2 ex-mayors ordered to return P29M

CEBU CITY—The Commission on Audit (COA) has ordered two former mayors of Talisay City in southern Cebu province and their 11 department heads and two employees to return P29 million used to fund two projects found tainted with irregularities.

The state auditors said the “Information Technology Project” of former Mayor Eduardo Gullas worth P26.988 million was implemented despite the absence of an ordinance.

The COA also found the 3,333 bottles of liquid fertilizer purchased during the term of former Mayor Socrates Fernandez worth more than P2.3 million was overpriced by more than 500 percent.

The Inquirer tried to reach Gullas and Fernandez for comment but to no avail.

Among the former department heads that needed to pay the two disallowed projects were former city administrator and city legal officer Aurora Econg, city budget officer Edgar Mabunay, general services officer Joan Vebar, city engineer Audie Bacasmas, human resources officer Emely Cabrera, city accountant Viluzminda Villarante, and city treasurer Emma Macuto.

The others were former city registrar Gemma Ladion, city building administrator Ariel Araw-araw, assistant city engineer Gamaliel Vicente and city agriculturist Rene Galado.

Also included in the COA order were Melanie Lavador and Rey Lumapas, staff members at the accounting and engineering departments, as well as the two suppliers—Equipment supplier Powerdev Corp. and Gracias Industries Supplier.

Fernandez succeeded Gullas as mayor in 2004 and retained all the department heads in his administration.

The order to pay up was contained in the Notice of Finality of Decision that was sent to the office of incumbent Mayor Johnny de los Reyes on Aug. 5.

The notice, which was signed by Commission Secretary Nilda Plaras, stemmed from two COA decisions that disallowed the payment of two projects.

One of the decisions was dated April 23, 2012, and the other, Dec. 28, 2012.

The COA created a special audit team to investigate the two projects after it found deficiencies including lack of required documents.

When Gullas was mayor, the city purchased computers and other equipment for its Information Technology Project worth P26.988 million to computerize the transactions in City Hall.

The COA, in its Audit Observation Memorandum (AOM) in 2004, said the project was not backed by an ordinance but by an executive order issued by Gullas, realigning the savings from various items and from the city government’s 20-percent development fund.

Fernandez, who succeeded Gullas in 2004, also issued three executive orders realigning amounts from the city’s general fund and the city’s 20-percent development fund to pay for the project.

COA’s Central Visayas office ordered the suspension of the payments and issued four notices of suspensions, all dated Feb. 27, 2006.

But the state auditors were ignored.

Instead, city legal officer Econg said in a letter dated Sept. 12, 2005, that realignment of funds through an executive order was allowed under the Local Government Code.

The COA disagreed.

“It does not say that the local chief executive may realign through an executive order and that the presiding officer may realign through an ordinance. To say that for the local chief executive an executive order may suffice for the realignment is to add something beyond what the law clearly provides. That would be amending the law.”

In a separate AOM dated Nov. 8, 2006, the COA found that the 3,333 bottles of liquid fertilizer purchased from Manila-based Gracias Industries Supplier was overpriced by more than 500 percent.

Each bottle of liquid fertilizer was bought at P900 when it could be bought at P171 each from a local store, or an overprice of P729.

The COA’s Technical Services Office discovered that the fertilizers were rejected because what was inside the bottles was not in the label.

Still, the city distributed these to the farmers.

The COA also found discrepancy on the two resolutions on Dec. 16, 2005, issued by the bids and awards committee. The first resolution stated that the lowest bidder was Joseph Trading, while the second resolution identified Gracias Trading as the lowest bidder.

The city government appealed the decision, saying the Department of Agriculture should be held liable for the disallowance being the primary implementing agency that provided the funds.

The COA said the city government implemented the project “that included the irregular bidding process.”

“In effect, they became conspirators since they not only allowed the manipulation of the bidding which resulted to the overpriced transaction, they were also the ones who paid the winning bidder,” the COA said.