October 14, 2009

COA DECISION NO. 2009-111

SUBJECT

:
Requests of Ms. Ma. Teresa M. Urbano, Officer-in-Charge (OIC), Accounting
Section, Ms. Eva S. Peregrino, Accountant II, and Mr. Alejandro F. Buniag, Cashier, All
of the Employees' Compensation Commission (ECC), Makati City, for Exclusion From
Liability in Notices of Disallowance (ND) Nos. 2005-036 to 042 Which Were All
Affirmed Under LAO-Corporate Decision No. 2007-003 Dated January 19, 2007

DECISION

FACTS OF THE CASE

As a result of the audit of selected transactions of the ECC, Notices of Disallowance (NDs) were issued as
follows:
NDs No./
Date/Amount
2005-036/
10/14/05/
P77,624.25

Transaction
Description

Purchase of various
plants

Grounds for
Disallowance
Without an approved Purchase
Order/violation of paragraph 6,
Section 4, Presidential Decree (P.D.)
No. 1445

Persons liable

Mr. Elmor Juridico ECC

Executive Director
Ms. Milagros M. Balteza Chief, Finance and
Administrative Division
Ms. Ma. Teresa M. Urbano OIC, Accounting Section
Amor's Garden - Supplier

2005-037/

Construction
supplies and
materials procured
thru cash advances
of Ms. Balteza

Violation of Section 4(7) of P.D.

1445 and
Section 474 of GAAM Volume II,
COA
Circular No. 97-002 dated February
10, 1997

10/14/2005
P857,676.65

Mr. Juridico

Ms. Balteza
Ms. Urbano
Ms. Eva S. Peregrino
-Accountant II
Mr. Alejandro Buniag
- Cashier

2005-038/

Food,
accommodation

10/14/2005

and transportation

2005-039/

expenses of nonECC
personnel
Labor costs for the

10/14/05

Canteen renovation

P740,136.20

works

P16,496.00

2005-040/
10/14/05/
P965,838.20

Price escalation for

the contract for the
construction of steel

Unsettled balance of cash advances

of
Lanante
Ms. Milagros M. Balteza and Ms.
Lanante

Mr. Juridico
Ms. Balteza
Ms. Urbano

No individual contracts between

ECC and the workers
concerned/violation
of Section 4, P.D. 1445 and Article
20,
Revised Penal Code

No GPBB approval/violation of 61.1

Implementing Rules and
Regulations, R. A. 9184

structure and roofing

Ms. P. Lanante
Mr. Juridico
Ms. Balteza
Ms. Urbano
Ms. Evelyn F. Tablang
ECC Deputy Executive
Director
Mr. Buniag
Mr. Juridico
Ms. Balteza
Ms. Urbano
FLB Construction Contractor

at ECC Building
2005-041/
10/14/05/
P48,500.00

2005-042/

Professional fee of
Lagera Architects
Design
and Build

Excess registration
allowance for

Without an approved contract of

services/

Mr. Juridico

Job Order/violation of paragraph 6,

Ms. Balteza

Section 4, P.D. 1445

Ms. Peregrino
Lagera Architects Design
and Build Contractor
Ms. Tablang

Violation of paragraph 3.2, National

Budget Circular No. 486 dated

allowance for
seminar

10/14/05/
P900.00

Budget Circular No. 486 dated

March 26,
2003

Ms. Balteza
Ms. Urbano

The foregoing NDs were all armed under Legal and Adjudication Oce (LAO)-Corporate Decision No. 2007003 dated January 19, 2007.
In the herein requests for exclusion from liability, the persons identied as liable thereon present the
following justifications:
1.

Ms. Ma. Teresa M. Urbano, Officer-in-Charge, Accounting Section:

a.

