In its latest audit report, the Commission on Audit (CoA) has found that the P961,550,000.00 infrastructure projects for the repair and rehabilitation of roads and bridges in Negros Oriental are illegal.
As a consequence of its audit findings, the CoA has recommended that the provincial government:
1. Stop all on-going projects under implementation pursuant to the awarded contracts amounting to P955,122,944.12;
2. Comply with the Notices of Disallowances (N.D.) which the CoA had issued in 2012 (ND Nos. 2012-139(100) to 2012-149-100(12) of P143,268,441.59;
3. Henceforth, not to make further payments on all contracts relating to the projects of P955,122,944.12.
It can be recalled that in June 2012 Department of Budget ordered the release of P961,550,000.00 from the national calamity funds to for road and bridge repairs in Negros Oriental.
Fifty percent, or P480,775,000.00 was deposited to the account of the Province.
However the order for the release of the funds was withdrawn and the governor was ordered to return to the national treasury the fifty percent that had been deposited, or P480,775,000.00.
The governor did not return the money and instead proceed with the awarding of contracts for eleven projects, to contractors most of whom are based in Albay.
All the P480,775,000.00 has already been wiped out, or disbursed save for P3,101.42.
With the finding that the contracts entered into by the provincial government are illegal, there is no more basis to continue with the projects.
The problem is that the money has been disbursed already, and there is even a supposed report of “partial accomplishments:.
As early as November 29, 2012, the CoA had already issued notice of disallowance on the payments under the illegal contracts.
The CoA has explained that a Notice of Disallowance is a written notice issued to the heady of agency, in this case the governor, and concerned officers when a transaction is disallowed in audit for being illegal.
The audit disallowance shall be settled by the persons liable through payment or restitution, or by any modes of extinguishment of obligations under the law.
A notice of disallowance is subject to an appeal process in case a person is aggrieved by a notice of disallowance.
In ruling the construction contracts to be illegal, the CoA said that since the Special Allotment Release Order (SARO) issued on June 5, 2012 by the Department of Budget and Management in the amount of P961,550,000.00, was subsequently withdraw on June 29, 2012 through the issuance of a “Negative-SARO”, “there was no longer any allotment to cover the contracts”.
“Thus, the contracts awarded thereafter, were null and void, and consequently, payment of advances to contractors, and subsequent project billings were illegal,” the CoA said.
However, two of the CoA recommendations can no longer be enforced.
There is nothing to stop as the projects had long been performed.
No payments can be stopped also, as recommended by the CoA, as the payments had long been disbursed and virtually wiped out.
If there is a payment that needs to be stopped, it is the remaining P3,101.42, the money left out of the P480,775,000.00 released by the national government to the provincial government.