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COA invalidates audit and notices of disallowance for P2.3B on payments for Makati City Hall Parking Building II
COA invalidates audit and notices of disallowance for P2.3B on payments for Makati City Hall Parking Building II
The Commission on Audit (COA) has invalidated the audit conducted by its Fraud Audit Office (COA-FAO) which issued notices of disallowance (NDS) on the payments for the engineering and architectural services and the construction of the Makati City Hall Parking Building II from 2008 to 2013.
With its ruling that granted the appeal of former Makati City mayor Jejomar Erwin S. Binay Jr., COA lifted the NDs issued in 2018 on the payments to Hilmarc's Construction Corporation (HCC) and MANA Architecture and Interior Design Co. for the construction and architectural and engineering (A&E) services for the MCHPB II in the amounts of P2,280,089,780.94 and P11,974,900, respectively.
It its decision denominated as No. 2023-087, COA ruled:
“Thus, in view of the violation of the appellants’ (Binay Jr. and his group) constitutional right to due process of law, the special audit is hereby declared invalid. Thus, ND Nos. 2018-002 and 2018-003, which arose from the special audit are hereby lifted. Foregoing considered, it is no longer necessary to discuss the other issues raised in the consolidated appeals.
"Wherefore, the special audit conducted by the audit team created under COA Office Order Nos. 2014-559 and 2014-559-A dated Sept. 12, 2014 and Jan. 29, 2015, respectively, are hereby declared invalid and ineffectual. Accordingly, the COA Fraud Audit Office Special Audit Notice of Disallowance Nos. 2018-002 and 2018-003, both dated March 15, 2018, are hereby lifted.”
The COA decision, which was promulgated on July 27, 2023, was issued by Chairperson Gamaliel A. Cordoba and Commissioner Mario G. Lipana.
On denial of due process, COA said that its Special Audit Team (SAT) have to abide by COA Circular No. 2009-006, which provides that "the ND issued shall be transmitted by the Cluster Director of the Office that conducted the special audit to the agency head and the accountant through the Auditor of the agency audited and the concerned Cluster/Regional Director, together with the special audit report."
In this case, COA said that the SAT admitted that it did not preliminarily discuss the disallowance with the resident auditors and Technical Audit Specialist (TAS) and it did not request their written comments regarding its findings, which were violations of COA Circular No. 2009-006.
Having overlooked this "substantive procedure," the COA said that this violated the appellant's constitutional right to due process of law and the audit should then be declared as invalid.
Makati City government entered into a contract with MANA through negotiated procurement for architecture and engineering services with a contract cost of P11,974,900. In Dec. 2007, the bidding for Phase I of the construction of MCHPB II proceeded and was awarded to HCC. Its Phase II followed, then Phases III to V which were also awarded to HCC.
Former COA Chairperson Ma. Gracia Pulido-Tan made a request to former Ombudsman Conchita Carpio-Morales to conduct a special audit on the construction of MCHPB II on Aug. 26, 2014.
A SAT was formed and after its audit, two NDs were issued.