COA points to auditor’s error for late disallowance notice on purchase of BGEI property

Former Manila Mayor Lito Atienza. INQUIRER FILE PHOTO

The Commission on Audit (COA) on Monday said its move to disallow the Manila city government’s P34.7-million purchase of Basa-Guidote Enterprises Inc. (BGEI) property in 2001 was 11 years late because of an auditor’s lapse, but the commission stressed that its finding was still valid.

COA Chairperson Gracia Pulido Tan defended the agency’s move, which  former Manila Mayor Lito Atienza interpreted as persecution because he testified for the defense in the impeachment trial of Chief Justice Renato Corona.

The COA issued a notice of disallowance on the deal on March 19, 2012, in the thick of Corona’s trial. BGEI was owned by the family of Cristina Corona, the Chief Justice’s wife who received the payment in trust for the 2001 transaction.

“That a notice of disallowance is issued only after 11 years does not detract from the notice’s validity and integrity,” Tan said in a statement.

She said the COA was just doing its job. “The COA issued the notice of disallowance to the City of Manila on March 19, 2012, for no other reason than it is our duty and mandate.”

Tan said the COA saw the need to issue the notice of disallowance, which should have been done much earlier, when it reviewed files that a defense counsel, Ramon Esguerra, had requested.

She thanked Esguerra for giving the agency the chance “to rectify  previous lapses in our duties.”

The COA chief said a notice of suspension for the BGEI transaction was issued to the city government in 2002.

The notice served as a temporary disallowance and suspended the transaction until the auditee could comply with requirements to legitimize the deal.

The city government has 90 days to comply, according to the COA. If the local government fails to meet the requirements, the suspension lapses into a disallowance and the auditor must issue the notice.

In the BGEI transaction, the Manila city government failed to comply with the requirements within the prescribed period. But the auditor did not issue the corresponding notice informing the city government of the disallowance of the deal.

“We have corrected this inaction by issuing the same. We have, meanwhile, asked the concerned auditor to explain,” Tan said.

But she maintained that the recently issued notice of disallowance was valid.

While the COA has a three-year rule against reopening settled accounts, this does not apply to the BGEI transaction because the latter is considered unsettled, Tan said.

This is so because the transaction was suspended in audit in 2002 and was never settled after all these years because of the city government’s failure to comply with the requirements and conditions stated in the notice of suspension,  Tan said.

“In rectifying the situation through the issuance of the notice of disallowance dated March 19 2012, we have simply discharged our sworn duty. Let it be said that the omission of one auditor should not be taken as the omission of the COA as a whole,” Tan added.