G.R. No. 266713 , July 30, 2024
George P. Cabreros and Barmel B. Zumel, Petitioners, vs. Commission on Audit, Respondent. [Consolidated with G.R. No. 270183 (formerly UDK 17816): Jessie Mario B. Dosado, Petitioner, vs. Commission on Audit, et al., Respondents.]

FACTS

In February 2003, the Army Support Command (ASCOM) of the Philippine Army received six Procurement Directives (PDs) for Combat Clothing and Individual Equipment (CCIE) items totaling PHP 5,103,000.00. The Bids, Negotiations and Acceptance Committee (BNAC), composed of petitioners Lieutenant Colonels George P. Cabreros and Barmel B. Zumel as members and Jessie Mario B. Dosado as Secretariat, resolved to procure the items through “shopping” due to urgency. After canvassing, Dantes Executive Menswear was selected. The BNAC issued an Abstract of Canvass and Recommendation of Award, and six separate Purchase Orders (POs) were prepared and signed by approving officers. Disbursement Vouchers were subsequently issued and paid.
In 2010, the Commission on Audit (COA) issued Notice of Disallowance (ND) No. 10-001-101(03), disallowing the PHP 5,103,000.00 payment. COA found that the procurement violated COA Circular No. 76-41 and Republic Act No. 9184 (Government Procurement Reform Act) due to splitting of contracts, as six POs were issued on the same date for similar items to the same supplier to avoid public bidding. The ND held petitioners and other officers solidarily liable. Petitioners appealed to the COA Regional Director (National Government Sector), which affirmed the ND. Their petition for review to the COA Proper was dismissed for late filing, a ruling reiterated when it denied their first and second motions for reconsideration. Petitioners filed the present Petitions for Certiorari.

ISSUE

Whether the COA Proper committed grave abuse of discretion in affirming the disallowance and holding petitioners solidarily liable for the amount.

RULING

The Supreme Court DISMISSED the petitions. The COA Proper did not commit grave abuse of discretion.
1. On Procedural Matters: The Court found that petitioners’ appeal to the COA Proper was indeed filed out of time. They received the COA-NGS Decision on February 29, 2012, and the Notice of Finality of Decision on September 5, 2013. Their petition for review filed on October 4, 2013, was beyond the six-month reglementary period. The COA Proper’s dismissal on this ground was correct.
2. On the Merits of the Disallowance: The Court upheld the disallowance. The procurement involved splitting of contracts, which is prohibited. The six POs, issued on the same day (June 18, 2003) for similar CCIE items from the same supplier, with each PO valued below the PHP 1,000,000.00 threshold for public bidding, clearly constituted splitting to evade competitive bidding requirements under the law. The alleged urgency did not justify the irregularity, as the PDs were issued in February 2003, but the POs were only issued in June 2003.
3. On the Liability of Petitioners: The Court affirmed petitioners’ solidary liability. As members of the BNAC, they were directly responsible for the irregular procurement. They certified the reasonableness of the price, recommended the award, and were integral to the process that led to the unlawful expenditure. Their signatures on procurement documents established their direct responsibility. The defense of good faith was not applicable, as the splitting of contracts was patent and violative of clear procurement rules. The fact that the items were allegedly received by end-users does not cure the illegality of the transaction.
4. On the Effect of Related Ombudsman Cases: The Court noted that in related criminal and administrative cases before the Sandiganbayan and Court of Appeals, some petitioners were acquitted or absolved. However, these dispositions do not bind the COA. COA disallowance proceedings are administrative in nature, separate and distinct from criminal or administrative disciplinary cases, and involve different standards of proof and purpose—the audit and settlement of government accounts.