The nine-month suspension order issued by the Ombudsman against nine former members of the Sangguniang Panlalawigan (SP) and members of the Bids and Awards Committee (BAC) was purely a “procedural matter” and not irregularities relating to overprice or anomalies in the purchase of heavy equipment by the Provincial Government of Bohol (PGB).
Former Provincial Legal Officer Handel Lagunay told DYRD “Inyong Alagad” that the issue centered on two resolutions passed by the 2006 and 2009 SP authorizing the late Governor Erico Aumentado to open a letter of credit (LC) as a mode of payment for the purchase through importation of a backhoe with breaker and 26 units of heavy equipment for the road development program of the province as requested by then Vice Governor Julius Herrera as OIC Governor.
The two resolutions also authorized the bank to debit all charges to the opening and negotiation of the LC against the standing account of the province.
The apparent failure to review the provision of Republic Act (RA) No. 9184 known as the Government Procurement Reform Act by members of the SP and the BAC led to their nine-month suspension as ordered by the Ombudsman.
NO LEGAL BASIS
The first resolution authorized Aumentado to open an LC in the amount of PhP9,410,560.00 with the Philippine National Bank (PNB), Cebu Branch which ballooned to PhP9,649,500.00 due to exchange rate difference.
The Ombudsman for the 2006 procurement suspended then Board Member (BM) now Vice Governor Dionisio Balite, Jose Veloso, now Maribojoc Vice Mayor, Felix Uy, Concepcion Lim (former Vice Governor), Godofreda Tirol, Brigido Imboy, now Loay vice mayor, BAC members Abraham Clarin, Head of the Procuring Entity, Laura Saramosing – Boloyos, Felix Mejorada, all BAC members.
They were found liable for conduct prejudicial to the best interest of the service.
In the 2009Â procurement under Vice Governor Julius Herrera who was then acting governor, the Ombudsman suspended then BM Alfonso Damalerio, now Provincial Administrator, Cesar Tomas Lopez, now provincial health consultant, and Imboy.
Damalerio, Lopez and Imboy were found liable for conduct prejudicial to the best interest of the service for authorizing the Land Bank of the Philippines, through Resolution No. 2009-226 to debit all charges incidental to the opening of the LC despite an express prohibition in the amended Arroyo Memorandum Order 2013-2006.
The amended memorandum allowed the use of LC’s as a mode of payment but expressly prohibits the cost for the opening of LC’s to be charged to the government but shall be credited to the account of the local or foreign supplier.
The charges for the opening of the LC caused undue injury to the Province of Bohol in the total amount of PhP274,024.32, according to the Ombudsman.
UNDER PRESSURE
But in their rejoinder to the complaint, the SP members claimed they were under pressure from Aumentado to pass the resolution for the opening of the LC on 2006 while then Vice Governor Julius Herrera who was then acting governor in 2009 pushed them into granting his request for an LC.
However, the Ombudsman rebuked the SP members that “it is their responsibility before passing the resolution to ascertain if doing so does not contravene any provision of law.”
Lagunay admitted that SP Board Resolution No. 2006-387 passed on July 10, 2006 was approved despite the prohibition of the use of LC’s as mode of payment.
Section 42.5 of Memorandum Order No. 119 of September 18, 2003 issued by then President Gloria Macapagal Arroyo states that “no procuring entity shall be allowed to issue a letter of credit in favor of a Philippine entity or to any of the latter’s foreign manufacturers or suppliers with respect to any procurement”.
The Commission on Audit, on January 7, 2010 issued Audit Observation Memorandum (AOM) No. 210-07 that the opening of the LC was a violation of the existing memorandum and placed the government at a disadvantage. A notice of disallowance was subsequently issued.
RETROACTIVE
But Lagunay said that an amendment was signed by Arroyo a month after the SP resolution was passed that allowed the use of LC’s in favor of a local supplier.
As a standard banking practice, the use of LC’s has been recommended by the Government Procurement Policy Board (GPPB) to Arroyo.
According to Lagunay, the amended memorandum allowing the use of LC’s as a mode of payment should be applied in a retroactive manner by the Ombudsman since this is beneficial to the respondents.
Respondents who are now out of government service, the suspension without pay will be converted into a fine equivalent to their salary for six months payable to the Ombudsman.
The suspension order was issued on November 24, 2015 and was approved by Ombudsman Morales on January 16, 2017.
The complaint was filed on November 6, 2014 and docketed as OMB-V-A-14-0541. (Chito M. Visarra)