The Commission on Audit has ordered the provincial government of Iloilo to settle its financial obligations to a medical supply firm that delivered P2.37 million worth of medicines and equipment but has not been paid for over four years now.
In a decision issued recently, the COA-Commission Proper (CP) ruled that the provincial government must pay for the medicines it consumed and medical equipment it utilized, stressing that non-payment would “constitute unjust enrichment on the part of the province.”
However, COA Chairman Michael Aguinaldo and Commissioner Roland Pondoc reduced the amount sought to be collected by Endure Medical Inc. from P2,372,427 to P1,849,131.24.
The reduced amount was due to the deficiencies that the audit team leader found from the transactions that took place in 2015 to 2016.
The EMI sought COA’s intercession after the provincial government, then headed by Gov. Arthur Defensor Sr., failed to settle its financial obligation for the purchase of medical supplies and equipment that were distributed to various hospitals in the province.
Chiefs of the Jesus M. Colmenares District Hospital, Federico Ramon Tirador Sr. Memorial District Hospital, Barotac Viejo District Hospital, and Iloilo Provincial Hospital confirmed they they received the supplies and equipment.
The provincial government also admitted that it entered into various contracts with EMI for the procurement of needs of the four hospitals.
However, payment was withheld because the deliveries “were not taken up as acounts payable” for 2015 and 2016 while the appropriations ordinance covering payment “was declared inoperative,” COA documents showed.
Responding to the complaint, the provincial government, now headed by Gov. Arthur Defensor Jr., said it is willing to settle its obligation.
In its ruling, the COA-CP cited the doctrine of “quantum meruit” in a Court of Appeals ruling, saying that undue enrichment on the part of the province should be based on the “equitable postulate that it is unjust for a person to retain benefit without paying for it.”
“In several cases, the Supreme Court has recognized the right of contractors to be reimbursed for services actually rendered under the principle of quantum meruit where a private contractor undertakes government projects not in strict compliance with law and regulations,” said the COA-CP.
The audit panel added: “Quantum meruit means that in an aciton for work and labor, payment shall be made in such amount as the plaintiff reasonably deserves.”