Facts:

The case involves petitioners Leodegario R. Bascos, Jr. and Eleazar B. Pagalilauan, who were found guilty of dishonesty by the Office of the Ombudsman. The events leading to this case began with a contract dated December 14, 2000, between the National Food Authority (NFA) and Alheed International Trading Corporation for the supply, delivery, installation, and commissioning of two rice mills for a total price of P19,398,042.00. The contract stipulated that payments would be made upon delivery and installation, contingent upon the submission of various documents, including a Certificate of Final Acceptance from the NFA.

On August 23, 2002, Engineer Jose B. Taganahan filed a Complaint-Affidavit with the Office of the Ombudsman, alleging that Bascos and Pagalilauan, along with others, were involved in the anomalous acceptance and payment for the rice mills installed in San Jose, Occidental Mindoro, and Pili, Camarines Sur. Taganahan reported that during his official travel to S...

Facts:

The Contract
On 14 December 2000, a contract was executed between the National Food Authority (NFA) and Alheed International Trading Corporation (Alheed Corp.) for the supply, delivery, installation, and commissioning of two rice mills. The total contract price was P19,398,042.00, with 70% payable upon delivery and 30% after installation, testing, and commissioning, subject to NFA accounting and auditing rules.

The Complaint
On 23 August 2002, Engr. Jose B. Taganahan filed a Complaint-Affidavit with the Office of the Ombudsman, alleging irregularities in the acceptance and full payment of the rice mills installed in San Jose, Occidental Mindoro, and Pili, Camarines Sur. He accused petitioners Leodegario R. Bascos, Jr. (NFA TSD Director) and Eleazar B. Pagalilauan (NFA Grains Operations Officer), among others, of falsifying documents to facilitate full payment to Alheed Corp. despite incomplete installation and non-conformity with contract specifications.

The Allegations
Taganahan reported that the rice mill in San Jose, Occidental Mindoro, failed to meet contract requirements, including non-delivery of items, deviations from specifications, and non-compliance with testing procedures. Despite these issues, Bascos and Pagalilauan submitted documents certifying completion and conformity, leading to the release of the 30% balance payment.

Audit Findings
The NFA Internal Audit Services (IAS) confirmed Taganahan’s allegations, citing multiple violations of the contract, including non-delivery of equipment, unauthorized changes to specifications, and non-compliance with training requirements.

Issue:

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Ruling:

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Ratio:

The Court upheld the findings of the Office of the Ombudsman and the Court of Appeals, which were supported by substantial evidence. Petitioners Bascos and Pagalilauan were found to have issued certifications attesting to the completion and conformity of the rice mills, knowing full well that the equipment did not meet contract specifications. Their actions constituted dishonesty, defined as the concealment or distortion of truth relevant to their official duties.

The Court emphasized that public office is a public trust, and public officers must act with utmost integrity. Petitioners’ failure to ensure compliance with the contract and their issuance of false certifications caused damage to the government. Their dismissal from service was warranted under Civil Service rules, which classify dishonesty as a grave offense punishable by dismissal for the first offense.