G.R. No. 246053 , April 27, 2021
LUIS RAYMUND F. VILLAFUERTE, JR., PETITIONER, VS. COMMISSION ON AUDIT, RESPONDENT.

FACTS

In 2007, the Provincial Government of Camarines Sur (PG-CamSur), through its Provincial General Services Officer Bernardo A. Prila, prepared a purchase request for a shipping vessel to promote tourism, with an estimated cost of Php8,500,000.00. The request was certified by the Provincial Treasurer and approved by petitioner Luis Raymund F. Villafuerte, Jr. as Provincial Governor. The Provincial Bids and Awards Committee (BAC) adopted direct contracting as the mode of procurement and selected Regina Shipping Lines, Inc. to sell its vessel, MV Princess Elaine, for Php8,500,000.00. A partial payment of Php4,250,000.00 was made on December 19, 2007. On post-audit, COA auditors found missing vital documents and that the partial payment constituted an advance payment violative of Section 338 of the Local Government Code and Section 88(1) of the Government Auditing Code. After an Audit Observation Memorandum and a Notice of Suspension were issued, PG-CamSur responded, justifying that the vessel was already in use prior to payment and that direct contracting was used due to the supplier’s good track record. Due to insufficient compliance, COA issued Notice of Disallowance (ND) No. 2010-100-007(08) on September 21, 2010, disallowing the Php4,250,000.00 payment and holding petitioner and other officials liable. Petitioner and co-appellants appealed to the COA Regional Office, which affirmed the ND. Their subsequent petition for review to the COA Proper was dismissed for being filed out of time. A motion for reconsideration was denied. Petitioner then filed this Petition for Certiorari before the Supreme Court.

ISSUE

Whether the Commission on Audit gravely abused its discretion in affirming the disallowance of the partial payment for the procurement of the shipping vessel.

RULING

The Supreme Court dismissed the petition and affirmed the COA’s decisions. The Court held that the COA did not commit grave abuse of discretion. The petition for review before the COA Proper was indeed filed out of time, as the second motion for extension was denied, making the filing period lapse on January 14, 2013, but the petition was filed only on February 11, 2013. On the merits, the Court found the disallowance proper. The procurement violated Republic Act No. 9184 (Government Procurement Reform Act) as it did not undergo mandatory competitive public bidding. The use of direct contracting as an alternative mode was unjustified because the required conditions—such as goods being proprietary/patented, sold by an exclusive distributor/manufacturer, or for emergencies—were not present. The partial payment made prior to the execution of the Deed of Absolute Sale and the delivery receipt constituted an unlawful advance payment prohibited by law. Petitioner, as approving authority, was solidarily liable for the disallowed amount under the doctrine of collective responsibility of public officers who approve illegal expenditures. The Court rejected petitioner’s claim of administrative res judicata based on Ombudsman dismissals, as COA’s audit jurisdiction is separate and distinct. The defense of good faith was also unavailing due to the clear violations of procurement laws.