The Commission on Audit (COA) issued a Notice of Suspension for the P3-billion joint venture between the Land Transportation Office (LTO) and German IT firm Dermalog, citing concerns over the legality and propriety of the Land Transportation Management System (LTMS).
The COA submitted the letter regarding the suspension, dated February 26, 2025.
“Please be informed that, as confirmed by the COA Audit Team assigned at the LTO, an NS (Notice of Suspension) was indeed issued in connection with the project in question. Under the COA Rules and Regulations on Settlement of Accounts, an NS is issued for transactions that raise doubts about their legality, propriety, or regularity, which may result in financial loss to the government,” the COA stated.
The state auditor issued the Notice of Suspension after the LTO failed to respond to state auditors’ inquiries in May and November 2024 regarding the LTMS project.
The COA clarified that once a Notice of Suspension is issued, the concerned parties are given a reasonable period to fulfill the necessary requirements outlined in the notice.
“To lift the suspension, the parties must submit the necessary justification, explanation, or documentation, and demonstrate to the Auditor that the transaction is lawful and proper and does not cause any financial loss to the government. If the parties fail to do so, the transaction will be disallowed in the audit,” the COA added.
The state auditor clarified that a Notice of Suspension is not a final ruling. To avoid any prejudice, it refrained from disclosing the specific details of the notice issued to the LTO-Dermalog joint venture for the LTMS project.
“The issuance of an NS is not regarded as a final audit disposition. Disclosing information at this stage of the audit could prematurely subject parties to public scrutiny before relevant facts are gathered,” the COA explained.
“Thus, while we recognize the public’s right to information on matters of public interest and transactions, we are precluded, in the meantime, from furnishing you with a copy of the NS. Rest assured that the Commission is doing its best to address the concerns of the public,” the COA concluded.
