NEA’s audit report on Aklan electric coop operations

BY BOY RYAN B. ZABAL

The latest comprehensive operations audit report of National Electrification Administration (NEA) is causing serious trouble to some officials of Aklan Electric Cooperative, Inc. (Akelco). 

Atty. Ariel Gepty, vice president of Akelco board of directors, said the power distribution utility has to answer the NEA audit findings on the management and financial affairs of Akelco by next month.

Gepty said an investigating committee is also being formed to look into the involvement and the possible accountability of Akelco employees and officials arising from the adverse NEA audit report. 

Even before the NEA audit report came out, Gepty and other directors have been “vocal to reform Akelco and to expose officials involved in the alleged controversies in Akelco.”

Last month, Gepty asked NEA Administrator Editha Bueno, for the interest of member-consumers, to investigate Akelco in the light of the alleged irregularities.”

Earlier, the beleaguered Akelco general manager Chito Peralta has announced his ‘early retirement plans’ ahead of the Annual General Membership Assembly (AGMA) next month, citing personal reasons – to spend more time with his family.

Gepty said a special audit team will also conduct an in-depth probe on how Akelco spent the NEA’s grant under the Yolanda Rehabilitation and Recovery Plan (YRRP) involving close to P200 million.

The grant financed the rehabilitation and reconstruction works of distribution lines and systems of Akelco damaged by super typhoon Yolanda last year.

NEA Audit Report

The audit report dated April 1, 2014 covering the operations of Akelco from April 1, 2009 to September 30, 2013 was signed by Veronica Cruz, director of Electric Cooperatives Audit Department and NEA Deputy Administrator Edgardo Piamonte of the Electric Distribution Utilities Services.

Akelco, classified as Class 'AAA' Mega Large, received the NEA audit report last week. 

In its findings, NEA audit body took notice of Akelco’s  net loss of P24.9 million for year 2012 and the accumulated losses of P739.445 million. 

Akelco, however, realized a net margin of P6.385 million from January to September last year.

The audit report also cited that some non-power costs exceeded the approved budget of P10.512 million in 2011 and P28.850 million in 2012.

The NEA report also showed ‘weaknesses’ on the electric cooperative procurement and public bidding procedures, among others, Akelco did not required winning bidders to post performance bond as provided by the EC’s procurement policy and no corresponding bid tenders from the bidders in the Abstract of Bids signed by the Bids and Awards Committee (BAC).

Further, the audit team cited Akelco's invitation to bid was advertised only at Panay News and Western Visayas Informer, both regional newpapers published in Panay Island which, according to NEA report, "cannot be considered newspapers of general and national circulation, thus discouraging competition."

Also, the NEA audit report also noted that ‘no public biddings’ were conducted for the P22.929 million contract agreement and the P30 million supplemental agreement between Akelco and an airport developer for the development and expansion of Caticlan airport in Malay, Aklan.  

Both contracts, however, were awarded to NLB Enterprises, the audit report stated.  

As of audit date, the special equipment donated by Korea Electric Power Company (KEPCO) has yet to install by Akelco despite it already spent P16.574 million for refurbishing and delivery to the electric cooperative. 

In its technical audit, NEA also noted that Akelco failed to monitor the feeder loads at Lezo and Nabas substations, Andagao substation was loaded at 82.56 percent while Caticlan substation was underloaded at 22.36 percent and the distribution transformers have no identification numbers and lightning arrester.

NEA report also found out Akelco’s deployment of security guards ‘too many’ in its main office, hiring of job order employees and consultants numerous and unnecessary and the zero reading of 3,723 out 114,070 billed customers for the month of October 2013 at an alarming rate.