Eleven years after it ceased operation in 2001 and even if it did not operate for 100 years, the defunct Manila Gas Corporation (MGC) still celebrated its “centennial” in 2012 and purchased 25 watches as tokens during the celebration.
During its “centennial” anniversary on Sept. 9, 2012, MGC purchased 25 Skagen Titanium Tin watches as tokens to select officers, staff, and shareholders.
In affirming the notice of disallowance on the use of P203,140 for the purchase of the watches, the Commission on Audit (COA) said the purchase was "unnecessary and unconscionable" given that MGC ceased operation in 2001.
"MGC did not reach 100 years when it ceased operations on Dec. 1, 2001. Hence, there was nothing to commemorate," the COA said.
It pointed out that it was "inappropriate" for MGC to celebrate an anniversary when it has already been inoperative for more than 10 years. As of April 2012, the MGC has been advised only to proceed with its dissolution, it said.
"Disbursement of funds for extravagance or indulgence, more so granted three days before an agency ceases to exist, is unwarranted. It is an unnecessary and irregular expenditure that should be disallowed," the COA stressed.
It affirmed the Notice of Disallowance (ND) No. MGC 2013-001 issued on Nov. 21, 2013 on the purchase of the wrist watches as centennial anniversary tokens and said that "the recipients shall be liable to refund to the extent of the equivalent value of the Skagen watches at the time of their purchase."
Since 12 of the 25 recipients of the watches were unidentified, COA directed its audit team leader and supervising auditor of MGC to determine liability.
Named liable under the ND were then MGC president and board of directors member Saturnino H. Mejia, accountant Elenita Paracale, treasurer and board member Rhoel Z. Mabazza, corporate secretary and lawyer B.I.J. F. Rabuco, chairman of the board Ma. Lourdes F. Rebueno, and board members Lilia L. Arce and Miguel C. Malvar. COA said they approved the payment for the watches and certified the availability of funds for the purchase.
Meanwhile, COA said that National Development Corporation (NDC) department manager of finance and administration Josephine Lopez, MGC consultants Raquel Sim and Marita Reyes, and stockholders Santiago Alvarez, Gonzalo Bengson, and Mina Gabor were held liable for receiving the watches.
The MGC appealed the ND before the cluster director of the COA Corporate Government Sector (CGS)-Cluster 4 on May 21, 2014 and defended the legality of the disbursement.
The appeal stated that while MGC’s corporate life was no longer extended, the giving of commemorative giveaways was still "warranted" given the "invaluable contribution" rendered by the directors, officers, staff, and shareholders.
It said that MGC acted in good faith, and all the approving and certifying officers applied reasonable care in the performance of their duties.
But COA disagreed. It said: "Clearly, the solidary liability of the approving and certifying officers is up to the extent of the disallowed amount as it was not proven that they acted in good faith and it was grossly negligent for the officers to procure tokens for their anniversary when there is no anniversary to celebrate in the first place.”
As a government owned and controlled corporation (GOCC), MGC was then tasked to manufacture, produce, buy, sell, supply, distribute, dispose of, and deal in gas, coke, tar pit, and all other residual products resulting from the manufacture of gas for fuel, heat, light, power, and other purposes.