In a decision released March 11, the audit commission upheld the disallowance covering the ₱19.14-million rehabilitation and improvement of the old circumferential road leading to the El Rio junction of the Davao City Diversion Road.
State auditors found that the project cost far exceeded the allowable estimate set under Department of Public Works and Highways (DPWH) standards.
According to COA, the project should have cost only about ₱7.14 million, meaning the actual contract price exceeded the allowable amount by 167.95 percent, or nearly ₱12 million.
The contractor for the project was E. Gardiola Construction, which is registered to the brother of Construction Workers Solidarity party-list Rep. Edwin Gardiola.
COA said the same contractor was involved in six other infrastructure projects that had also been flagged by auditors, with all seven cases already transmitted to the Office of the Ombudsman for possible criminal investigation.
Several officials and personnel of the DPWH Davao district engineering office were named in the notice of disallowance namely:
Lorna Ricardo, DPWH-Davao district engineer
Milagros delos Reyes, assistant district engineer
Dwight Vincent Fernandez, engineer
Eduardo Villar, engineer
Lilibeth Sarmiento, engineer
Emilio Sucaldito, estimating committee head
William Paglinawan, construction and maintenance foreman
Rolly Tulayba, laboratory technician
E. Gardiola Construction, contractor
During inspection, the COA audit team cited numerous irregularities and technical deficiencies, including the absence of proper measurements and reference landmarks in the approved plans.
Auditors also reported the use of substandard materials, including rusted rails, bolts, nuts and washers, as well as road signs and pavement studs that did not meet quality standards.
The officials involved had asked COA to reconsider the audit findings, arguing they were denied due process because the special audit report was issued after the notice of disallowance and no exit conference was conducted.
However, the COA en banc rejected the appeal, ruling that the parties were given the opportunity to respond through the proper review process.
While sustaining the finding of excessive pricing, the commission slightly reduced the amount covered by the disallowance to ₱10.8 million.
What happens after a COA disallowance
Under government auditing rules, a Notice of Disallowance (ND) means the Commission on Audit has determined that a government expenditure was illegal, excessive, unnecessary, or irregular.
When an ND becomes final and executory, the persons named as liable respondents are required to return the disallowed amount to the government, either jointly or individually depending on the degree of liability determined by COA.
These respondents typically include approving officers, certifying officers, and other officials directly involved in authorizing or implementing the transaction.
Aside from the obligation to refund the amount, the COA decision may also be forwarded to the Office of the Ombudsman, which has the authority to determine whether administrative or criminal charges should be filed against the officials involved.
If the Ombudsman finds sufficient basis, the respondents could face administrative sanctions such as suspension or dismissal from government service, as well as criminal prosecution for possible violations of anti-graft laws.
In the case of the Davao road project, COA noted that the findings were among several infrastructure cases involving the same contractor that had already been transmitted to the Ombudsman for further investigation.
The project was implemented in 2010, the same year Karlo Nograles assumed office as representative of Davao City’s 1st District, succeeding his father Prospero “Boy” Nograles, who had served as the district’s congressman until the end of his term that year.
Prospero Nograles had represented the district from 2001 to 2010 and served as Speaker of the House from 2008 to 2010, before being succeeded by his son in Congress beginning June 30, 2010.
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