ND No. 2005-036
Payment to Amor Garden was processed per instruction of Executive Director Juridico
after the supplier completed the delivery of plants and materials. Except for the
required PO, all required documents were satised. The disbursement voucher was
supported with Requisition and Issue Voucher (RIV) No. 2003-059 dated February 4,
2003. The request for the supply of various plants and materials including labor was
made by Ms. Peregrino, recommended for approval by Ms. Balteza and approved by
Executive Director Juridico. Deliveries were made on various dates and original
Invoice issued by Amor Garden supported each delivery. Deliveries were likewise
accounted for and accepted by Ms. Peregrino and inspected by Ms. Novelina Ibesate,
Internal Audit Unit representative as per Acceptance and Inspection Report dated
February 26, 2003. Even without the PO, Amor Garden has complied with the
delivery of the plants and materials in accordance with the specifications of the ECC,
and payments were made only on what were actually delivered by the supplier per
Invoice received, hence, no loss on the part of the government.

b.

ND No. 2005-037
Out of the total amount of disallowance, she only certied the amount of P811,801.65
excluding Voucher No. 29-02-06-57 dated June 24, 2002 in the amount of
P45,875.00. Although the procurement of construction materials was done thru
cash advance, the replenishment vouchers were properly supported by required
documents and all transactions were approved by Executive Director Juridico. The
prices of construction materials were canvassed and summarized in the Abstract of
Price Quotations approved by Executive Director Juridico. The materials were
purchased from the supplier with the lowest price quotation per item, hence, to the
advantage of the government. Materials delivered were checked, accounted for and
accepted by Mr. Ambil who was in-charge of the project. Deliveries were likewise
inspected by the Internal Audit representative and accepted by the Supply Ocer
per Acceptance Report attached to every replenishment voucher. The
Accomplishment Reports were certied correct by Ms. Balteza and approved by the
Executive Director.

c.

ND No. 2005-038
The unsettled balance of cash advances granted to Ms. Balteza and Ms. Lanante
pertains to food, accommodation and transportation expenses of non-ECC personnel
in the Team building funded under the Department of Budget and Management
(DBM) approved CY 2002 Corporate Operating Budget (COB) for Maintenance and
Other Operating Expenses. The liquidation/expenses were properly certied as
necessary, lawful and incurred under the supervision of Ms. Balteza. All required
documents for the liquidation were satised including the certication of both Ms.
Balteza and Ms. Lanante. The disbursements were likewise supported by receipts
and attendance of the participants per ECC Oce Order. Thus, Ms. Urbano believes
that any disallowance in the cash advances shall be the personal liability of
accountable officers, Ms. Balteza and Ms. Lanante.

d.

ND No. 2005-039 and ND No. 2005-040

Vouchers were duly supported by required documents such as:

Payroll certied/signed by Disbursing Ocer Alejandro Buniag and noted by

Ms. Balteza. The Payrolls were also signed by the workers concerned for the
number of days rendered and the corresponding wages earned. The rates per
day of the workers were also indicated in the approved Payroll. Auditor La
Torre allowed in audit the rst replenishment voucher and all succeeding
vouchers relative to the liquidation of the cash advance of Mr. Buniag;

Daily Time Records (DTRs) of the workers supported the approved Payroll. Mr.
Gil S. Ambil, Sr. Electrician and in-charge with the construction project,
certied the DTRs as true and correct report of the hours of work rendered by
the workers;

Accomplishment Report relative to the said project was prepared by Mr. Ambil;

Billings were reviewed and checked by Project Engineer Nelson Buenaor,

certied correct and recommended for payment by Ms. Balteza and approved
by the Executive Director;

Accomplishment Reports were prepared by the Project Engineer and approved

by the Executive Director. The Accomplishment Reports were likewise certied

by the Executive Director. The Accomplishment Reports were likewise certied

correct by Ms. Balteza and approved by Executive Director Juridico;

e.

DBM approved ECC COB for CY 2001 and CY 2002 which served as bases of her
certification as to the availability of funds; and,

The Contract for the Supply of Labor, Materials, Tools and Equipment,
Construction Steel Structure, and Roong including Demolition/Removal
Works entered into on April 5, 2004 by and between Executive Director
Juridico and FLB Construction in the amount of P9,850,000.00.

ND No. 2005-042
The registration allowance of P1,500.00 per day was within the DBM approved budget
of the ECC for trainings and seminars. Moreover, said disallowance amounting to
P900.00 was already settled in 2005 by Ms. Laqui per Ocial Receipt No. 8135474
dated October 21, 2005.

