Fake COA order fools MMDA, P7M paid to contractor

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    FORMER Metropolitan Manila Development Authority (MMDA) chairman Emerson Carlos is facing an investigation by the Office of the Ombudsman, along with two other ranking officials of the agency, over the alleged payment of P6.99 million to a private contractor in 2016 using a fake order from the Commission on Audit.

    COA Chairman Michael G. Aguinaldo and Commissioners Jose A. Fabia and Roland C. Pondoc, in a seven-page decision dated January 10, 2020, directed the Prosecution and Litigation Office-Legal Services Sector to forward all records of the transaction to the Ombudsman for review by investigators and filing of charges if warranted.

    Carlos was held jointly liable for the disallowed amount together with former MMDA assistant general manager for Finance and Administration Edenison F. Fainsan, chief accountant Ruth C. Diaz and trader William L. Tan, president of William L. Tan Construction (WLTC).

    Budget Division head Geraldine A. de Chavez was cleared of any liability in relation for the fund release as the COA noted that she had no direct participation in the determination that the payment was proper and compliant with the requirements of law.

    Records showed that on March 24, 2004, the WLTC was named the winning bidder by then MMDA chairman Bayani L. Fernando for the P199.8 million contract to design and build 15 steel pedestrian bridges.

    The notice to proceed was issued on the same day, giving the contractor 120 days or until July 23, 2004 to complete all 15 steel footbridges.

    According to its claimed work accomplishment, WLTC billed MMDA P196.29 million. The MMDA paid the contractor P181.38 million, withholding the balance of P9.05 million as retention money and deducting P5.86 million as liquidated damages for delayed completion of some of the structures.

    Upon post-audit a notice of suspension was issued against the payments released after the audit team noted inadequate support documents in the project liquidations. This later led to the issuance of a notice of disallowance.

    Appeals filed by the MMDA as well as subsequent submission of the required documents resulted in the reduction of the disallowed amount to just P37.25 million consisting of P18.15 million as liquidated damages and P19.1 million as contract variance.

    Further deducting the earlier retention money and the liquidated damage in the total amount of P14.91 million, the COA said only P22.34 million was left for those held liable to refund to the government.

    On April 28, 2016, Fainsan received through registered mail an order from the COA dated February 10, 2016 that supposedly reversed the earlier decision affirming the disallowance and directing release of payment to “William L. Tan Construction and Development Corporation” in the sum of P45.39 million.

    The document was supposedly signed by the COA chairman’s chief executive staff and certified by a COA director.

    Diaz, however, suspended the processing of the payment pending submission of other supporting documents for the release of the retention money. She received these on May 18, 2016 stamped “Certified true Copy” from Faisan.

    A check in the amount of P6,989,248.92 was released to WLTC on June 1, 2016.

    However, in a memorandum dated June 23, 2016, the COA notified its supervising auditor that no such order was issued from the office of the chairman, followed by the issuance of a notice of disallowance for the issuance of the P6.99 million check in favor of WLTC.

    The COA also launched an internal investigation on the source of the fake order.

    Carlos and Diaz appealed, invoking diligence in the performance of their duties and claiming good faith in relying on the validity of the spurious order on which the payment was based.