DECISION NO.

2014-139
July 18, 2014

Subject: Motion for Reconsideration of Engr. Rogelio K. Pangan, General Manager, Manolo
Fortich Water District, Manolo Fortich, Bukidnon, of Legal Retainer Review No.
2010-008 dated January 20, 2010

DECISION

FACTS OF THE CASE

Before this Commission is the Motion for Reconsideration (MR) dated July 9, 2010 of General Manager (GM) Rogelio K.
Pangan of Manolo Fortich Water District (MFWD), Manolo Fortich, Bukidnon, of Legal Retainer Review (LRR) No. 2010-008
dated January 20, 2010, pursuant to Section 3, Rule VIII of the 2009 Revised Rules of Procedure of the COA.

Records show that a Retainership Contract was entered into on September 24, 2009 between MFWD, represented by GM
Pangan, and Atty. Florencio A. Narido, Jr., for the latter to act as MFWD’s legal retainer for a period of one (1) year effective
January 1, 2009.
In LRR No. 2010-008, this Commission, through the General Counsel, concurred in the contract, subject to the following
conditions:
1. Reduction of the monthly retainer fee of P7,000.00 to P5,000.00 and deletion of the ceiling on the number of
documents to be notarized by the retainer;

2. Reduction of the appearance fee of P3,000.00 for hearings within and outside the Province of Bukidnon to
P1,500.00, as the former amount appears excessive compared to appearance fees under similar contracts;

3. Deletion of the provision of Section 2 of the contract, which requires payment to the legal counsel of notarial
fees by MFWD’s clients because third parties are not covered by the COA concurrence; and

4. Deletion of the provision of Section 2 on the collection of attorney’s fees for unpaid accounts submitted to the
counsel for collection at the rate of not more than 10% of the amount of the bills actually collected for his
services which amount shall be charged to the account of the district’s clients since the receivables are
accounted for as government funds and cannot be subject to deductions, liens or contingencies.

In the herein motion, GM Pangan requested for the reconsideration of LRR No. 2010-008, positing the following grounds:
1. The notice of disapproval of the aforementioned provisions in the Retainership Contract was given to MFWD
so late that such contract had already expired six (6) months earlier and had already been fully implemented by
MFWD, except the provision on collection fee of not more than 10% of the bills collected through the
attorney’s services;

2. The retainer fee and appearance fee subject of the disapproval are reasonable and not excessive, extravagant or
unconscionable; and

3. The notarial fees for contracts notarized by the retainer are not paid with public funds but with private funds of
MFWD’s clients.

The Supervising Auditor of MFWD, in his 1 st Indorsement dated October 11, 2010, found the above contentions
reasonable. The MR was returned to the Regional Director, COA Regional Office No. X, who, in his 2 nd Indorsement dated
October 21, 2010, forwarded the MR to the Office of the General Counsel.

ISSUE
The issue to be resolved is whether or not the instant MR is impressed with merit.

DISCUSSION
This Commission finds the instant MR bereft of merit.

The delay in the issuance of the subject LRR cannot be faulted on this Commission, since the request for COA’s
concurrence was made only on October 12, 2009 despite the retainership’s stipulated effectivity on January 1, 2009. MFWD
should have filed a request earlier than October 12, 2009, or in the strict sense, prior to the hiring of the legal retainer on January
1, 2009. COA Circular No. 95-011 dated December 4, 1995 is instructive:

In the event that such legal services cannot be avoided or is justified under extraordinary or exceptional
circumstances, the written conformity and acquiescence of the Solicitor General or the Government Corporate
Counsel, as the case may be, and the written concurrence of the Commission on Audit shall first be secured
before the hiring or employment of a private lawyer or law firm. (Emphasis supplied)

The requirement of a prior written concurrence of the COA was upheld by the Supreme Court in the cases of Polloso vs.
1 2
Gangan, et al. and Phividec Industrial Authority, et al. vs. Capitol Steel Corporation, et al.

Similar contracts that COA earlier concurred in were used as benchmarks in the determination of reasonableness of
lawyer’s fees. Comparison with the following clearly shows that the retainer and appearance fees in the subject contract are
excessive:
 Name of Water District Monthly Retainer Fee Appearance Fee
Valencia City Water District P5,000.00 P1,000.00 and P1,500.00
for every hearing attended
within and outside Valencia
City, respectively
Misamis Occidental Water P5,000.00 P500.00 and P1,000.00 for
District every hearing attended
within and outside Misamis
Occidental
Digos Water District P5,000.00 P1,000.00 and P1,500.00
for every hearing attended
within and outside Digos,
respectively
Dipolog City Water District P3,000.00 P300.00 and P700.00 for
every hearing attended
within and outside Dipolog
City, respectively
Metro Cotabato Water P2,000.00 P500.00 and P1,000.00 for
District every hearing attended
within and outside Cotabato
City, respectively

Thus, this Commission finds no reasonable ground to reconsider the reduction of the retainer and appearance fees of Atty.
Narido. This Commission also sustains the deletion of the notarial fees on the same grounds stated in LRR No. 2010-008.

RULING
WHEREFORE, this Commission hereby DENIES the instant Motion for Reconsideration of Engr. Rogelio K. Pangan,
General Manager, Manolo Fortich Water District, Manolo Fortich, Bukidnon. Accordingly, Legal Retainer Review No. 2010-008
dated January 20, 2010 is AFFIRMED.

(SGD.) MA. GRACIA M. PULIDO TAN

Chairperson

(SGD.) HEIDI L. MENDOZA (SGD.) JOSE A. FABIA

Commissioner Commissioner

ATTESTED BY:

(SGD.) NILDA B. PLARAS

Director IV
​Commission Secretariat

Copy furnished:
Engr. Rogelio K. Pangan
General Manager
Manolo Fortich Water District
Manolo Fortich, Bukidnon
The Supervising Auditor
Manolo Fortich Water District
Manolo Fortich, Bukidnon
The Regional Director
COA Regional Office No. X
Cagayan de Oro City
The Director
Information Technology Office
Administration Sector
The Assistant Commissioners
Legal Services Sector
Local Government Sector
All of this Commission

LSS/LAO
ESZ/FED/JSE/JHG/KSD/(EAP)
1 G.R. No. 140563, July 14, 2000
2 G.R. No. 155692, October 23, 2003