THE Commission on Audit has ordered the Laoag City government to pay the compensation claim of a contractor-supplier amounting to P1.7 million pertaining to the delivery of various appliances, sports equipment, and closed-circuit television (CCTV) and information technology (IT) tools in 2017 and 2018.
Trader Nelson Ocampo of NCO General Merchandise filed the claim before the COA after several attempts to collect payment proved fruitless although the Office of the City Accountant acknowledged the obligation by issuing a certificate of non-payment.
Incumbent city Mayor Michael Marcos Keon opposed the claim and sought its dismissal on the ground that the transactions were entered into by the previous administration and involved improper utilization of the Aid to Barangays Fund.
He pointed out that the Fund is a lump sum appropriation that requires a special clearance from the Sangguniang Panlungsod before it can be used.
The purchase subject of the claim was among expense items flagged in the audit as “irregular/illegal” based on the Audit Observation Memorandum (AOM) No. 2019-031 issued by the audit team on March 20, 2019 specifically for the absence of prior authorization from the city council.
While agreeing that former city officials behind the procurement deal could face administrative and civil indictment for violations of RA 7160 or the Local Government Code, the audit team leader recommended the grant of the supplier’s claim.
In its decision, the COA Commission Proper upheld the findings in the AOM on the improper use of the Aid to Barangays Fund due to a lack of special appropriation.
“However, jurisprudence teaches that parties whose claims may have been rendered infirm, on account of falling short of legal requirements, may nonetheless be allowed to recover the reasonable value of the thing or services rendered,” the Commission said.
COA chairperson Gamaliel A. Cordoba and commissioners Roland Café Pondoc and Mario G. Lipana said the fault in the use of public funds was not attributable in any way to the supplier, who submitted all the required support documents to prove that it performed its part in the contract.
“The auditors did not report any irregularity in the procurements other than the absence of special appropriations and the necessary authority to enter into a contract. Further, this Commission notes that the absence of said requirements was not the fault but was beyond the control of the claimant, who merely acted and complied in good faith,” the COA pointed out.
The COA clarified that the grant of the claim does not preclude the filing of “any civil, criminal, and administrative action” against erring former city officials.
