments were
withheld to suppliers until corrective actions were completed. Management
also planned to conduct re-orientation on procedures for inspection and
acceptance of equipment.
It should be noted that based on the letter of HFDB to the supplier of TseKap
Equipment Package, defective items were found not only in the deliveries
to Regions II and XIII but also to Regions I, IV-A, VII, VIII and IX indicating
the prevalence of inferior quality and defective items distributed and
accepted by the recipients.
Need to improve
compliance with
guidelines on
selection of
projects and
improve timeliness
of implementation
and completion of
project for a more
efficient and
effective provision
of health services
in health facilities
The annual guidelines issued by the DOH on the availment of projects by
the LGUs and health partners requires the validation of project proposal by
the Regional Office before submitting it to the Central Office for review and
alignment with the priority programs and possible inclusion in the list of
projects to be funded under HFEP. All project proposals should be reviewed
and validated on-site taking into consideration the existing infrastructure
conditions, hazard maps, lot ownership and availability of land, required
basic infrastructure in the locality such as road access and water source,
● ● ● among others.
Infrastructure projects Review of the status of implementation of the 2016 projects of NCR-RO as
selected for at January 15, 2017 revealed that of the 71 projects not yet started, 10 were
implementation not for realignment to other projects while nine have problems on project sites.
compliant with These issues on project implementation pointed out possible lapses on the
guidelines screening and validation of project proposals in accordance with the
guidelines.
● ● ●
Page 22 PAO-2017-05
It was also noted from the 4th QPRO for 2016 that five out of 45 projects for
Region IV-A were not implemented due to unavailable lots. In Region V, it
was reported that some sites were affected by the road widening of DPWH.
Region III also reported lack of documentary requirements on proof of
ownership of lot for project site.
These issues relating to the availability of sites, realignment and modification

on the project impact on the timely implementation and completion of health
facilities for the upgrading of health services.
Management commented that one of the factors that contributed to non-

compliance with the guidelines is political interventions and requests. Some
projects were requested by the legislators with the assurance of the LGU
counterpart as to lot ownership. However, during validation, the sites are not
suitable due to limited lot area, exposed to hazard (flood) and affected by
road widening that resulted to realignment/modification of project. Also, there
were commitments from requesting political leaders that lots shall be made
available in time.
It should be noted that had the validation been done as part of the screening
of the project proposal before it is approved and funded, delay and other
issues affecting project implementation could be avoided.
As cited earlier on the relevant provisions of the GAA, RA 9184 and its IRR
and the annual guidelines on the implementation of HFEP, the procuring
entities are advised to conduct procurement process at the earliest possible
time.
DBM-DOH-DPWH Joint Circular No. 1 provides guidelines on the

implementation of HFEP projects to be implemented by DPWH. The Circular
defines the roles and responsibilities of the agencies concerned during the
program implementation and completion. The DOH has also prescribed
standard plan and specifications for RHUs and BHS and has estimated the
period to complete the construction of BHS at 120 days.
The DPWH implemented 2,465 projects with aggregate value of ₱9 billion

from the appropriations for FYs 2014 to 2016 of which 1,205 projects with
total value of at least ₱4.6 billion were completed as of January 31, 2017.
Projects funded in 2014 were 96% completed after three years of
implementation while projects funded in 2015 were only 62% completed.
Table 3: Status of Projects Implemented from 2014-2016
Year Programmed Completed as of 31 January 2017 Percent

No. of Amount No. of Projects Amount Completed to
Projects Total No. of
Projects
2014 611 ₱2,701,143,200 588 ₱3,282,955,900 96%
2015 934 3,234,599,200 579 1,726,148,300 62%
2016 920 3,064,001,800 38 - 4%
Total 2,465 ₱8,999,744,200 1,205 ₱5,009,104,200
Page 23 PAO-2017-05
● ● ● Analysis of the status of projects implemented by DPWH as of 31 January

2017 revealed the following:
Delayed implementation
and completion of
infrastructure projects
a. Some funded-projects in a given year would require three years to
implement and complete;
● ● ●
b. Percentages of projects completed in the same period they were
funded revealed 33% completion in 2014, 0% in 2015 and 4% in 2016;
the low percentages in 2015 and 2016 could be offset by the higher
percentages of completion of projects from previous years, i.e., 57%
completion in 2015 for projects funded in 2014 and 58% in 2016 for
projects funded in 2014; and
c. Total of 722 projects were not yet started (1 from 2014; 80 from 2015;
and 641 from 2016).
Further analysis revealed that projects were not efficiently implemented as

only 249 out of 585 projects or 43% were completed as planned for 2014
funded projects and 284 out of 579 completed projects or 49% for 2015. The
projects completed per revised schedule totaled 242 or 41% and 154 or 27%
for 2014 and 2015, respectively.
Delayed completion of projects (after the revised completion schedule)

reached 113 in 2014 funded projects (65 within 3 months; 27 within three to
six months; 21 within six months to more than 1 year delayed) and 244
projects from 2015 (214 within three months; 28 three to six months; 2 within
six to twelve months).
Management commented that HFEP is considered as special project of

DPWH and while waiting for release of SARO for the DOH projects, DPWH
implemented first their own projects. SARO were released by DBM on June
27, 2014 for 2014 HFEP funded projects; November 11, 2015 for 2015
projects; and June 13, 2016 for 2016 projects. Also, HFDB trained the DPWH
technical staff in the planning and design of health facilities. Since it is the
joint responsibility of DOH and DPWH to request to the DBM the release of
SARO, timely release of SARO may depend on the joint request.
The Regional Offices also implement repairs and rehabilitation and

upgrading of health facilities and may enter into agreement with concerned
LGUs and DPWH Engineering Districts. The NCR-RO implemented 155
projects for 2014 and 2016. Analysis of status of projects as of 28 February
2017 revealed that 17 out of 137 projects or 12% were not yet started from
the 2014 funded projects. From 2016 funded projects, 11 or 61% were not
yet started in 2017.
Similar and related deficiencies were reported by COA in its CAAR for 2015
where ₱1.78B projects funded from CYs 2010-2015 were either not
completed within the specified contract time (₱904.4 million) or started
(₱190.6 million), already completed as to scope of works of the contracts but
not yet utilized nor fully operational (₱488.8 million), or with defects or
deficiencies that the contractors need to rectify (₱49.1 million) and other
deficiencies (₱142.9 million).
Page 24 PAO-2017-05
The causes of delays in the implementation and completion of projects from

the available status reports, include the following:
a. Suspension due to absence of LGU permit;

b. No available site /transfer to other site (no title);
c. For coordination with LGU regarding new location;
d. Project modification; and
e. Awaiting approval of MOA by the Sanggunian/Mayor.
Management further commented that under DO No. 2016-004519 for 2017

HFEP Implementation Guidelines, the DOH Regional Offices are given
authority to implement LGU infrastructure project by either the LGU, DPWH
or by the Regional Office. In addition, DO No. 2017-0111 dated March 28,
2017 on the implementation of 2018 HFEP explicitly cites conditions to
prevent delays in the implementation and completion of projects.
It should be noted that except for construction of facilities, DOH Regional

Offices have been implementing rehabilitation and repair of health facilities
even before 2017. In fact, for 2014 and 2016 repair and rehabilitation projects
undertaken by the NCR-RO, various issues affecting the timely completion
of projects were noted. The latest guidelines included the requirements on
the hospital development plan, site development plan and certification that
appropriate health and technical personnel are available for the proposed
infrastructure project.
Delayed completion of projects also impacts on the utilization of distributed

HFEP equipment as noted in another observation where idle/unused
equipment was due to facilities which were not yet
available/completed/functional. Eventually, the timely provision of upgraded
facilities for the licensing classification and PhilHealth accreditation of health
facilities will be adversely affected.
_______________________________________________________
19Guidelines
for the Preparation and Selection of Projects for Health Facility
Enhancement Program or HFEP FY 2017
Page 25 PAO-2017-05
Project establishing
BHS in public
elementary schools
not effectively and
efficiently
undertaken
compromising the
completion of 5,700
BHS
A Technical Working Group (TWG) for the implementation of the school-
based health station project of HFEP was created by the Secretary on
January 22, 2016 under Department Personnel Order (DPO) No. 2016-0209.
The TWG shall report to the HFEP Management Office (MO) with the
following functions:
a. Recommend measures to HFEP MO that will ensure the speedy

implementation of the project;
b. Monitor the implementation of the project;
c. Report to the HFEP MO issues affecting its implementation.
A tripartite Memorandum of Agreement (MOA) was signed on January 26,