In all the disallowed transactions, Ms. Urbano stressed that her certication on the subject vouchers was not
an approval of the transactions but was limited to the implementation of what was already approved by her
superiors especially Executive Director Juridico.
2.

Mr. Alejandro F. Buniag, Cashier III:

a.

ND No. 2005-037; and

b.

ND No. 2005-039
Based on the payrolls noted and signed by Ms. Balteza, he prepared the individual
pay envelopes of the workers and payments were made to the laborers after having
signed the payroll. He claimed that he did not only require the laborers to just sign
opposite their names but also required them to present identication cards. Prior to
payment, he veried and examined the following supporting documents and found
the same in order:

Payrolls were duly noted by Ms. Balteza. The Payrolls were also signed by each
of the worker for the number of days rendered and the corresponding wages
earned. The rates per day of the workers were also indicated in the approved
Payroll;

The DTRs of the workers supported the approved Payroll. Mr. Gil S. Ambil, Sr.
Electrician and in-charge with the construction project certied that the DTRs
were true and correct report of the hours of work rendered by the workers;
and,

Accomplishment Report relative to the said project was prepared and

submitted by Mr. Ambil and Mr. Ernesto B. Escobar. The Accomplishment
Reports were likewise certied correct by Ms. Balteza and noted by Executive
Director Juridico.

Mr. Buniag further claimed that the approved Payroll, supported with the duly certied DTRs of the workers,
served as alternate documents for the individual contracts between ECC and the workers concerned
sucient to support replenishment of the expenses. The replenishment vouchers were properly certied as
necessary, lawful and incurred under the supervision of Ms. Balteza. Ms. Urbano certied that there were
adequate funds, budgetary allotments and that the expenditures were properly supported by documents,
account code entries were proper and previous cash advances were liquidated and accounted for. Said
vouchers were pre-audited by Ms. Novelina C. Ibesate. Moreover, the project was completed per approved
work specications. The then covered parking lot is now the Public Assistance Center (PAC) of the ECC and
the Canteen and Catering Services under the ECC Multipurpose Cooperative.
3.

Ms. Eva S. Peregrino, Accountant II:

a.

ND No. 2005-037
The expenses were properly certied as necessary, lawful and incurred under the
direct supervision of Ms. Balteza. She explained that based on her verication, the
DBM approved COB for CY 2002 included an item regarding the construction of the
Penthouse Roof and Multi-purpose Hall for P15,000,000.00 from which she based
her certication on the availability of funds. She justied that although the
disbursements were sourced from cash advances of Ms. Balteza, the purchases were
supported with RIV, scope of works and specications, canvasses, Abstract of Price
Quotation, deliveries duly inspected as reected in the certicate of acceptance, and
accomplishment reports. The required documents were all properly approved by the
Head of Agency.

b.

ND No. 2005-041
The transaction was supported by three (3) quotations from Lagera, Architects Design
and Build, R. G. Gregorio Architect, and DJK Sabularse & Associates where Lageras
quotation was the lowest, thus most benecial to the government. Also, the
expenses were certified as lawful and necessary.

ISSUE
Whether or not the herein requests for exclusion from liability are meritorious.
DISCUSSION

This Commission nds merit in the herein requests for exclusion from liability. Section 103 of P.D. No. 1445
or the Government Auditing Code of the Philippines, provides:
"General liability for unlawful expenditures. Expenditures of government funds or uses of
government property in violation of law or regulations shall be a personal liability of the
official or employee found to be directly responsible therefor." (emphasis supplied)

Under this provision, an ocial or employee shall be personally liable for unauthorized expenditures if the
following requisites are present, to wit:
(a)

there must be an expenditure of government funds or use of government property;

(b)

the expenditure is in violation of law or regulation; and

(c)

the official is found directly responsible therefor.

