BACKGROUND

The rapid increase in population and urbanization as well as intensifying economic activities have all contributed to the generation of solid wastes, particularly in the urban centers like Metropolitan Manila. Thus, the problem of solid wastes and its management has become the genuine concern of the nation. If solid wastes are not properly handled, it could cause serious health and environmental problems.

According to internationally accepted definition, solid waste is non-liquid waste material arising from domestic, trade, commercial, industrial and mining activities. It also includes wastes arising from the conduct of public services such as street sweepings, landscape maintenance and the clearing of typhoon-wrought debris. Solid Waste Management (SWM) on the other hand refers to all activities pertaining to the control, transfer and transport, processing and disposal of solid wastes in accordance with the best principles of public health, economics, engineering conservation, aesthetic and other environmental considerations.

The Local Government Code of 1991 (R.A. 7160) has devolved the responsibility for SWM and other environmental concerns to the Local Government Units (LGUs). However, LGUs are still hard put in finding ways and means to properly manage their solid wastes.

The SWM system has six (6) elements: waste generation, transfer, recovery/processing, storage, collection and disposal. The audit focused on solid wastes collection because this element deserves careful consideration as it can become the most expensive SWM function. The uncollected solid wastes piling up in the streets within Metro Manila has become the subject of media criticism.

The City Government of Makati implements SWM by contracting out the services of solid wastes collection and disposal. Makati is one of the highly urbanized cities in Metropolitan Manila. It is the premier business and financial center of the country and a model for urban centers in the country. The City has 33 barangays, 6 of which are affluent villages that have their own contractors for solid wastes collection and disposal. It has a land area of 1,278,631 hectares, excluding the six barangays and commercial business district. It had a population of 471,379 and 468,861, in 2000 and 2001, respectively.

Makati City's Solid Waste Management Division (SWMD) has 535 existing personnel headed by the Officer-in-Charge. It is in charge of monitoring solid wastes collection and disposal, street and sidewalk cleaning, physical cleanliness, maintenance of white washed gutters and conduct of special activities of the city government. The operating budget for Environmental Services Department, where SWMD is a part of, is P433.6 million and P544.4 million in 2001 and 2002, respectively.

AUDIT OBJECTIVE

The audit objective was to determine whether solid wastes collection function was undertaken in the most efficient and economical manner giving consideration to:

• Selection of contractors including the process of estimating solid wastes generation; and
• Monitoring of contractor's performance.

AUDIT SCOPE AND METHODOLOGY

The audit covered the evaluation of selected contracts covering January 2001 to June 2002 of 7 Cities undertaking SWM by contracts within the National Capital Region including Makati City. The audit also included evaluation of 3 Cities undertaking SWM by administration for comparative purposes. The performance of the Cities was evaluated using the following criteria:

• Established policies and procedures;
• Appropriate resources;
• Sound management and monitoring mechanisms;
• Effective quality assurance processes; and
• Cost measures

The team conducted the following procedures during the audit:

• Reviewed the existing policies and procedures in the selection of contractors and monitoring their performance;
• Interviewed personnel assigned in SWM;
• Reviewed selected contracts and evaluated selection process;
• Conducted ocular inspection of facilities used in solid wastes collection function;
• Reviewed records maintained in monitoring the performance of contractors;
• Evaluated the system of monitoring contractor's performance;
• Assessed the effectiveness of the risk management process in place; and
• Administered survey questionnaires to selected barangay officials and residents.

The audit was conducted from August 5 to 28, 2002 pursuant to COA Assignment Order No. 2002-021 dated July 18, 2002.

AUDIT CONCLUSION

The audit concluded that generally, the City has not efficiently and economically carried out its SWM functions through the satisfactory selection of contractors and monitoring their performance in the collection of solid wastes. This was due to failure of the City to establish adequte policies and procedures on selection of contractors to ensure that the most qualified contractors were selected. Moreover, the performance of selected contractors were not properly monitored due to absence of adequate performance indicators/standards to gauge their efficiency. As a result, the City was not able to institute measures to attain its objective of maintaining the entire City clean as manifested in the complaints received by the Action Line Unit of the City.

The team also noted that while the contract cost under the package deal scheme will greatly depend on the estimated solid wastes generation, the City has not established methodology in calculating solid wastes generation by source. The City's estimate was also found higher than the estimates calculated by the team using the JICA formula. This raises concerns on the accuracy of the estimated figure which was used as basis of contracting costs. The reasonableness of the contract cost is therefore at stake.

The less than satisfactory performance of the City on SWM operation can also be attributed to its failure to establish SWM Board to oversee and coordinate the implementation of the SWM operation.

Considering that SWM is a continuing activity of the City and mishandling of this function would have a great impact on the environment and health of the citizens, the city should seriously consider addressing these concerns.

MANAGEMENT'S REACTIONS TO AUDIT OBSERVATIONS

The results of the audit were discussed with the concerned officials and employees of the City in an exit conference conducted on October 28, 2002. Their comments were incorporated in the report where appropriate.