2016 by DOH, DepEd and DILG wherein the Parties agree to cooperate with
their defined roles and responsibilities to implement the project establishing
BHS in public schools in barangays without existing BHS to address the gaps
in both the BHS and school clinics.
The MOA provided that DOH in coordination with DepEd had initially
identified in their data that 40% of the reviewed elementary schools do not
have BHS in the barangay. It was stated that the existing BHS is only 17,904
out of the 42,029 barangays in the country. The DOH had committed in 2015
to construct 3,200 BHS in barangay with public elementary schools without
existing BHS. The DOH would be expanding the program in CY 2016
● ● ● onwards to target an average of 3,000 BHS in a year.
Implementation of DOH DO No. 2016-013320 dated May 13, 2016 was issued to prescribe the
project started ahead guidelines on the implementation of the project to establish BHS in
of the guidelines strategically selected public schools through HFEP. The general guidelines
impacting on the include among others, that DOH shall be the lead agency in implementing
selection of the the establishment of PhilHealth TSeKap-accredited BHS in public schools
intended beneficiary
and that it shall support the construction of BHS in barangays with public
schools as project
schools but without BHS or other primary health facility or hospital.
sites
● ● ● The specific guidelines under the said DO provided that the project shall be
implemented and managed in accordance with the tripartite MOA. The
guidelines also included the engagement process, monitoring, inspection
and reporting, completion and acceptance of projects, and progress
payments. On the list of final school sites per province and municipality/city
that will be submitted to the HFEP Management Office/HFDB, the DOH
engineers at the Regional Offices and other representatives should
_______________________________________________________
20 Guidelines on the Implementation of the Project to Establish Barangay Health
Stations in Public Schools under the Health Facilities Enhancement Program
Page 26 PAO-2017-05
coordinate with the DepEd officials to agree on the final school sites for the
construction of the BHS.
From the 2015 budget, DOH entered into a contract on January 22, 2016 for
the construction of 3,200 school-based BHS (Phase 1) in the amount of
₱4.46 billion to be completed within 240 days or on or before September 18,
2016. Another contract was entered into by DOH on March 23, 2016 for the
construction of 2,500 BHS in schools (Phase 2) in the amount of ₱3.67 billion
to be completed on November 17, 2016. The completion dates of the two
contracts were extended due to time extension of 90 days for site validation
under Phase 1 and suspension of work for 11 months under Phase 2. Details
of the implementation of the project for the construction of a total of 5,700
BHS are presented in Table 4.
Table 4: Details of Implementation of 5,700 School-Based BHS
Details 2015 Funding 2016 Funding Remarks

(Phase 1) (Phase 2)
No. of BHS 3,200 2,500
Invitation to Bid CW-2015-001 CW-2016-001
No.
Notice of Award 12/29/2015 03/22/2016
Contract Amount ₱4,456,592,239.41 ₱3,674,888,888.88
Date of Contract 01/22/2016 3/23/2016

Contract period 240 days 240 days
Notice to 01/22/2016 03/23/2016
Proceed/ Start
Date
Revised Start 03/02/2016 Revision of start
Date date due to late
release of
Memorandum to
Regional Directors
and Principals by
the Secretary,
DepEd.
Planned/Original 09/18/2016 11/17/2016
Completion Date
Revised 10/28/2016
Completion Date
Revised Target 01/26/2017 Time extension of
Completion Date 90 Calendar days
due to Time due to site
extension validation by DOH
and DepEd
resulting in revised
completion date
Resumption 04/19/2017 Resumption of
Order Work due to
suspension on
May 31,2016;
Management
claimed that work
for Phase 2 is still
suspended but no
copy of
suspension Order
was provided.
Page 27 PAO-2017-05
Review of available monitoring and status of project implementation reports

revealed that the original lists of project sites for the construction of school-
based BHS in both Phases 1 and 2 included barangays with existing BHS
or schools near existing BHS or hospital as the sites. The reports likewise
included school sites with no available space/lot for the construction of
BHS, recommended sites other than the schools originally listed as project
sites, refusal of construction of BHS by the Principals in the identified
school sites, same barangay as site of DPWH BHS project in 2015, sites
with no existing schools, proposals of alternative sites outside the school
premises, and sites put on hold by the Superintendent. These conditions
pointed to inadequacy in sites selection due to lack of validation before
contracting the construction of BHS in January and March 2016.The
guidelines which was issued in May 2016 provided that sites have to be
validated by DOH and agreed by both DOH and DepEd officials, in line with
the advocate of the project.
Table 5: Analysis of Project Sites for School-Based BHS
Other sites
No. of BHS to With existing No space/lot
recommended
be BHS in the for the BHS
w/o specified
Region implemented barangay or (percent to Remarks
reasons
in public near HFs total
(percent to
schools (percent to total allocation)
total allocation)
allocation)
Region III Phase 391 75 (19%) 60 (15%) 14 (4%) At least 149

1 schools or 38% in
the original list were
replaced or had to
be replaced; No
existing school for
two sites; 52
projects put on hold
by Superintendent;
and two projects
refused by School
Principal.
Phase 348 72 (21%) 57 (16%) 16 (5%) At least 145

2 schools or 41% in
the original list were
replaced or had to
be replaced; 79
projects put on hold
by Superintendent;
and 1 project
refused by the
School Principal.
Region IV- Phase 359 21 (6%) 40 (11%) At least 11% in the

A 1 original list or
allocation had been
replaced without
specifying whether
there are existing
Page 28 PAO-2017-05
Other sites
No. of BHS to With existing No space/lot
recommended
be BHS in the for the BHS
w/o specified
Region implemented barangay or (percent to Remarks
reasons
in public near HFs total
(percent to
schools (percent to total allocation)
total allocation)
allocation)
health facilities in
the barangay.
Phase 310 12 (4%) 40 (13%) At least 13% in the

2 original list or
allocation had been
replaced without
specifying whether
there are existing
health facilities in
the barangay.
CARAGA Phase 110 62 (56%) 1 (1%) More than 56% of

1 the sites in the
allocation have
Phase 35 28 (80%) 1 (3%) existing BHS or
near health facilities
2
in both Phases 1
and 2.
As a result, construction of BHS had to be transferred to other school sites

during contract implementation to comply with the guidelines while
validations of other project sites are still ongoing in 2017. It was noted that a
number of replacement sites are even located outside the school premises
and thus not consistent with intent of the project. Management claimed that
these projects are not yet implemented and was included in the list of
unworkable sites.
● ● ● Management commented that guidelines for site selection and guidelines for
implementation of the projects are not necessarily dependent on each other.
Low project completion It was pointed out that guidelines for site selection and related activities are
and possible non- found in the tripartite MOA by DOH, DepEd and DILG and that project
completion of 5,700 BHS implementation commences after procurement which is governed by RA
9184. It was added that guidelines for implementation is necessary once the
● ● ● NTP is issued and construction has started.
The Audit team does not totally agree with the comment that guidelines for
site selection and implementation of the project are not necessarily
dependent on each other. The guidelines on the implementation of the
project itself provided that the project shall be implemented and managed in
accordance with the tripartite MOA. The MOA was claimed by Management
as the guidelines for the site selection. Unlike the guideline for the
implementation, the MOA did not indicate that DOH and DepEd officials at
the regions should agree on the final sites for construction of BHS. As such,
validation and selection of project site was being conducted to replace non
workable sites during the implementation stage or contract implementation.
The number of BHS for construction should have been supported with the
list of eligible project sites before procurement and contract implementation.
Page 29 PAO-2017-05
Consequently, implementation of the projects had been delayed with only