Likewise, Section 19 of the Manual on Certificate of Settlement and Balances (CSB) states:
"19.1
The liability of public ocers and other persons for audit disallowances shall be determined
on the basis of: (a) the nature of the disallowance; (b) the duties, responsibilities or obligations
of the ocers/persons concerned; (c) the extent of their participation or involvement in
the disallowed transaction; and (d) the amount of losses or damages suered by the government
thereby. . ." (emphasis ours)

As held by this Commission in COA Decision No. 2003-103 dated July 8, 2003, viz:
"On the matter of inclusion of other NAPOCOR ocials in the list of persons liable, their liability for
the disallowance depends upon the degree of their participation in the granting of the questioned
monetary benets. It should be noted that the payments to the Board Members were made on the
strength of Board Resolutions which they are under obligation to comply with. There being no
strong and solid evidence to show that these administrative ocials have knowledge of the illegality
of the additional compensation to these Board Members and their acts being merely conned
to the preparation of vouchers and eecting payment thereto, they may not be held
liable for the subject disallowance" (emphasis supplied)

As borne by the records, the participation of both Ms. Urbano and Ms. Peregrino in the disallowed
transactions was limited to the certication of availability of funds. Their acts were merely conned to the
preparation of the vouchers and they were not involved in the approval and implementation of the
questioned transactions as distinguished from those ocials who certied to the legality of the transactions
and approved the implementation of the same. The latter were directly responsible for the disallowed
transactions. Under the law and the CSB Manual, both Ms. Urbano and Ms. Peregrino could not be held
personally liable on the subject disallowance. Moreover, in the case of Macadangdang vs. Sandiganbayan,
170 SCRA 308 duly cited in the case of Albert vs. Gangan, et al., G. R. No. 126557, March 6, 2001 , it was
held:
"We have consistently held that every person who signs or initials documents in the course of transit
through standard operating procedures does not automatically become conspirator in a crime which
transpired at a stage where he had no participation. His knowledge of the conspiracy and his active
and knowing participation therein must be proved by positive evidence. The fact that such ocer
signs or initials a voucher as it is going the rounds does not necessarily follow that the said person
becomes part of a conspiracy in an illegal scheme." (underscoring supplied)

Likewise, Mr. Buniag cannot be faulted for paying the services of the construction workers who indeed
rendered services to the ECC. Since the subject laborers are daily wage earners, it is understandable that no
individual contracts were executed between them and the ECC. Without violating the principle on ' unjust
enrichment,' ECC may not evade payment for the services of the concerned workers. As aptly pointed out by
Mr. Buniag, the approved DTRs and payrolls serve as valid contracts of services between the parties. A
formal written contract may not be necessary anymore as "a contract will be upheld as long as there is proof
of consent, subject matter and cause; it is generally obligatory in whatever form it may have been entered
into (Lopez vs. Bodega City, G.R. No. 155731, September 3, 2007 citing the ruling upheld in the case of
Cordial vs. Miranda, 401 Phil. 307, 319).
Similarly, Mr. Buniag cannot be held liable for the cash advance of Ms. Balteza who should account for the
amount and make the proper liquidation thereof.
RULING
WHEREFORE, foregoing premises considered, the within requests of Mesdames Ma. Teresa M. Urbano and
Eva S. Peregrino, and Mr. Alejandro F. Buniag for exclusion from liability are hereby GRANTED. Accordingly,
Ms. Urbano is hereby excluded among the persons liable under ND Nos. 2005-036, 2005-037, 2005-038,
2005-039, 2005-040 and 2005-042; Ms. Peregrino is excluded among the persons liable under ND Nos.
2005-037 and 2005-041; and Mr. Buniag is excluded among the persons liable under ND Nos. 2005-037 and
2005-039. However, the liabilities of the rest of the persons named liable under the aforementioned NDs
shall remain.

(SGD.) REYNALDO A. VILLAR

Chairman
(SGD.) JUANITO G. ESPINO, JR.
Commissioner
Copy furnished:

Ms. Ma. Theresa M. Urbano

Ms. Eva S. Peregrino
Mr. Alejandro F. Buniag
All of the Employees Compensation Commission
ECC Building, 355 Sen. Gil Puyat Avenue
Makati City
The Cluster Director
Cluster A
Corporate Government Sector
This Commission
The Audit Team Leader
Employees Compensation Commission
ECC Building, 355 Sen. Gil Puyat Avenue
Makati City
The Assistant Commissioners
Corporate Government Sector
Legal Services Sector
This Commission