Case Digest (G.R. No. 90364)
Facts:
Virgilio C. Arriola and Julian L. Fernandez, petitioners, filed a petition for certiorari (G.R. No. 90364) with the Supreme Court En Banc, contesting Commission on Audit (COA) Decision No. 943; the case was promulgated September 30, 1991, with Medialdea, J., writing for the Court. The respondents were the Commission on Audit and the Board of Liquidators.
In October 1985 the (then) National Coal Authority (NCA) invited bids for the Batangas Water Well project; after an initial invalidated bidding and a re-bidding, P.I. Well Drilling Corporation was declared the winning bidder at P277,662.00 but negotiated the contract down to P262,662.00. The contract was approved by NCA authorities and the NCA Administrator wrote the contractor on December 9, 1985 advising acceptance of the P262,662.00 bid. The project was completed on February 14, 1986, and the contract was submitted to COA for post-audit on January 28, 1986.
COA Technical Service Office (COA-TSO) requested a detailed breakdown of contract costs on April 9, 1986; NCA supplied cost estimates. By memorandum dated September 15, 1986, Jose F. Mabanta of COA-TSO found the contract “excessive by 46.94%,” quantifying the discrepancy at P83,914.22 and attributing it to higher unit costs in the agency estimates; the memorandum cited COA Circular No. 86-257. The NCA-assigned auditor demanded refund. COA later reiterated its finding and, after reconsideration by NCA, sustained and even increased its disallowance before the Commission.
COA rendered Decision No. 943 (dated in the record as July 14 — the decision as reported in the record bears July 14) disallowing an amount ultimately reduced in the COA decision to P83,766.60 and holding certain NCA officials, including petitioners Arriola (Deputy Administrator) and Fernandez (Internal Auditor), personally liable; a Certificate of Settlement and Balances (CSB No. 87-0001-42) earlier had demanded settlement of P71,746.66 (after withholding). The Board of Liquidators’ Director/General Manager, Wenceslao M. Buenaventura, furnished copies of COA Decision No. 943 to petitioners and demanded payment solely from them.
Petitioners sought review in the Supreme Court by certiorari, assigning three errors: (I) denial of due process because COA did not show petitioners the canvass/price quotations on which the disallowance was based; (II) insufficiency of evidence to support COA’s finding of excess and disallowance; and (III) improper imposition of personal liability absent any finding or allegation of bad faith, malice or negligence. The Solicitor General initially objected that the due-process claim was raised for the first time on appeal; the Court relaxed that rule in the interest of justice (citing Caltex Phils., Inc. v. The IAC and Herbert Manzano, G.R. No. 74730, Aug. 25, 1989). Affidavits and correspondence in the record show NCA officials attempted to view COA’s canvass sheets and were repeatedly refused; COA’s Price Monitoring Division later stated price findings based on quotati...(Pro-only)
Issues:
- Did COA deny petitioners due process by refusing to show them the canvass sheets/price quotations underlying its audit disallowance?
- Was COA’s disallowance of P83,766.60 supported by sufficient evidence and compliant with COA standards on “excessive” expenditures?
- Could petitioners be held personally liable for the disallowed amount absent a finding of ba...(Pro-only)
Ruling:
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Ratio:
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Doctrine:
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