DECISION NO.

2021-107
March 1, 2021

Subject: Appeal of Mr. Boyd Jacinto P. Bahan, Engineer III, City Government of Butuan,
Agusan del Norte, from Special Audit Supplemental Notice of Disallowance No. 2011-
05-04(2010)-A dated October 3, 2014, on the payment for the construction of the
City’s Sangguniang Panlungsod Session Hall and Main Building, in the amount of
P45,654,578.79

DECISION

FACTS OF THE CASE

1
Before this Commission is the Appeal Memorandum of Mr. Boyd Jacinto P. Bahan, Engineer III, City Government of
Butuan, Agusan del Norte, from Special Audit Supplemental Notice of Disallowance (ND) No. 2011-05-04(2010)-A dated October
3, 2014, on the payment for the construction of the City’s Sangguniang Panlungsod Session Hall and Main Building (SHMB), in
the amount of P45,654,578.79.

Appellant Bahan received a copy of Supplemental ND No. 2011-05-04(2010)-A on December 9, 2014 2 and filed his appeal
on June 8, 2015.3 or after 179 days from receipt of the ND; hence, within the period allowed by the rules to file an appeal.

The City Government of Butuan paid Dasta Builders in March to June 2010 the total amount of P45,654,578.79, for the
construction of the City’s Sangguniang Panlungsod SHMB, covered by the following checks:

Check No. Date of Check Particulars Net Amount

124917 March 5, 2010 15% Mobilization fee P26,669,471.19

125215 April 26, 2010 1st Partial payment 12,563,302.12

125218 April 30, 2010 Partial payment on 2nd billing 2,824,627.19
125439 June 9, 2010 Payment of balance of the 2nd billing 3,453,046.70
125440 June 9, 2010 Business tax 144,131.59
Total P45,654,578.79

Pursuant to Commission on Audit (COA) Office Order No. 2010-665 dated October 7, 2010, a special audit team (SAT),
from the Fraud Audit Office (FAO), Special Services Sector (SSS), this Commission, conducted a special audit/ investigation of
the above payments.

The SAT disallowed the entire amount of P45,654,578.79 under ND No. 2011-05-04-(2010) 4 dated May 4, 2011 due to
non-compliance by the Bids and Awards Committee (BAC) with Section 21.2.1 5 of the Revised Implementing Rules and
Regulations (RIRR) of Republic Act (RA) No. 9184 6 and for grave abuse of discretion committed by the BAC when it awarded the
project to Dasta Builders. Engr. Bahan was not named as a person liable under the said ND.

Thereafter, upon verification/re-evaluation of the Statement of Accomplishment (SOA) dated September 17, 2010
submitted by the City vis-à-vis the actual accomplishments, the SAT issued Supplemental ND No. No. 2011-05-04-(2010)-A. 7 The
disallowance is based on additional grounds/findings, during project implementation, wherein Engr. Bahan, among others, was
held liable for preparing and certifying the SOAs8 as true and correct based on the Consolidated Inspection Reports (CIRs)9 in the
amount of P26,856,715.45 only, a portion of the disallowed amount in the original ND No. 2011-05-04-(2010), computed as
follows:10

Additional Grounds for Disallowance Amount

Overstated report accomplishments and/or under delivery of items of works P 4,028,856.81

Additional work/accomplishment without an approved variation/change order as
212,147.07
required under the RIRR of RA No. 9184
Unrecouped mobilization fees 22,615,711.57

Total P26,856,715.45

Engr. Bahan appealed the Supplemental ND, raising the following issues:

1. He acted in all honesty and good faith in preparing and certifying the SOAs and CIRs because he merely relied
on all available documents collated and submitted to him by his subordinates at that time. Thus, he is entitled to
the presumption of good faith in the discharge of official duties that in the absence of any proof, he should not
be charged with personal liability for damages that may result from the performance of an official duty; and

2. The translated discrepancies are justifiable, and may be thoroughly explained and threshed out as soon as all
pertinent documents become available. Moreover, the full amount reflected in the SOA dated September 17,
2010 was never released to the contractor.