781 completed units or 24% and 1,024 ongoing or 32% for Phase 1 as of
June 28, 2017 or 283 days past the original completion date. It was noted
that 673 units or 21% were not yet started while 722 sites or 23% were put
on hold due to unworkable condition and pending validation of sites.
Table 6: Status of Project Implementation of 3,200 School-Based BHS

under Phase 1 as of June 28, 2017
Breakdown of Accomplishment of BHS Per Region-Phase 1

as of June 28,2017
No. of BHS to
be % not
Not yet %
Region implemented Ongoing On Hold Completed yet %Ongoing % on hold
started completed
in public started
schools
NCR 51 0 0 38 13 0% 0% 75% 25%
Region I(Ilocos
167 14 70 7 76 8% 42% 4% 46%
Region)
CAR 129 55 60 3 11 43% 47% 2% 9%
Region II (Cagayan
119 0 34 22 63 0% 29% 18% 53%
Valley)
Region III(Central
Figure 18: Status of Phase 1 Project 391 50 69 109 163 13% 18% 28% 42%
Luzon)
as of 28 June 2017 Region IV-
359 36 82 24 217 10% 23% 7% 60%
(Calabarzon)
Region IV-
119 34 48 16 21 29% 40% 13% 18%
(Mimaropa)
Region V(Bicol
298 24 70 121 83 8% 23% 41% 28%
Region)
Region VI(Western
276 96 114 51 15 35% 41% 18% 5%
Visayas)
Region VII (Central
190 24 9 157 0 13% 5% 83% 0%
Visayas)
Region VIII (Eastern
190 55 94 24 17 29% 49% 13% 9%
Visayas)
Region XVIII
135 32 60 38 5 24% 44% 28% 4%
(Negros Island)
Region IX
(Zamboanga 129 12 54 23 40 9% 42% 18% 31%
Peninsula)
Region X (Northern
182 56 97 9 20 31% 53% 5% 11%
mindanao)
Region XI (Davao
109 13 52 44 0 12% 48% 40% 0%
Region)
Region XII
120 40 65 15 0 33% 54% 13% 0%
(Soccsksargen)
Region XIII
110 66 7 0 37 60% 6% 0% 34%
(Caraga)
ARMM 105 66 39 0 0 63% 37% 0% 0%
Erroneously Listed
21 0 0 21 0 0% 0% 100% 0%
Sites
Total 3200 673 1024 722 781 21% 32% 23% 24%
Similarly for Phase 2, only 41 units or 2% was reported completed, 926 or

37% ongoing as of June 28, 2017 or 223 days after the original completion
date. There were 828 units or 33% which were not yet started while 705 sites
or 28% were on hold due to unworkable conditions and further site
validations.
Page 30 PAO-2017-05
Table 7: Status of Project Implementation of 2,500 School-Based BHS

under Phase 2 as of June 28, 2017
Breakdown of Accomplishment of BHS Per Region-Phase 2

as of June 28,2017
No. of BHS to
be % not
Not yet %
Region implemented Ongoing On Hold Completed yet % Ongoing % on hold
started completed
in public started
schools
NCR 44 0 0 44 0 100% 0% 100% 0%
Region I(Ilocos
82 33 43 6 0 40% 52% 7% 0%
Region)
CAR 44 26 0 18 0 59% 0% 41% 0%
Region II (Cagayan
32 12 18 2 0 100% 56% 6% 0%
Valley)
Figure 19: Status of Phase 2 Project Region III(Central
as of 28 June 2017 348 15 148 166 19 4% 43% 48% 5%
Luzon)
Region IV-
310 19 234 35 22 6% 75% 11% 7%
(Calabarzon)
Region IV-
27 20 7 0 0 74% 26% 0% 0%
(Mimaropa)
Region V(Bicol
426 157 189 80 0 37% 44% 19% 0%
Region)
Region VI(Western
140 68 51 21 0 49% 36% 15% 0%
Visayas)
Region VII (Central
323 95 31 197 0 29% 10% 61% 0%
Visayas)
Region VIII (Eastern
443 245 161 37 0 55% 36% 8% 0%
Visayas)
Region XVIII
54 31 1 22 0 57% 2% 41% 0%
(Negros Island)
Region IX
(Zamboanga 67 38 12 17 0 57% 18% 25% 0%
Peninsula)
Region X (Northern
26 19 3 4 0 73% 12% 15% 0%
Mindanao)
Region XI (Davao
51 0 0 51 0 0% 0% 100% 0%
Region)
Region XII
35 20 15 0 0 57% 43% 0% 0%
(Soccsksargen)
Region XIII
35 26 4 5 0 74% 11% 14% 0%
(Caraga)
ARMM 13 4 9 0 0 31% 69% 0% 0%
Total 2500 828 926 705 41 33% 37% 28% 2%
DOH commented that the Secretary had already advised the contractor for
Phase 1 of the time extension up to July 25, 2017 for 2,469 school sites that
were validated and with no pending issues while the remaining 731 sites with
pending or unresolved issues will be subject to contract termination if not
resolved by August 31, 2017. In addition, all Regional Offices were requested
Page 31 PAO-2017-05
for updated validation of accomplishment report on the status of the project.

A Department Order No. 2016-0133-A 21 was issued on July 07, 2017 to
amend the guidelines in the implementation of the project by including
provisions whereby the concerned City Health Officers and Municipal Health
officers are requested, among others, to assist the DOH Regional Office in
the monitoring of construction and to recommend public elementary schools
to serve as replacements for public school sites declared as unworkable by
the DOH Regional Office.
Consequently, the non-completion of BHS in public schools adversely

affected the procurement and distribution of 5,000 TSeKap Packages
amounting to ₱175 million intended for the said BHS. These packages were
delivered to ROs in June 2016. In addition, 5,700 units of weighing scale
with height measurement amounting to ₱43 million procured in 2016 were
also shipped/forwarded to RO’s in September to November 2016 and could
not yet be distributed to the BHS in public schools.
Memorandum of HFDB to the Office for Field Implementation and

Management (OFIM) dated November 2, 2017, disclosed that only 338 units
for Phase 1 and 38 units for Phase 2 were completed per validation reports
of the Regional office as of July 31, 2017. This indicated lower project
completion rates compared to status of project implementation as of June
28, 2017 presented in Tables 6 and 7.
Management explained that the TSeKap packages for the school based BHS
are now being utilized by Barangay health workers with or without BHS in
schools. As this specific purchase of TSeKap packages was intended for
school-based BHS, the operation of affected school-based BHS may suffer
once they become operational. Likewise, it was noted that BHS outside
schools were already provided with the same package in separate purchases
made by the DOH.
Need for efficient

utilization of
program budget to
improve the impact
of providing and
equipping health
facilities
Sec. 20 of the General Provisions of the GAA provides that procurement
activities shall be conducted early to ensure full budget utilization, timely
contract implementation and efficient delivery service.
Unobligated balance of allotment on the current year’s appropriation is still

