Commission on Audit

COA orders Laoag City government to pay supplier’s P1.7-M claim

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COA orders Laoag City government to pay supplier’s P1.7-M claim

COA. The Commission on Audit in Commonwealth Avenue, Quezon City, on October 2, 2018.


The Commission on Audit says the grant of the supplier's claim does not preclude the filing of 'civil, criminal, and administrative action' against former city officials involved in the procurement

MANILA, Philippines – The Commission on Audit (COA) has ordered the Laoag City government to pay the P1.7-million claim of a supplier for the delivery of appliances, sports equipment, closed-circuit television, and information technology tools in 2017 and 2018.

The compensation claim was filed by Nelson Ocampo of NCO General Merchandise, after repeated failed attempts to collect from the Laoag city government, even though the Office of the City Accountant acknowledged the obligation through a certificate of non-payment.

Laoag Mayor Michael Marcos Keon had sought the dismissal of the claim, saying it was entered into by the previous administration and involved the improper use of the Aid to Barangays Fund, which requires special clearance from the city council prior to use.

The concerned procurement is among the expense items that had been flagged as “irregular/illegal” based on Audit Observation Memorandum (AOM) No. 2019-031 issued by the audit team on March 20, 2019. It also cited the fund’s use despite lack of prior authorization from the city council.

While the audit team leader agreed that former city officials behind the procurement could face administrative and civil complaints for violations of Republic Act 7160 or the Local Government Code, the team leader also recommended payment of the supplier’s claim.

The COA Commission Proper upheld the AOM findings on the improper use of the Aid to Barangays Fund.

“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,” COA said.

COA chairperson Gamaliel Cordoba and commissioners Roland Café Pondoc and Mario Lipana cited the auditors’ finding that the improper use of the fund was not attributable to the supplier, who had submitted documents to support that they had done their part as provided under 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,” COA said.

COA also clarified that the claim grant does not preclude the filing of “any civil, criminal, and administrative action” against former city officials involved in the procurement. –

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