JOSON III v.

COMMISSION ON AUDIT

G. R. No. 223762, 7 November 2017

En Banc

Tijam, J.

A Special Audit Team (SAT) of the COA conducted an audit of an

award made by the Province of Nueva Ecija for the construction

of the Friendship Hotel to A.V.T. Construction (A.V.T.).

Thereafter, the SAT issued a notice disallowing the payments

made to A.V.T.

SAT held petitioner in his capacity as provincial governor liable

for entering into the contract with A.V.T. and for approving the

payment vouchers to the latter despite the absence of the

eligibility documents of A.V.T. The COA held petitioner liable and

alleged that petitioner is presumed to know the infirmity of the

contract.

Did COA gravely abused its discretion in holding

petitioner liable for the disallowance?

Yes. COA gravely abused its discretion when its judgment

rendered is not based on law and evidence. Under, R.A. No.

9184, the presence of the eligibility documents for

pre-qualification are the obligations and duties of the Bids and

Awards Committee (BAC). The absence of such documents are

the direct responsibility of the BAC. Petitioner cannot therefore

be held liable for its absence.

Is petitioner presumed to know the infirmities of the

contract?

No. Mere signature does not result to a liability of the official

involved without any showing of irregularity on the document's

face. Moreover, petitioner can invoke the Arias Doctrine where

the Court held that all heads of offices have to rely to a

reasonable extent on their subordinates and on the good faith.

In the present case, there was no other evidence that was

presented to show that petitioner had actual prior knowledge of

the ineligibility of A.V.T. Furthermore, it would be

counterproductive to require petitioner to meticulously examine

each document that passes his office considering that he is the

head of the province. Hence, petitioner, in good faith, have to

rely on his subordinates.

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