valid for obligation in the following year under the continuing appropriation.
Any balance of allotment from (CONAP) not obligated within the year shall
lapse and will not be valid for obligation in the succeeding year.
_______________________________________________________
21 Amendment to Guidelines on the Implementation of the Project to Establish
Barangay Health Stations in Public Schools under
the Health Facilities Enhancement Program
Page 32 PAO-2017-05
Review of utilization of allotments for the program for FYs 2014 to 2016
revealed that the percentage of amount obligated as commitments compared
to the total allotment for the current year was 58% in 2014, 89% in 2015 and
68% for 2016. The balance of allotments which was treated as continuing
appropriation in the following year, however, was not fully utilized. For three
years, ₱344.9 million was not utilized to the disadvantage of the program as
presented in Table 8.
Table 8: Allotments vs. Obligations for HFEP FYs 2014-2016
Balance of Balance of
Percentage
Source Allotment Obligations allotment – allotment –
of utilization
Current Year CONAP
GAA 2016 ₱23,425,736,000.00 ₱15,844,482,743.67 ₱7,581,253,256.33 68%
CONAP 2015 1,287,533,667.22 1,209,723,668.61 77,809,998.61 94%
GAA 2015 11,254,432,510.00 9,988,903,606.84 1,265,528,903.16 89%
CONAP 2014 2,763,587,265.80 2,554,577,210.50 209,010,055.30 92%
GAA 2014 6,491,906,300.00 3,749,480,578.20 2,742,425,721.80 58%
CONAP 2013 4,265,130,041.97 4,207,093,790.39 58,036,251.58 99%
Total ₱344,856,305.49
The low utilization of the budget or allotment can be attributed to the delayed
procurement of equipment and contracting for the implementation of
infrastructure projects. Contributing also to the lower utilization of allotment
is the programming of high amounts for procurement due to excessive unit
costs of items in the PPMP/APP. This has resulted in the balance of the
● ● ● programmed amount or savings after the procurement has been
awarded/contracted which may need to be reprogrammed for additional
Low budget utilization procurement or may lapse if the balance comes from continuing
and unexpended appropriation.
allotments from
continuing Analysis of a number of purchases by the DOH Central Office revealed
appropriations programmed amount higher by at 106% to a high of 373% compared to the
● ● ●
awarded contract price resulting in significant amount that were not efficiently
utilized:
Page 33 PAO-2017-05
Table 9: Comparison between Estimated Unit Costs per PPMP and Actual Unit Costs per
Purchase Order of Selected Items
Programmed/PPMP Difference in Unit Cost

Difference in
Item
Unit Cost Total Amount PO No. Qty Unit Cost Total Amount Amount % Total Amount
ABG
₱1,000,000.00 ₱7,000,000.00 GOP-2014-252 7 ₱485,000.00 ₱3,395,000.00 P515,000 106% ₱3,605,000.00
Machine
EENT
₱30,000.00 ₱14,310,000.00 GOP-2014-279 434 ₱9,000.00 ₱3,906,000.00 21,000 233% ₱10,404,000.00
Diagnostic
Carditocogr
aph
₱160,000.00 ₱9,280,000.00 GOP-2014-280 57 ₱60,750.00 ₱3,462,750.00 99,250 162% ₱5,817,250.00
Machine/Fe
tal monitor
Patient
₱400,000.00 ₱81,600,000.00 GOP-2014-242 204 ₱84,500.00 ₱17,238,000.00 315,500 373% ₱64,362,000.00
monitor
Electrocaut
₱1,500,000.00 ₱37,500,000.00 GOP-2014-197 25 ₱345,000.00 ₱8,625,000.00 1,155,000 335% ₱28,875,000.00
ery
Clinical
centrifuge, ₱40,000.00 ₱7,400,000.00 GOP-2014-154 185 ₱19,001.00 ₱3,515,185.00 20,999 111% ₱3,884,815.00
12 placer
Weighing
scale with
height ₱15,000.00 ₱85,500,000.00 GOP-2016-103 5,700 ₱7,498.00 ₱42,738,600.00 7,502 100% ₱42,761,400.00
measurem
ent
Total ₱242,590,000.00 ₱82,880,535.00 ₱159,709,465.00
Likewise, review of the Status of Public Bidding (2014 HFEP-Equipment -

Small Ticket) for NCR-RO revealed that savings of ₱33,912,047 or 40% was
generated from the procurement programmed at ₱85,784,175 per Approved
Budget for the Contract (ABC). The significant difference, which was brought
by a higher estimated unit price in a number of items, was as high as 342%
compared to the awarded contract price.
Management commented that the unutilized balance of CONAP pertained to

a DOH-wide savings realized due to late SARO release and accumulation of
balances of allotments in view of late procurement process. Other reasons
for savings included bid failure, cancellation of procurement and lower bid
proposals due to economy of scale and entry of more bidders. On the higher
estimated costs, Management explained that the ABCs set in 2012 were
retained based on comparison with bidded costs which did not change
despite dollar fluctuation rates. Branded equipment and their history of
performance were also considered.
Low utilization of budget appropriated and allotted to the program and

continuing appropriations not fully utilized impact on the efficient budget
utilization and provision of equipment to intended health facilities.
Page 34 PAO-2017-05
Implementation
gaps recur due to
some underlying
causes
Review of the audit findings reported by COA in its CAARs and ML from 2013
to 2016 revealed that gaps in the program implementation persisted. These
gaps pertain to idle/unutilized equipment due to reasons which include,
among others, beneficiary health facilities still not ready/operational, with
existing similar equipment, undelivered/undistributed equipment to intended
health facilities, equipment not needed/requested, defective equipment and
lack of manpower and training. For infrastructure projects, recurring findings
pertained to delayed procurement, start, completion and utilization or still
unutilized/non-functional health facilities.
Table 10: Common Audit Findings from COA CAARs and MLs for 2013 to 2016
Issues 2013 2014 2015 2016*
a) Equipment
Idle/Unutilized equipment
₱21,932,853.76 ₱392,667,859.87 ₱138,028,427.50 ₱78,188,329.50
due to various reasons
Delayed
distribution/transfers to
100,329,721.95 90,662,485.06
ROs/end-users or
undelivered
Defective equipment 50,520,800.61 Undetermined amount
b) Infrastructure projects
Delayed procurement,
start, completion and ₱2,641,222,262.81 ₱836,039,000.00 ₱1,775,717,571.97 Undetermined amount
utilization
Note: *Audit findings from 2016 Management Letter
● ● ●
Validations by the DOH Internal Audit Service and the HFDB also revealed
Remedial measures to similar issues and gaps affecting the efficient, economic and effective
address the implementation of the program.
implementation gaps
A number of Department Memoranda were issued by the Secretary of
● ● ●
Health to address and resolve the findings reported by the COA and grant
authority to DOH Regional Directors to reallocate equipment:
a) Department Memo No. 2016-022022 dated 23 June 2016 reiteration and

compliance to DM No. 2015-0197 dated June 17, 2015 and DM No.
2015-197A dated July 3, 2016 and additional COA Recommendation on
HFEP Implementation.
_______________________________________________________
22Reiteration
of and Compliance to DM No.2015-0197 dated June 17. 2015 and DM
No. 20L5-0197-A dated July 3, 2016 and Additional COA Recommendation on
HFEP Implementation
Page 35 PAO-2017-05
b) Department Memo No. 2015-019723 and 2015-197-A24 dated 17 June

and 3 July 2015 respectively authority to plan and execute the re-
allocation of HFEP Equipment delivered to various HFEP facilities in
assigned regions for rational and optimal use and in response to COA
Audit Observation Memorandum (AOM) No. 15-029-104 (14) dated
June 29, 2015.
Among the instructions and measures provided, included among others, the
conduct of 100% validation in all recipient health facilities as to the receipt of
equipment, condition and utilization thereof; conduct of actual needs
assessment and capacity/ readiness; intensive supervision in the
construction and completion of health facilities, examination and
investigation of defective equipment and provision of necessary assistance
to health facilities; and utilization of contractual personnel for the monitoring
and encoding of data.
In spite of the measures prescribed in the said Department Orders, gaps

could not be fully resolved in the case of the findings reported in the CAAR
2015. Of the ₱279.2 million worth of equipment attributed to the deficiencies
identified, Management submitted supporting documents with actions to
settle ₱142.7 million deficiencies or 51% in 2016. Review and analysis,
however, revealed that only ₱69.5 million or 25% could be considered
● ● ●
relevant to the issues raised in the audit report.
Underlying causes for the These remedial measures should be complemented with measures to
implementation gaps not address the root causes of the noted implementation gaps. The resulting
sufficiently addressed gaps in the program implementation that manifested in the health facilities
and ROs could be attributed to the deficiencies noted in the procurement and
● ● ● distribution of equipment by the Central Office. For the construction of health
facilities, the ROs had lapses particularly on onsite validation of project
proposals, coordination with LGUs and other agencies and monitoring of
project implementation to ensure the timely provision of upgraded facilities.
Monitoring and reporting has not been adequate to provide complete

information in a timely manner for decision -making and appropriate remedial
measures. The HFEP-Management Office was created on December 29,
2015 by the Secretary under DPO No. 2015-5511 25 for the purpose of
monitoring the HFEP projects. However, this Office was dissolved in
December 2016. The existing resources in the ROs might not also allow to
perform regular monitoring for HFEP as noted in one of the Department
Memoranda of the Secretary, instructions had to be given to Regional
Directors to hire personnel for monitoring purposes.
Management concurred on the absence of continuous monitoring and cited

that high turnover of personnel handling HFEP contributed to the recurrence
of implementation gaps. It was also pointed out that the significant increase
in program budget without complementary increase in technical personnel
especially in the region and the change of priorities of DOH Secretaries from
2011 to 2016 also contributed to the recurring gaps.
_______________________________________________________
23Authority to Plan and Execute the Re-allocation of HFEP Equipment delivered to
various Health Facilities in their respective assigned Regions for Rational and
Optimal use.
24 Addendum to Department Memorandum No. 2015-0917 dated June 17, 2015 and
in Response to COA-AOM No. 15-029-104 (14) dated June 29, 2015