In the Answer 11 dated November 10, 2016, the ATL, SAT, recommended the denial of the appeal and maintained that the
liability of Engr. Bahan should be affirmed, because his certifications in the SOAs resulted to the overpayment for the
construction of SHMB. However, the ATL clarified that the solidary liability of Engr. Bahan in the disallowed transaction is only
construction of SHMB. However, the ATL clarified that the solidary liability of Engr. Bahan in the disallowed transaction is only
to the extent of P4,016,962.72,12 computed as follows:

Particular Amount
Total Payment for Accomplishment as of April 27, 2010 P27,025,064.16
COA’s re-computation of accomplishment based on inspection 23,008,101.44
Difference/Extent of Engr. Bahan’s liability P 4,016,962.72

ISSUE

The issue to be resolved is whether or not the appeal of Mr. Bahan is meritorious.

DISCUSSION

This Commission rules in the negative.

The SAT issued the Supplemental ND based on discrepancies in the actual accomplishments vis-à-vis the SOAs. Apellant
Bahan was held liable for certifying the truthfulness and correctness of the SOAs13 based on the CIRs.14

The grounds relied upon by the SAT in the issuance of the Supplemental ND are based on factual findings obtained during
the audit and verification/validation of the SOAs and CIRs submitted by the city for the infrastructure projects. In the absence of
15
contrary evidence, factual findings should be afforded great weight, even finality. In the case of Lumayna vs. COA, citing
16
Ocampo vs. Commission on Elections, the Supreme Court (SC) elucidated, thus:

At the outset, it must be stressed that factual findings of administrative bodies charged with their specific field of
expertise, are afforded great weight by the courts, and in the absence of substantial showing that such findings
were made from an erroneous estimation of the evidence presented, they are conclusive, and in the interest of
stability of the governmental structure, should not be disturbed.

The appellant failed to present evidence to controvert the findings of overpayment for the project accomplishments. He
merely claimed that the discrepancies could be explained as soon as all documents become available. Thus, this Commission
affirms the Supplemental ND. However, Engr. Bahan should be held solidarily liable to the extent of P4,016,962.72 17 only for
certifying the correctness of the SOAs dated March 31, 2010 and April 27, 2010. His certification as to the veracity of the SOAs
and CIRs, paved the way for the payment of the projects, and eventually, the overpayment.
18
In this regard, Engr. Bahan is liable pursuant to Section 16 of the 2009 Revised Rules on Settlement of Accounts on the
determination of liability of persons for disallowance, as follows:

16.1 The liability of public officers and other persons for audit disallowances/charges shall be determined on the
basis of (a) the nature of the disallowance/charge; (b) the duties and responsibilities or obligations of
officers/employees concerned; (c) the extent of their participation in the disallowed/charged transaction; and
(d) the amount of damage or loss to the government, thus:

xxx

16.1.2Public officers who certify as to the necessity, legality and availability of funds or
adequacy of documents shall be liable according to their respective certifications. (Underscoring
supplied)
Good faith cannot be appreciated in favor of Engr. Bahan because he was negligent in the performance of his official
duties. The negligence is evident when he did not verify/check the findings of his subordinates.
19
The SC, in the case of Aureo G. Bayaca vs. Judge Tranquilino V. Ramos, rejected the defense of good faith, stating that:

Negligence may be defined as the failure to observe such care as a reasonably prudent and careful person would
use under similar circumstances; it is the doing of some act which a person of ordinary prudence would not have
done or failure to do what a person of ordinary prudence would have done under similar circumstances. It is the
conduct which falls below the standard established by law for the protection of others against unreasonable risk of
harm; a departure from the conduct expected of a reasonably prudent person under like circumstances. (Black’s
Law Dictionary, 930-931, 5 th Ed.) At bottom, it is a test of foreseeability xxx. Likewise, it may be a ground for
administrative liability of a government official or employee. (Re: Report on the Judicial Audit Conducted in the
RTC, Branch 117, Pasay City, A.M. No. 96-5-163-RTC, June 22, 1998).

