Binays told: Settle P2.2B spent on building

State auditors have ordered former Vice President and Makati Mayor Jejomar Binay Sr.; his son and successor, Jejomar Erwin Binay Jr.; and other city officials to “settle” with the government the P2.292 billion spent on the controversial Makati City Hall Building II.

The Commission on Audit (COA) Special Services Sector’s Fraud Audit Office (FAO) earlier issued two notices of disallowance (NDs) dated March 15.

These covered the P2.28 billion paid to Hilmarc’s Construction Corp. for the five phases of the building’s construction and the P11.97 million paid to MANA Architecture and Interior Design Co. for the building’s design.

The orders, however, will not immediately take effect
because the people liable under the two NDs have up to six months to submit an appeal to the FAO director and then to the three-man commission proper.

The notices signed by State Auditor Filomena Ilagan and Director Chona Labrague echoed the findings of the Senate blue ribbon committee and the Office of the Ombudsman which is currently pursuing graft and falsification charges against the Binays in the Sandiganbayan.

Numerous irregularities

In the case of Hilmarc’s, auditors said the building’s five phases of construction showed “irregularities from budgeting to procurement to execution.”

To begin with, all five contracts were not even covered in the annual procurement plan in violation of Section 7, Article II of the Government Procurement Reform Act.

The supplemental budget ordinances for the project were likewise approved in November 2007 and July 2008 without available funds, contrary to Section 321 of the Local Government Code, the COA said.

It added that the awarding of the contracts to Hilmarc’s was “not an outcome of actual competitive bidding” because fake bid invitations were used.

Also questioned was the upgrade of the project to an 11-story building worth P2.28 billion, from the original nine-story building worth P283.197 million, without the corresponding plan and approved budget for the contract.

During the construction stage, Hilmarc’s billings were not duly supported by the necessary documents, the state
auditors said.

On top of this, the COA found out that Hilmarc’s Construction Corp. reported a 100-percent accomplishment rate even though the projects were still under way.

All in all, 57 individuals were held liable under the notice of disallowance covering payments to Hilmarc’s.

Liable city officials

They included former Vice Mayor Ernesto Mercado, Hilmarc’s president Efren Canlas, 14 city councilors, bids and awards committee chair Marjorie de Veyra, general services office chief Mario Hechanova, city administrator Eleno Mendoza, legal officer Pio Kenneth Dasal, city budget officer Lorenza Amores, city planning and development officer Merlina Panganiban, city treasurer Nelia Barlis, officer in charge city engineer Mario Badillo, and three city accountants.

Similar to Hilmarc’s deals, the COA also questioned the MANA contract for lacking corresponding appropriation and for being done through “simulated bidding as evidenced by the presence of fictitious bidders and dubious bidding documents.”

It also noted that MANA had no track record and was barely 4 months old when it was awarded the architectural and engineering services contract.

The payments to MANA — made in five tranches from April 2008 to November 2013 — were not supported with proof of accomplishment, the COA said.

Binays’ camp airs side

A total of 14 persons led by the Binays, as well as MANA as the corporate entity, were held liable under the second notice of disallowance.

Sought for comment, the Binays’ spokesperson, Joey Salgado, said the projects had been subjected to a previous COA audit that did not come up with adverse findings. He said the issuance of the NDs were “belated but not surprising.”

“The COA only started singing a different tune—in effect questioning the competence of its own people—when the previous administration began its political demolition work on former Vice President Binay and his family,” he told the Inquirer.

Salgado said that the COA violated its own rules, COA Memorandum No. 2015-007 dated April 16, 2015, when it released to the Ombudsman its fraud audit findings before it issued the notices of disallowance. —With a report from Dexter Cabalza