THE Commission on Audit (COA) has approved a P2.3 million compensation claim filed by a private supplier against the city government of Laoag for the delivery of appliances, sports and office equipment, supplies and furniture in 2017 and 2018.
However, the COA also ordered the Prosecution and Litigation Office to refer all records of the transaction to the Office of the Ombudsman for investigation and filing of charges against persons liable if warranted.
Based on the petition filed by Joshua and Caleb General Merchandise, the city made various purchases totaling P2,296,096 between December 29, 2017 and November 16, 2018.
The deliveries were inspected and accepted by the requisitioning office and the City General Services Office as shown by inspection and acceptance reports submitted by the supplier.
However, the city government failed to release payments despite several demand letters.
Instead, the Office of the City Accountant issued a certification dated September 26, 2019 stating that the outstanding balances under the account of the supplier were not yet paid.
The trader said the goods supplied were already used, consumed, or utilized by the city, hence no longer recoverable.
In its answer to the petition, the city government acknowledged the transactions between it and the supplier but clarified that these were made during the previous administration.
However, it said payment was not processed in compliance with the recommendation of the audit team leader and the supervising auditor in light of findings that the contracts were covered by lump sum appropriations intended for Aid to Barangays which is a separate project.
Auditors said the fund utilization lacked prior authority from the Sangguniang Panlungsod, thus irregular and illegal.
In its ruling, the COA CP said the supplier is entitled to payment in full as its claim was duly supported by the required documentation.
“This defect in the contract entered into by the local chief executive is not attributable to the claimant. Hence, the money claim should be granted. Moreover, the city benefited from the aforementioned deliveries. Payment should be allowed since it is a valid obligation of the city, non-payment of which would result in unjust enrichment on the part of the city,” the commission pointed out.
However, noting the “irregularity of the transactions,” it said the case would be referred to the Office of the Ombudsman for the conduct of proper investigation.
