D E C I S I O N

Before this Commission is a Petition/Motion for Reconsideration from Notice of Disallowance No. 94-60-001 dated February 6, 1996 filed by Petitioners-Movants Reynaldo Gaballo, Magadapa Paporo and Amante Siapno. In said Notice of Disallowance, the amount of P360,896.25, made in payment of laboratory chemicals, equipment's and supplies was disallowed by the Special Audit Office (SAO), this Commission, in a special audit of the Department of Agriculture (DA) Region X, Cagayan de Oro City, for the period from September 30, 1994 to January 1, 1998. The disallowance was predicated on the fact that the purchase was not among those listed in the project study hence, unnecessary and irrelevant and that some items were never utilized and had expired causing undue injury to the government. Held liable for the disallowance were Reynaldo Gaballo, Provincial Agricultural Officer, for certifying that the disallowed expense was necessary and legal, and DA-Regional Director Amante Siapno and DA-Assistant Regional Director Magadapa Paporo for approving the disbursement vouchers, purchase orders and requisition and issue vouchers for the purchase of said chemicals, equipment and supplies.

Extant records disclose that in a Memorandum of Agreement dated November 18, 1982, the National Irrigation Administration and the then Ministry of Agriculture entered into joint undertaking for the establishment of a farmers' training center, later known as the Integrated Farmers Training Center in Butuan City on a one-hectare area to be leased from the provincial government of Agusan del Norte. In 1990, the Department of Agriculture (DA), Bureau of Fishery and Aquatic Resources (BFAR) and the National Agriculture and Fishery Council (NAFC) proposed the establishment of a Fishery Diagnostic Laboratory (FDL) to support the needs of the entire region, which should be housed at the existing DA-Integrated Farmers Training Center (IFTC) in Butuan City. In a Memorandum of Agreement dated August 8, 1991 the NAFC and the DA agreed to release P1.5 Million to the DA Regional Director as trust funds to finance agriculture-and fishery-based projects to be undertaken by organized farmers and fishermen. Consequently, a List of Equipment, Chemicals and Supplies for the operation of the DA-FDL was prepared with a budget of P1.5 Million.

Pursuant to this Memorandum of Agreement of August 8,1991, Regional Director Siapno, in a Memorandum dated September 9, 1991 furnished Mr. Gaballo with a copy of the Project Proposal (List of Equipment, Chemicals and Supplies) on the FDL with a note for the latter to start the bid and canvass thereon. The bid and canvass for laboratory equipment, chemicals and supplies commenced and the contract was awarded to the bidder who offered a price most advantageous to the government. Consequently, the necessary vouchers were issued and signed in payment therefor. Sometime in September 1992, the Sangguniang Panlalawigan of that province transferred office to the IFTC without the DA officials' consent such that when the chemicals, equipment and supplies were delivered, the IFTC without the DA officials' consent such that when the chemicals, equipment and supplies were delivered, the IFTC was no longer in possession of the building. Dislocated, Mr. Gaballo proposed to the Provincial Governor a project for the establishment of the FDL with the assistance of the Sangguniang Panlalawigan with the amount of P122,164.70 as its estimated cost was approved by the Sangguniang Panlalawigan of the said province. A special audit conducted on the operations and financial transactions of the DA-Region X by a SAO team, this Commission, brought about the disallowance under reconsideration.

After a circumspect and careful evaluation of this case, in the light of the facts and arguments raised herein, this Commission finds the Petition/Motion for Reconsideration to be impressed with merit.

It appears, after a thorough comparison, that the items disallowed on the ground that they are not among those listed in the project proposal attached to the Memorandum of Agreement dated August 8, 1991 are in fact all listed and contained therein. It has also been established that some equipments were substituted by the Bids and Award Committee with another having the same functions as the proposed items. Thus, the disallowed Moisture Analyzer 115/240V and Electric Seamer Dixie Model 23 are actually the Moisture Balance 110V/375W and Automatic Can Sealer, respectively, in the Project Study List. There was somehow an error in the technical interpretation in the volumetric expression in the case of the disallowed Thermolyne Muffle Furnace Electric 220V-F-1410M, Pressure Cooker 4.5 quartz, Pressure Cooker 10.5 quartz, stove 22V 2 Burner Technogas, Upright Freezer and Laboratory Cart 2 units - - - which are actually the Electric Furnace 220V/2.2W, the Pressure Cooker 4 1/2 quartz, the Pressure Cooker 10 1/2 quartz, the Stove 220V, the Upright Freezer 12 cu. Ft. and the Glassware cart, respectively, in the Project Study List.

The Trichloroacetic Acid, Picric Acid and Sodium Bisulfate were disallowed for having allegedly expired, but it appears that these chemicals do not expire under normal laboratory condition and no injury to date was sustained by the government from the purchase thereof. On the other hand, the MC Conkey Agar and Bismuth Sulfate Agar are chemicals which expired at the time of the audit since their chemical reaction proceeded with time and after a while they lost their effectiveness. Nevertheless, this Commission finds merit in the explanation of Petitioners-Movants, that these chemicals expired before clients could be served when the IFTC building which housed the FDL was taken over by the Sangguniang Panlalawigan considering that the takeover of the said building is a circumstance beyond the control of the DA officials.

Lastly, Mr. Gaballo cannot be held liable for his act in certifying to the necessity and legality of the disallowed items, it appearing that he relied on the decision of the members of the Bids and Awards Committee, whose duty was to evaluate, review and award to the bidder who offered the price most advantageous to the government. Besides, the bids and award of the disallowed items were made in the presence of the COA Resident Auditor and the end user.

The signing of the vouchers and purchase orders by Assistant Regional Director Magadapa Paporo and Regional Director Amante Siapno, pursuant to the Memorandum of Agreement of August 8, 1991 was ministerial after all papers were found in orders by the General Services, Accountancy and Budget Office.

Wherefore, premises considered, Notice of Disallowance No. 94-60-001 dated February 6, 1996 is lifted and the Petition/Motion for Reconsideration has to be, as it is hereby granted.

(Sgd.) CELSO D. GAÑGAN
Chairman