G.R. No. 180666 February 18, 2009
LEODEGARIO R. BASCOS, JR. and ELEAZAR B. PAGALILAUAN, Petitioners, vs. ENGR. JOSE B. TAGANAHAN and OFFICE OF THE OMBUDSMAN, Respondents.

FACTS

On December 14, 2000, the National Food Authority (NFA) entered into a contract with Alheed International Trading Corporation for the supply and installation of two rice mills. The contract stipulated that 70% of the price would be paid upon delivery and the remaining 30% after installation, testing, commissioning, and issuance of a Certificate of Final Acceptance by the NFA Field Office, contingent upon submission of required documents including a Certificate of Final Acceptance and a Certificate of conformity from the Technical Services Directorate (TSD).
Complainant Engr. Jose B. Taganahan, an Engineer-III at the NFA TSD, filed a Complaint-Affidavit alleging anomalies in the acceptance and full payment for the rice mill installed in San Jose, Occidental Mindoro. Taganahan reported that during his official travel from June 30 to July 6, 2001, the test milling could not be conducted due to a broken electric generator, some components were undelivered or uninstalled, and some installed components did not conform to specifications. He recommended deferring the 30% balance payment until completion.
Despite this, petitioners Leodegario R. Bascos, Jr. (TSD Director) and Eleazar B. Pagalilauan (Chief Grains Operations Officer) submitted a voucher for full payment on July 3, 2001. Attached documents included a Certificate of Inspection dated June 11, 2001, signed by Pagalilauan (misrepresenting himself as a “TSD Engineer”), an Accomplishment Report dated June 13, 2001, prepared by Pagalilauan (misrepresenting himself as “Project Manager”) and noted by Bascos, and a Certificate of Conformity dated June 14, 2001, issued by Bascos, all falsely certifying to 100% delivery, installation, and conformity. A Certificate of Complete Installation, Commissioning and Final Acceptance dated July 20, 2001, was also signed by Provincial Manager Tomas R. Escarez, despite his prior radio message on July 4, 2001, stating the test milling could not proceed due to generator malfunction. Payment was released on August 17, 2001.
Taganahan’s findings were supported by an NFA Internal Audit Services report dated September 6, 2001, citing contract violations. Bascos, in a Memorandum dated November 22, 2001, falsely declared Alheed Corp. had complied with all requirements as certified by TSD Engineers, but no such certification from TSD Engineers existed; Pagalilauan signed the certifications himself. Regarding the rice mill in Pili, Camarines Sur, Taganahan alleged Pagalilauan inveigled TSD engineers to sign pre-dated certifications. A second audit report dated January 7, 2002, cited further violations.
The Office of the Ombudsman found petitioners guilty of Dishonesty and imposed the penalty of dismissal. The Court of Appeals affirmed this decision.

ISSUE

Whether the Office of the Ombudsman and the Court of Appeals committed grave abuse of discretion in finding petitioners guilty of Dishonesty and imposing the penalty of dismissal.

RULING

The Supreme Court denied the petition and affirmed the assailed decisions. The Court held that the findings of the Office of the Ombudsman, affirmed by the Court of Appeals, were supported by substantial evidence. Petitioners failed to show that these findings were made with grave abuse of discretion. The evidence established that petitioners certified the rice mill project as 100% complete and conforming to specifications despite knowledge of its incomplete status and non-conformity, as reported by Taganahan and confirmed by audit reports. Their acts constituted Dishonesty, defined as a disposition to lie, cheat, deceive, or defraud. The penalty of dismissal from service for the first offense of Dishonesty is mandated by the Revised Uniform Rules on Administrative Cases in the Civil Service. The Court found no reason to deviate from this penalty.