His argument that he relied on his subordinates in whom he had trust and confidence is unavailing. His duty was not
20
ministerial and the doctrine laid down by the SC in the case of Amado C. Arias vs. Sandiganbayan does not apply. For one, he is
not the head of office or the final approving authority, as there are three more signatories to the SOAs after him. The SC held in
21
the case of Dugayon vs. People of the Philippines, to wit:

Petitioner cannot seek refuge in the cases of xxx and Arias when she relied on the recommendation of her
subordinates. Petitioner is an Assistant Regional Director, not the head of office or the final approving authority
on whom the Arias doctrine is applicable. That is the reason why the Sandiganbayan acquitted Regional Director
xxx, who was the head of office.

RULING
RULING

WHEREFORE, premises considered, the instant appeal is hereby DENIED. Accordingly, Mr. Boyd Jacinto P. Bahan,
Engineer III, City Engineer’s Office, City Government of Butuan, Province of Agusan del Norte, remains solidarily liable under
Special Audit Supplemental Notice of Disallowance No. 2011-05-04(2010)-A dated October 3, 2014 for the amount of
P4,016,962.72 only.

(SGD.) MICHAEL G. AGUINALDO

Chairperson

(SGD.) ROLAND C. PONDOC

Commissioner

Attested by:

(SGD.) NILDA B. PLARAS

Director IV
Commission Secretariat

Copy furnished:

Bacala Udarbe Law Offices

Counsel for the Appellant
2nd Floor Acerado Building
J.C. Aquino Avenue, Butuan City

The Special Audit Team

(COA Office Order No. 2010-665 dated October 7, 2010)
Fraud Audit Office, Special Services Sector

The Directors
Fraud Audit Office, Special Services Sector
Information Technology Office, Systems and Technical Services Sector

The Assistant Commissioners

Local Government Sector
Special Services Sector
Commission Proper Adjudication and Secretariat Support Services Sector

All of this Commission

ESZ/EEL/DVG/MKDG/GAM
CPCN 2016-0752

1 Pursuant to Commission on Audit (COA) Resolution No. 2015-015 dated April 13, 2015 ( Jurisdiction of the COA Commission Proper over Appeals from Notice of
Disallowance/Notice of Charge Issued by the audit teams of the Fraud Audit Office, Special Audit Office, and Intelligence and Confidential Fund Audit Unit).
2 As alleged in the Memorandum of Appeal; rollo, p. 57.
3 Date of stamped receipt by Fraud Audit Office; rollo, p. 58.
4 Rollo, p. 108.
5 21.2.1. Except as otherwise provided in Sections 21.2.2 and 54.2 of this IRR and for the procurement of common-use goods and supplies, the Invitation to Bid/Request
for Expression of Interest shall be:
a) Advertised at least once in one (1) newspaper of general nationwide circulation which has been regularly published for at least two (2) years before the date of
issue of the advertisement;
b) Posted continuously in the PhilGEPS website, the website of the procuring entity concerned, if available, and the website prescribed by the foreign
government/foreign or international financing institution, if applicable, for seven (7) calendar days starting on date of advertisement; and
c) Posted at any conspicuous place reserved for this purpose in the premises of the procuring entity concerned for seven (7) calendar days, if applicable, as
certified by the head of the BAC Secretariat of the procuring entity concerned.
6 Otherwise known as the Government Procurement Reform Act.
7 Rollo, pp. 90-95.
8 Rollo, pp. 34 and 38.
9 Rollo, pp. 36 and 42.
10 As discussed in page 4 of Supplemental Notice of Disallowance; Rollo, p. 92.
11 Rollo, pp. 109-112.
12 As computed by a member of the special audit team of Fraud Audit Office, Special Services Sector, this Commission, rollo, p. 88.
13 Supra, note 8.
14 Supra, note 9.
15 G.R. No. 185001, September 25, 2009.
a class="sdfootnotesym" href="#sdfootnote16anc" name="sdfootnote16sym">16 G.R. No. 136282 and 137470, February 15, 2000.
17 Supra, note 11.
18 As prescribed in COA Circular No. 2009-006 dated September 15, 2009.
19 A.M. No. MTJ-07-1676, January 29, 2009.
20 G.R. No. 81563, December 19, 1989.
21 G.R. No. 147333, August 12, 2014.