COA’S observation report, Infra projects lack signature

CEBU, Philippines - Over P400 million worth of infrastructure projects in Cebu City were implemented allegedly without signature from the city accountant, making the projects “null and void,” the Commission on Audit said.

In its audit observation memorandum, COA said there were over 50 contracts for infrastructure projects that were considered “legally impaired” because the agreements were “perfected and entered into without the required signature of the City Accountant as witness.”

The projects include the reconstruction of Carbon Market II in Barangay Ermita worth P167.3 million; construction of a four-storey 28-classroom school building in Barangay Pahina Central, P21.1 million; construction of riprap and grouted riprap for seawall in Barangay Inayawan, P27.9 million; clearing and embankment of BRT route at the South Road Properties, P50.4 million; channel improvement of Basak San Nicolas Creek, P10 million; among others.

The infrastructure projects worth P420.05 million were charged against different accounts, such as the 2011 and 2012 Annual Investment Plan, 2009 Supplemental Budget-8, 2010 SB-5, 2011 calamity fund, 2011 SB-1, trust fund proper, and 2012 annual budget.

City Accountant and lawyer Mark Rossel Salomon insisted, though, that the transactions were “legally” conducted contrary to COA’s observation report.

 However, State Auditor and audit team leader Ma. Daisy Bercede contended that the city government violated Section 86 of the Presidential Decree 1445 and Section 1 of Letter of Instruction No. 968 dated December 17, 1979, stating that “chief accountant of the contracting agency shall sign such contracts as witness and contracts without such witness shall be considered null and void.”

PD 1445 also states “no contract involving the expenditures of public funds by any government agency shall be entered into or authorized unless the proper accounting officials of the agency concerned shall have certified to the officer entering into the obligation that funds have been duly appropriated for the purpose and the amount necessary to cover the proposed contract for the current year is available for expenditures. “

Salomon, however, argued that the laws cited by COA contradict Section 344 of the Local Government Code, requiring the local government unit’s treasurer to sign the contracts.

The law provides that, “no money shall be disbursed unless the local budget officer certifies the existence of appropriation that has been legally made for the purpose, the local accountant has obligated said appropriation, and the local treasurer certifies to the availability of funds for the purpose.”

Being in conflict with the letter of instruction, Salomon stressed that the explicit provision of RA 7160 prevails.

“Atong tumanon ang latest nga balaod. Mas mo-prevail ang RA 7160 than an administrative order so the letter of instruction no. 968 must yield to RA 760. Which means valid g’yod ang contracts,” he said.

Moreover, if COA proves that the transactions were unauthorized, then either the city or the contractors or both would be civilly liable.

Article 1412 Chapter 9 of the Civil Code of the Philippines stipulates that when the fault is on the part of both contracting parties, neither may recover what he has given by virtue of the contract, or demand the performance of the other’s undertaking;

But, when only one of the contracting parties is at fault, he cannot recover what he has given by reason of the contract, or ask for the fulfillment of what has been promised him.

The other, who is not at fault, may demand the return of what he has given without any obligation to comply with his promise. — (FREEMAN)