MMDA pays contractor P7M based on fake COA document

MANILA, Philippines – Emerson Carlos, former Metropolitan Manila Development Authority (MMDA) chair, along with two other MMDA officials, faces an investigation by the Office of the Ombudsman with regards to an alleged P6.99 million payment for steel pedestrian bridges. The payment was given in 2016 to a private contractor using fake documents from the Commission on Audit (COA). 

The two other officials implicated are MMDA assistant general manager for finance and administration Edenison Fainsan, and chief accountant Ruth Diaz. Also held liable is trader William L. Tan, president of William L. Tan Construction (WLTC).

Budget Division head Geraldine de Chavez was cleared of liability as the COA said she had no direct participation in assuring the payment complied with the law.

In March 24, 2004, WLTC won the bid for a P199.8 million contract to design and build 15 steel pedestrian bridges. 

Based on its claimed work accomplishment, WLTC billed the MMDA P196.29 million. The MMDA paid P181.38 million, and withheld the remaining P9.05 million as retention money. They also deducated P5.86 million as liquidated damages for delayed completion of some structures.

Upon post-audit, a Notice of Suspension was issued against the payments after COA noted inadequate support documents for the liquidations. A Notice of Disallowance was then issued.

Appeals filed by the MMDA, plus the subsequent submission of the missing documents, resulted in the reduction of the disallowed amount to just P37.25 million – 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 in the mail a COA order dated February 10, 2016 that supposedly reversed the earlier affirmation of the disallowance and directed the release of P45.39 million to “William L. Tan Construction and Development Corporation.” 

The document was allegedly signed by the COA chair’s chief executive staff, and certified by a COA director.

Diaz, however, held the processing of the payment pending submission of other supporting documents, which she then received on May 18, 2016 from Faisen with “Certified True Copy” stamps.

A check worth P6,989,248.92 was then released to WLTC on June 1, 2016.

In a memorandum dated June 23, 2016, however, 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 check. An internal investigation was also launched to find the source of the fake document.

Carlos and Diaz invoked diligence in the performance of their duties and claimed good faith regarding the validity of the document, but the COA dismissed these appeals. Carlos, according to the COA, should know that a decision is reversed or modified only by another decision or resolution and not by an ordinary order. 

“Clearly, his failure to exercise due diligence in the performance of his duty makes him liable for the disallowance,” the Commission Proper said.

Diaz was in turn faulted for negligence in certifying the forged documents.

“While she may not be expected to distinguish a genuine document from a spurious one, she should have required the submission of a copy of the ‘COA En Banc Decision’ being referred to in the order,” the COA pointed out. – Rappler.com