25 Creation of the Health Facility Enhancement Program Management Office
Page 36 PAO-2017-05
HFDB could not provide the audit team with the complete monitoring reports
on the status of equipment delivered to the regions. Likewise, status reports
on the implementation BHS in public schools as of 2017 were not complete
and different formats of reports were used. Monitoring has been identified
as one of the challenges in the implementation of the program as reported in
the Kalusugan Pangkalahatan 2010-2016: An Assessment Report.
Currently, Management has taken actions to address the gaps through the
following:
● ● ●
a. Designation of dedicated HFDB personnel to handle all HFEP concerns;
Management’s corrective b. Updated tracking of status of equipment;
actions and preventive c. Continuous hiring of regional HFEP personnel for implementation and
action plan to manage monitoring purposes;
implementation gaps d. Further review of HFEP availment guidelines (readiness of structure and
HR);
● ● ● e. Use of Integrated Hospital Operations and Management Information
System (IHOMIS) for the improvement of monitoring and evaluation of
HFEP implementation through e-budget, e-procurement and e-audit;
and
f. Requested DBM for plantilla positions for HFEP.
The main objective in the performance audit of the HFEP is to assess the
Conclusions
extent to which the program goals were achieved at end of 2016 taking into
consideration whether the program has been implemented in efficient,
economical and effective manner.
At least ₱54 billion was budgeted for the program from 2014 to 2016 to
enable the DOH to improve access to health care facilities. The benefits from
this heavily funded program of the DOH can be realized by ensuring that
relevant guidelines for the effective, economical and efficient implementation
of the program are in place and adhered to by the concerned implementers.
The provision of health facilities was, however, hampered by a number of

challenges. While the DOH Regional Offices were responsible for validation
and submission of project proposals for budgeting by the Central Office,
compliance with the guidelines in ensuring the proposed projects for
implementation need to be improved. Issues relating to availability of project
sites, realignment and modifications on the projects, suspension and delay
in approval of MOA and permits by LGUs, delay in the release of SARO
impact on the timely implementation and completion of health facility
projects.
Delays in the implementation and completion of infrastructure projects were

noted in the DPWH and DOH-NCR implemented projects. A number of
DPWH projects funded in a given year would require three years to
implement. Percentages of construction projects completed in the same
period they were funded ranged from 0 to 33%. Delayed completion of
projects also impacts on the procurement and distribution of equipment
procured under the program. As the facilities are not yet completed and
operational, the procured equipment intended for them remain idle, unutilized
and undistributed.
Similarly, equipping of health facilities was faced with implementation gaps

impacting on the timely provision of the required equipment for the upgrading
and accreditation of facilities. Equipment procured by the Central Office were
not all based on the identified needs of the intended recipient facilities. This
Page 37 PAO-2017-05
condition resulted in the idle/unutilized equipment in the health facilities and

the reallocation of equipment from intended beneficiaries to other health
facilities.
Late initiation of procurement activities, delayed contracting, delivery and

distribution of equipment do not contribute to the efficient and maximum
utilization of equipment. The undistributed, unused, defective and inferior
quality of equipment at health facilities impact on the effective, efficient, and
economical use of program resources.
The project establishing 5,700 BHS in public elementary schools in 2015 and
2016 was not effectively and efficiently undertaken. The absence of definitive
guidelines at the start of the implementation of the project resulted in the
delayed implementation due to ineligible public schools as project sites in
addition to unworkable project sites originally identified for the projects. The
low completion of projects again impacts on the procurement and distribution
of equipment intended for these school-based BHS.
The program budget utilization was also not maximized. Low budget
utilization in the current year resulting in continuing appropriation in the
following year, of which ₱345 million was not utilized and reverted to the
national government from 2014 to 2016 to the disadvantage of the program.
The reporting of program results and impact to assess the effectiveness of

the program in terms of attainment of program goals need enhancement. The
deficiencies in the indicators, targets and data reported on the 2016 MFOs
for the program impact on the commitment and accountability of the
Secretary. From 2011 to 2015, no evaluation was undertaken to track the
progress on the desired future state of the program at end of 2016 in spite of
the significant increase in the number of health facilities funded for upgrading
and construction. Moreover, the Kalusugan Pangkalahatan 2010-2016: An
Assessment Report presented the number of health facilities funded by the
HFEP for the period without an assessment on whether the desired
improvement in the access to quality hospitals and health care facilities has
been achieved.
Overall, the implementation of the program for the period under audit was
hampered by recurring implementation gaps which were not totally resolved
by remedial measures instituted to address the problems. Delays and
deficiencies in the provision of facilities and equipment did not contribute to
the efficient, economical and effective program implementation. Lastly, no
information was available for program implementers and other stakeholders
on the extent of attainment program goals at the end of 2016 in view of the
deficiencies in program results and impact reporting.
Recommendations In the light of the issues raised in the implementation of HFEP, it is

recommended that DOH through HFDB and/or ROs address the causes of
recurring implementation gaps that hinder the effective, efficient and
economical implementation of the program.
HFDB need to improve its procurement planning for HFEP by ensuring that
procurement is based on the identified needs of recipient health facilities to
prevent if not minimize the existence of unutilized/idle equipment at health
facilities and undistributed items at ROs, PHOs and CHOs. Readiness for
upgrading of the recipient facilities must be assessed and validated to
prevent refusal of intended recipients and reallocation particularly for high-
Page 38 PAO-2017-05
value equipment. Generally, procurement must be conducted early to ensure

timely contract implementation, and provision of equipment needed for the
accreditation and licensing of facilities. However, appropriate timing of
procurement and distribution of equipment must be observed for the
requirements of facilities which are still in the process of procurement or
ongoing construction/upgrading. It is also recommended that controls be
strengthened on the inspection and acceptance of equipment by providing
capacity building and guidance to concerned personnel and requesting
immediate feedback from recipients on the condition of the equipment
received.
On the provision of health facilities, HFDB/DOH need to strengthen its review

and approval process of project proposals by ensuring RO’s strict adherence
to current guidelines relating to documentation and validation of submitted
proposals. Programming of infrastructure shall take into consideration the
absorptive capacity of the ROs and implementing partners to ensure timely
completion of infrastructure facilities. Intensify monitoring and coordination
with implementing partners to iron out implementation gaps and complete
the projects in a timely manner. Likewise, ensure that personnel concerned
are assigned to perform the monitoring and reporting on the status of project
implementation to provide all relevant offices with updated information on
program implementation.
Implementation gaps in the project establishing BHS in public schools must

be resolved not only in Phase I but also in Phase II to ensure the immediate
completion of the project for the benefit of the intended users of the facilities.
Moving forward, it is recommended that guidelines affecting the
implementation of a project be issued ahead of the actual implementation of
the project to prevent unnecessary delays impacting on the smooth and
timely completion of the project.
It is also recommended that HFDB/DOH ensure the timely contracting for the
provision of health facilities and equipment to ensure the full and efficient
budget utilization. Budget utilization efficiency can also be enhanced by
providing reasonable estimates of unit prices to minimize excessive
unutilized amount that may need to be reprogrammed for additional
procurement. Likewise, balances of allotment particularly from continuing
appropriation need to be monitored for full utilization to prevent reversion.
For program results and impact monitoring and reporting, HFDB must
enhance the relevant key performance indicators using the SMART
characteristics of indicators for clarity, consistency, and usefulness.
Indicators for monitoring must be distinguished from impact indicators which
are used to track progress in the attainment of goals and impact evaluation.
Setting of targets must be based on realistic estimate and guided by the
definition or description of the indicators. Similarly, data collection and
reporting must be aligned with the definition of the indicators for comparability
with the targets. Lastly, conduct an assessment on the progress of the
attainment of program goals or impact to identify gaps and be able to
strategize until a comprehensive evaluation is conducted at the end of a
medium term plan.
It is acknowledged that actions and measures have been instituted to

address some of the gaps identified. Moving forward, it is expected that
observance of these measures, along with the foregoing recommendations,
will bring improvement to the implementation of the program.
Page 39 PAO-2017-05
We provided a draft of this report to the Department of Health (DOH) for

