COA orders Binays to refund P2.29B spent for Makati Parking Bldg.

The Commission on Audit has ordered former Vice President Jejomar Binay Sr. and his son, former Makati City mayor Jejomar Erwin "Junjun" Binay Jr., to return to the government the sum of P2.29 billion in public funds spent for the construction and design of the allegedly overpriced Makati City Hall Parking Building.

In two notices dated March 15 addressed to Mayor Abigail Binay, the COA Fraud Audit Office disallowed the P2.28 billion allotted for the construction of the building implemented by Hilmarc's Construction Corporation and the P11.97 million contract awarded to MANA Architecture and Interior Design Co. for the architectural and engineering phase.

The COA directed 56 other Makati City officials and private contractors to collectively "settle immediately" if the notices of disallowance (ND) are not appealed within six months. This includes former vice mayor Ernesto Mercado and Hilmarc's president Efren Canlas.

Under COA audit services, the issuance of an ND is intended for the "disapproval in audit of a transaction, either in whole or in part of being illegal, irregular, unnecessary, excessive, extravagant, or unconscionable expenditure."

Discrepancy

The construction of the Makati Parking Building from 2007 to 2011 was divided into five phases valued at P387 million for Phase 1; P499.36 million for Phase 2; almost P600 million for Phase 3; P649.93 million for Phase 4; and P143.8 million for Phase 5.

State auditors, however, found discrepancies worth P1.3 billion for all phases when the actual and reported accomplishments are compared.

“Actual verification, inspection, evaluation, review of documents and recalculation made disclosed that the 100% reported accomplishments of Hilmarc’s for all Phases 1 to 5 do not reconcile with the actual accomplishments, showing discrepancies totaling P1,301,520,330.05,” COA said.

The COA said the bulk of the discrepancies came during the administration of Binay Jr. This accounts to "overpayments" worth P430.367 million for Phase 3; P257 million for Phase 4; and P91 million for Phase 5.

Binay Jr. is liable under the Government Auditing Code of the Philippines for approving the payments for Hilmarc's without complete supporting documents and even if the accomplishment for each phase has not reached 100 percent, according to COA.

The largest discrepancy under the term of Binay Jr. was the 71.80 percent for Phase 3, when only 28.27 percent of the construction phase was finished despite a 100 percent accomplishment rate dated May 23, 2011.

Meanwhile, Binay Sr. was held liable for the P523-million discrepancy for Phases 1 and 2 of the project during his term as mayor.

The COA said actual accomplishment for Phase 1 only reached 13.91 percent compared to the reported accomplishment of 100 percent on January 6, 2009, while Phase 2 had an actual accomplishment rate of only 62.26 percent.

“There were noted discrepancies in the accomplishment for some work items such as variance in quantity for some items under bulk excavation, earth fill, bored piling works, concrete works, matting foundation, reinforcing bars, form works, electrical works and other items that resulted in overpayment to the contractor,” COA said.

It also pointed to the elder Binay for allowing the revised construction of the parking building from nine-storeys worth P283 million to an 11-storey structure with a roof deck worth P2.28 billion despite the lack of an approved budget.

In sum, COA said all five phases failed to undergo a competitive public bidding as required under the Government Procurement Reform Act, while the payments of reported accomplishments of Hilmarc's were not supported by available funds and supporting documents.

Phases 1 to 4 also had fake Invitations to Apply for Eligibility and to Bid published in newspaper Balita.

Architecture, design phase

Meanwhile, COA issued the second ND for the P11.97 million contract for the architectural and engineering services of MANA Architecture and Interior Design Co.

The COA said the contract is “not covered with an appropriation, awarded through simulated bidding and payments thereof were not supported with the documents and information required by applicable law, rules and regulations.”

It further said the bidding for the contract was marred with irregularities since it was done through a simulated bidding so the city government can award the project to MANA via a negotiated procurement.

“Procurement of (Architectural and Engineering) Services was done through negotiated procurement despite the absence of the conditions to warrant resort to this alternative mode in violation of Section 53, Rule 16 of RA 9184 (Government Procurement Reform Act),” COA said.

The Binays are already facing multiple criminal charges at the Sandiganbayan in connection with the allegedly anomalous project.

Denied due process

Meanwhile, Binay spokesperson Joey Salgado said both father and son intend to appeal the COA findings which he claimed was already included in the charges against them by the Office of the Ombudsman.

“The COA only started singing a different tune - in effect questioning the competence of its own people- when the previous administration began its political demolition work on former VP Binay and his family,” Salgado said in a statement.

He said COA also denied the Binays of due process when it issued the ND without giving seeking their response.

“The COA denied former VP Binay and former mayor Junjun their basic right to due process when it issued the fraud audit report without giving them the opportunity to respond to the  Notice of Disallowance. Until and after their appeal of the disallowance is resolved, the fraud audit report cannot be enforced by COA,” Salgado said.  — RSJ, GMA News