Agency Comments comments. DOH provided technical comments, which we incorporated as
appropriate.
If you or your staff have any questions about this report, please contact me
at (02) 952-5700 local2022 or abjuliano@coa.gov.ph. Contact points for our
Performance Audit Office may be found on the last page of this report. Major
contributors to this report are listed in Appendix IV.
In addition, the report will be available at no charge on the COA website at

http://www.coa.gov.ph.
ALEXANDER B. JULIANO
Assistant Commissioner
Page 40 PA0-2017-05
Appendix I: Observations
on Indicators, Targets and
Accomplishment per 2016
GAA and 4th Quarter QPRO
2016
Definition/Description of Target Observations/
Indicator Target** Accomplishment**
Targeting and Reporting* per Deficiencies26
GAA
a) No. of All activities/ projects that 2,773 1,362 1,388 Description of the
LGUs lead to the provision of indicator does not clearly
and facilities and equipment for specify when to consider
other the LGUs and other DOH the completion of an
health partners are subsumed output as there are a lot
partners under this MFO target. For of activities that will lead
provided the physical target, count to the provision of
with only the number of LGUs facilities and equipment
facilities (Province/cities/municipaliti (i.e., contracting for the
es/chartered cities and implementation of
other DOH partners such infrastructure projects,
as NGOs, Private completion/acceptance
societies/development of project by
partners) provided with DPWH/LGU or just
facilities and equipment for completion/acceptance
the year. Do not include in of one facility if an LGU is
the targeting the DOH recipient of multiple
facilities provided with facilities or acceptance
facilities and equipment. of equipment by end-
users or acceptance of
both facility and
equipment if an LGU is
a recipient of both).
Indicators which are not
clearly defined could
result in different
interpretations that may
affect the data collection
and reporting by the
ROs.
Indicator not time-bound

to gauge the timely
provision of facilities and
equipment to LGUs and
other health partners.
For the current year,
provided facilities and
equipment would also
come from prior years’
funding which may be
reported in the current
year while the target for
the current year is based
on the facilities to be
funded from current
year’s budget.
_______________________________________________________
26Based on submitted 2016 4th Quarter QPRO to DBM
Page 41 PAO-2017-05
Appendix I: Observations on Indicators,

Targets and Accomplishment per 2016
2016
GAA
Total target of 2,773 per
GAA not fully
accounted/distributed
nationwide as the total
target based on the
QPRO was only 1,362 or
49% of the target. It
appears that the target
per GAA was not fully
supported with
breakdowns at regional
level.
Targets in at least five

regions were based not
on the number of LGUs
and other health partners
but on the number of
health facilities to be
constructed/improved
/provided with
equipment for the year.
The targets exceeded
the number of LGUs and
other health partners in
certain regions.
There is doubt in the

accuracy of reported
accomplishment for
regions which exceeded
their targets considering
the noted delays in the
completion of
and distribution of
equipment from the
current year’s funding.
One region reported its
accomplishment equals
to the target when actual
completed projects is
only 17% and the
remaining projects are in
various stages of
implementation.
b) % of Conduct client satisfaction 80% 85.47% 83.08% Targets set by the region
clients that surveys regularly. The ranged from 80% to
rate the numerator is the total 100% or the target of
Page 42 PAO-2017-05

2016
GAA
provided number of clients that rated 80% per GAA was not
facilities as the facilities civil uniformly adapted by the
good or works/equipment as good regions.
better or better for the year. The
denominator is the total Minimum number or
number of raters annually certain percentage of
among completed facilities intended users of
for upgrading. facilities as respondents
in the client satisfaction
survey was not
prescribed to obtain a
representative sample
population.
The numerator is the total 89% 91.73% 89.49% Target of 89% per GAA
c) % of number of facilities was different from the
provided that are still functional after average target of
health 3 years of acceptance or 91.73% derived from the
facilities installation of QPRO. Targets by
that are facilities/equipment for the regions ranged from 89
fully quarter. The denominator is to 100%.
operational the total number of facilities
three years of the LGUs and other The description does not
after partners provided with indicate whether the
acceptance facilities and equipment facilities which remain
/ that has been fully functional after 3 years of
installation constructed/accepted/install acceptance of
ed in the last 3 years prior facilities/equipment are
to the reporting period/fiscal still Philhealth accredited
year. or the upgraded
categories due to HFEP
interventions have been
maintained. The goals of
the program include
improving health
facilities and hospitals to
comply with DOH
licensing and PhilHealth
accreditation
requirements. As stated
in the DOH Annual
Reports from 2012 to
2015, HFEP focused on
upgrading of licensing
classification and
PhilHealth accreditation
of government
hospitals/health
facilities. The guidelines
for the availment and
Page 43 PAO-2017-05

2016
GAA
implementation of
include review and
validation of ROs on
project proposals and
request for equipment for
which LGU certify that
appropriate health or
technical are available
for the equipment and
facility. These
requirements are also
included in the MOA
between the RO and the
LGU.
d) % of The numerator is the total 92% 85.59% 79.94% Target of 92% per GAA
facilities for number of facilities that are was different from the
which operational within six average target of
funding is months after acceptance or 85.59% derived from the
provided installation of QPRO. Targets by
that are facilities/equipment within regions ranged from 82
fully the year. The denominator to 100 %.
operational is the total number of
within six facilities of the LGUs, The description was not
months including BHS and other descriptive of the
from partners provided with indicator. The indicator
approval of facilities that has been fully refers to the approval of
request constructed/accepted/install request from the LGU
from the ed during the current fiscal while the description
LGU year. refers to the
constructed/accepted/in
stalled
facilities/equipment.
Note: * Definition per DOH Department Memorandum No. 2015-0368-A

** Total target and accomplishment for 2016 based on the 4th Quarter Physical Report of Operation submitted by
DOH to DBM
Page 44 PAO-2017-05
Appendix II: Analysis of

Procured Equipment for CY
2016
Analysis of Procured Equipment

For CY 2016
Date
ITEM
PACKAGE NO. PO No. Total Amount Received - Remarks
DESCRIPTION
NTP
Supply, Delivery,
Installation and
With delay from
Commissioning of
GOP-2016-075 the planned
Radiation 5/19/2016
IB No. 2015-206 ₱115,555,552.00 January to April
Therapy
schedule of
Equipment in (4)
procurement
DOH Hospitals
(Item No. 3)
With delay from
the planned
TSEKAP
RO No. 2016-004 GOP-2016-079 5/27/2016 January to April
Package 174,982,550.00
schedule of
procurement
Supply, Delivery,
Installation and
Four months
Commissioning of
behind planned
IB No. 2016-206 Radiation GOP-2016-134 9/9/2016
393,798,000.00 schedule for
Therapy in
procurement
Selected DOH
Hospital
With delay from
MOBILE
the planned
RO NO. 2016- ANESTHESIA
GOP- 2016-082 5/25/2016 January to April
006 MACHINE 12,577,890.00
schedule of
SOLUTION
procurement
Two months
WEIGHING
behind planned
IB No. 2016-136 SCALE. With GOP-2016-103 6/30/2016
height measuring
procurement
Two months
HANGING DIAL behind planned
IB No. 2016-100 GOP-2016-125 6/29/2016
SCALE 100,000,000.00 schedule for
procurement
With delay from
the planned
IB NO. 2016-141 LINAC GOP-2016-080 5/4/2016 January to April
397,798,000.00
schedule of
procurement
Three months
behind planned
IB NO. 2016-147 MRI SCANNER GOP-2016-145 7/26/2016
procurement
Eight months
NUCLEIC ACID behind planned
IB NO. 2016-217 12/20/2016
AMPUFICATION 29,000,000.00 schedule for
GOP-2016-09-0198 procurement
Eight months
DIALYSIS behind planned
IB NO. 2016-146 GOP-2016-11-0211 12/29/2016
PACKAGE 241,018,485.00 schedule for
procurement
Total ₱1,849,969,077.00
Page 45 PAO-2017-05
Appendix III: List of relevant

DOH Orders, Circulars and
Memoranda for HFEP
Reference Subject
Department Order (DO)
DO No. 2011-0188
dated August 3, Kalusugan Pangkalahatan Execution Plan and Implementation Arrangements
2011
DO No. 2012-0065 Guidelines for the Delivery, Receipt, Inspection, Acceptance, Training, Storage, Issuance and
dated May 3, 2012 Payment of Various Equipment Procured Under the HFEP of the DOH
DO No. 2014-0071 Guidelines for the Release and Utilization of Funds to Cover HFEP Projects to Regional Offices
dated April 14, 2014 for Allocation to the different LGU Facilities
DO No. 2014-0072
Guidelines on the Implementation of HFEP for CY 2014.
dated April 15, 2014
DO No. 2014-0081
General Guidelines for the Availment and Processing of HFEP FY 2015
dated May 6, 2014
DO No. 2014-0072-A Amendment to DO 2014-0072 dated April 15, 2014 on the Guidelines on the Implementation of
dated May 15, 2014 HFEP for CY 2014
Revised Guidelines on the Implementation of HFEP for CY 2014 as an Amendment to DO 2014-
DO No. 2014-0072-B 0072 , “Guidelines on the Implementation of HFEP for CY 2014 and DO 2014-0072-A dated
dated July 1, 2015 May 14, 2014, “Amendment to DO 2014-0072 dated April 15, 2014 on the Guidelines on the
Implementation of HFEP for CY 2014
Guidelines for the Release and Utilization of the funds transfer to the 17 Regional Offices (ROs)
DO No. 2014-0116 for the Hiring of Contractual Registered Nurses and Computer Programmers for the Monitoring
dated July 11, 2014 of Equipment under Health Facilities Enhancement Program Projects of the Department of
Health
Guidelines for the Release and Utilization of the Sub-Allotment of Fund to the 17 DOH Regional
DO No. 2015-0015 Offices (ROs) for the Hiring of Contractual Architects and Engineers to Support the Infrastructure
dated February 11, Units of the Centers for Health Development for the Planning, Design Development and
2015 Evaluation and Monitoring of Implementation of the 2013, 2014 and 2015 Health Facilities
Enhancement Program Projects of the Department of Health
Guidelines for the Release and Utilization of the Sub allotment of Funds to the 17 Regional
DO No. 2015-0016
Offices (ROs) for the Hiring of Contractual Registered Nurses or Data Encoders for the Inventory
dated February 11,
of Health Facilities Equipment and Monitoring of Equipment under Health Facilities
2015
Enhancement Program Projects of the Department of Health
DO No. 2015-0020 Guidelines for the Release and Utilization of the Sub-allotment of Funds to the 16 DOH Regional
dated February 11, Offices (ROs) for the Monitoring and Evaluation of Health Facilities Enhancement Program
2015 Projects of the Department of Health
DO No. 2015-0063 Guidelines for the Release and Utilization of the Sub-allotment of Funds to the DOH Regional
dated March 25, Office-NCR for the Monitoring and Evaluation of Health Facilities Enhancement Program
2015 Projects of the Department of Health
DO No. 2015-0128
Guidelines on the Implementation of Health Facilities Enhancement Program for CY 2015
dated July 1, 2015
Guidelines for the Release and Utilization of the Sub allotment of Funds DOH Regional Office I
DO No. 2015-0212
(RO I), San Fernando, La Union for the Hiring of Contractual Registered Nurses or Data
dated October 21,
Encoders for the Inventory of Health Facilities Equipment and Monitoring of Equipment under
2015
Health Facilities Enhancement Program Projects of the Department of Health
DO No. 2015-0287
Guidelines In the Preparation for Availment and processing of DOH Health Facilities
dated December 28,
Enhancement Program(HFEP) Projects for FY 2016
2015
DO No. 2016-0045
Guidelines for the Preparation and Selection of Projects for Health Facilities Enhancement
dated February 29,
Program or HFEP FY 2017
2016
Page 46 PAO-2017-05
Appendix III: List of relevant DOH

Orders, Circulars and Memoranda for
HFEP
Reference Subject
DO No. 2016-0110
Guidelines for the Implementation of Health Facilities Enhancement Program (HFEP) FY 2016
dated April 4, 2016
DO No. 2016-0133 Guidelines on the Implementation of the Project to establish Barangay Health Stations in Public
dated May 13, 2016 Schools under the HFEP Health Facilities Enhancement Program
Amendment to Department Order No. 2016-0133 dated May 13, 2016 entitled, “Guidelines on
DO No. 2016-0133A
the Implementation of the Project to establish Barangay Health Stations in Public Schools under
dated July 07, 2017
the Health Facilities Enhancement Program” To include item no 6 in B Monitoring, Inspection and
Reporting
DO No. 2016-0234A Amendment to Department Order No. 2016-0234 dated September 16, 2016 regarding
dated October 14, Guidelines for the Release and Utilization of the Sub-Allotment of Funds to the following DOH
2016 Regional Office for the conduct of Soil Testing of Project Sites
DO No. 2017-0050 Department of Health (DOH) Functional Structure for the Attainment of Philippine Health
dated March 01, 2017 Agenda
Administrative Order (AO)
AO No. 2010-0036
dated December 16, The Aquino Health Agenda: Achieving Universal Health Care for All Filipinos
2010
Department Memorandum (DM)
DM No. 2010-0104
Process Flow for Approval of Health Facility Enhancement Program (HFEP) Fund Allocation
dated April 23, 2010
DM No. 2012-0170 Creation of Teams for the Planning, Monitoring and Evaluation of Health Facilities Enhancement
dated June 15, 2012 Program (HFEP)
DM No. 2013-0216
Monitoring and implementation of Health Facilities Enhancement Program
dated July 17, 2013
DM No. 2014-0122 Submission of HFEP Project Status from 2009-2012 and other Hospital-related Data to the
dated April 29, 2014 NCHFD-DOH
DM No. 2014-0178 Regular Submission of HFEP Project Implementation Status and Functionality and Pictures of
dated June 11, 2014 Before and After Implementation
DM No. 2014-0277
dated September 15, Permit to Construct HFEP Projects
2014
DM No. 2015-0197 Authority to Plan and Execute the Re-Allocation of HFEP Equipment Delivered to Various Health
dated June 17, 2015 Facilities in Their Respective Assigned Regions for Rational and Optimal Use
DM No. 2015-0197 A Addendum to Department Memorandum No. 2015-0197 dated June 17, 2015 and in Response
dated July 3, 2015 to COA–AOM No. 15-029-104 (14) dated June 29, 2015
DM No. 2015-0204
Procurement of 2014 HFEP funded equipment for Local Government Unit(LGU) Health Facilities
dated July 2, 2015
DM No. 2015-0251
dated August 3, Purchase of Weighing Scale with Height Measuring Stick
2015
DM No. 2015-0368
dated October 27, Guidelines for FY 2016 Work and Financial Plan(WFP)
2015
DM No. 2016-0009
dated January 13, Preparation for Planning for HFEP 2017
2016
DM No. 2016-0138 Supplemental Guidelines on the Distribution of Wheelchairs to Primary Health Care Facilities
dated April 8, 2016 Nationwide.
DM No. 2016-0102
Instructions Regarding Distribution of Wheelchairs to Primary Health Care Facilities Nationwide
dated March 7, 2016
DM No. 2015-0368A Amendment to Department Memorandum No. 2015-0368 dated October 27, 2015, entitled
dated April 7, 2016 “Guidelines for FY 2016 Work and Financial Plan (WFP)”
DM No. 2016-0220 Reiteration and Compliance with DM No. 2015-0197 dated June 17, 2015 and DM NO. 2015-
dated June 23, 2016 0197-A dated July 3, 2016 and Additional COA Recommendation on HFEP Implementation
Page 47 PAO-2017-05
Appendix III: List of relevant DOH

Orders, Circulars and Memoranda for
HFEP
Reference Subject
Department Circular (DC)
DC No. 2012-0433
dated December 20, Release of the Health Facilities Enhancement Program Tracking System (HFEPTS) Version 1.0
2012
DC No. 2013-0009
General Guidelines for the Availment and Processing of Health Facilities Enhancement Program
dated January 2,
FY 2014
2013
DC No. 2014-0002
New Website Host/URL of the Health Facilities Enhancement Program Tracking System
dated January 10,
(HFEPTS)
2014
Department Personnel Order (DPO)
DPO No. 2014-3262 Conduct of Rapid Monitoring of Health Facilities Enhancement Program(HFEP) Funded Projects
dated July 28, 2014 in LGUs and DOH Health Care Facilities from August 4 to September 5, 2014
DPO No. 2015-0365 Conduct of Monitoring and Assessment of Health Facilities Enhancement Program(HFEP)
dated January 20, Funded Projects in LGUs and DOH Health Care Facilities from 2011, 2012, 2013, 2014 in
2015 February to March 2015
Conduct of Monitoring and Assessment of Health Facilities Enhancement Program(HFEP)
DPO No. 2015-1028
Funded Projects in LGUs and DOH Health Care Facilities from 2011, 2012, 2013, 2014 in Davao
dated March 9, 2015
Oriental on March 17-21, 2015
Authority for Selected Staff of the DOH Central Office, Regional Health Facilities Enhancement
Program (HFEP) Coordinators, Regional Civil Engineers and Contractual Architects to Attend
DPO No. 2015-2346
Coordination Meeting to discuss the Implementation of the Proposed 2015 HFEP Projects of
dated May 15, 2015
LGUs for DPWH Implementation on May 25-27, 2015 at Ciudad Christhia Resort, San Mateo,
Rizal
Amendment to Department Personnel Order No. 2015-2346 dated May 15, 2015 entitled
Authority for Selected Staff of the DOH Central Office, Regional Health Facilities Enhancement
DPO No. 2015-2346A
Program (HFEP) Coordinators, Regional Civil Engineers and Contractual Architects to Attend
dated October
Coordination Meeting to discuss the Implementation of the Proposed 2015 HFEP Projects of
30,2015
LGUs for DPWH Implementation on May 25-27, 2015 at Ciudad Christhia Resort, San Mateo,
Rizal
DPO No. 2015-5511
dated December 29, Creation of the Health Facilities Enhancement Program Management Office
2015
DPO No. 2016-0209
Creation of the Technical Working Group for the Implementation of School-based Health Station
dated January 22,
Project
2016
DPO No. 2016-4881
Rescission of DPO No. 2015-5511, “Creation of the Health Facilities Enhancement Program
dated December 28,
Management Office” dated December 29, 2015
2016
Joint Circular (JC)
DBM-DOH-DPWH JC
No.1 dated August 2, Guidelines on the Implementation of the HFEP under the FY 2013 Budget of the DPWH.
2013
Page 48 PAO-2017-05
Appendix IV: COA Contact

and Staff Acknowledgments
Alexander B. Juliano (Assistant Commissioner), (02) 952-5700 local 2022 or

COA Contact abjuliano@coa.gov.ph
In addition to the contact named above, Emelita R. Quirante (Director IV),

Staff Michael L. Racelis (Director III), Marieta V. Andoy (Team Supervisor), supervised
Acknowledgments the audit and the development of the resulting report. Catalina T. Aure (Audit Team
Leader), Lydia R. Duzon (Audit Co-Team Leader), Edna B. Rodriguez,
Lucila C. Macayana, and Mark Anthony G. Cabuco (All Team Members) made key
contributions to this report with the assistance of Priscilla DG. Rivera.
Page 49 PAO-2017-05

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Performance Audit Report

Program Implementation Gaps

Audit HEALTH FACILITY ENHANCEMENT PROGRAM

Program Implementation Gaps Impacting on the Efficient,

Level of program success not evaluated in the light of deficient

Equipping of health facilities affected by procurement not based on

Need to improve compliance with guidelines on selection of projects

Project establishing BHS in public elementary schools not effectively

Need for efficient utilization of program budget to improve the impact

Implementation gaps recur due to some underlying causes 35

Appendix I Observations on Indicators, Targets and Accomplishment per 2016

Appendix II Analysis of Procured Equipment for CY 2016 45

Appendix IV COA Contact and Staff Acknowledgments 49

Table 2: Allocation of Budget to Infrastructure Facilities and

Table 3: Status of Projects Implemented from 2014-2016 23

Table 4: Details of implementation of 5,700 School-Based BHS 27

Table 5: Analysis of Project Sites for School-Based BHS 28

Table 6: Status of Project Implementation of 3,200 School- Based

Table 7: Status of Project Implementation of 2,500 School-Based

Table 8: Allotment vs. Obligations for HFEP FY 2014-2016 33

Table 9: Comparison between Estimated Unit Costs per PPMP and

Figure 1: Budget Allocated to HFEP from 2008-2016 4

Figure 2: Screening Process for Project Proposal under HFEP 5

Figure 3: Definition of Indicators for Monitoring and Evaluation 7

Figure 4: Key Performance Indicators 8

Figure 5: Desired improvement in access to quality health facilities 10

Figure 6: Desired improvement in quality from inpatient and 11

Figure 7: Comparison of facilities per NOH/KP and Per GAA, CYs 12

Figure 8: Vaccine Refrigerator procured in 2015 remained 15

Figure 9: Autoclave, 50 Liters procured in 2014 remained unutilized 16

Figure 10: Weighing Scale units procured in 2014 remained 16

Figure 11: MRI procured in 2016 uninstalled at Jose Reyes Memorial 16

Figure 13: Blood Bank refrigerator procured in 2014 used as

Figure 14: Sample Photo of Olympus Binocular Microscope 20

Figure 15: Binocular Microscope units procured in 2015 remained 20

Figure 16: Binocular Microscope units procured in 2015 remained 20

Figure 17: Binocular Microscope units procured in 2015 remained 21

Figure 18: Status of Phase 1 Project as of 28 June 2017 30

Figure 19: Status of Phase 2 Project as of 28 June 2017 31

Page iii PAO-2017-05

AAR Annual Audit Report

NEP National Expenditures Program

December 29, 2017

DR. FRANCISCO T. DUQUE III

Dear Secretary DUQUE:

In line with its vision to become an enabling partner of the government in

The audit primarily covered selected transactions of HFEP at the DOH

We reviewed applicable laws, rules, regulations and related guidelines to

As one of the initiatives of COA performance audit, we would like to provide

One of the major challenges in the Philippine health sector is providing

The DOH is implementing “improved access to quality hospitals/health

Table 1: Annual Priorities and Objectives of HFEP 2011-2016*

BHS, RHU, LGU Hospitals and

• Ensure the achievement of the health system goals of better health

*Source: HFEP briefer Presentation by DOH

Figure 1: Budget Allocated to HFEP from 2008-2016

Table 2: Allocation of Budget to Infrastructure Facilities and

Year Infrastructure Equipment Total

2014 ₱9.143 ₱4.399 ₱13.542

2015 10.419 2.853 13.272

2016 18.961 7.911 26.872

Total ₱38.523 ₱15.163 ₱53.686