Case Digest: OLAGUER v DOMINGO

OLAGUER v DOMINGO

FACTS

As a government corporation, National Home Mortgage Finance Corporation (NHMFC) provides home financing to people in the lower income bracket. Under its authority, the Community Mortgage Program (CMP) was introduced to assist residents of blighted areas to own the lots they occupy or the lots where they shall be relocated through low income financing. Petitioners are all career service professionals of NHMFC, while respondents are officers of COA. Upon request of Pajaron (GM of Gonzales Construction Co), Home Insurance Guaranty Corporation (HIGC) conducted an appraisal of the property in Angeles City for community mortgage purposes. It found that the land is valued at P60/sqm or P600K/ha. Sapang Palay Community Development Foundation (SPCDFI), serving as a link between community-based orgs and NHMFC, applied with the latter for a Purchase Commitment Line of P91M to cover various CMP projects, including an application for a P34M loan by AMAKO, a sub-federation of SPCDFI. However, this application was not acted upon due to incomplete requirements. Nelson Concepcion, as President of SPCDFI, applied with NHMFC for accreditation as originator of land and housing projects through a Purchase Commitment Line, which embraced several project sites including the land in Angeles City (AMAKO Project). Meanwhile, Task Force on CMP was created within the NHMFC, where Olaguer was appointed as its head, Salvador as its Executive Assistance and Fuentes as its Unit Head, Documentation and Processing Unit to act upon the loan applications in connection with community mortgage purposes. AMAKO submitted another application for accreditation with the NHMFC with an increase in the loan from P34M to P36.8M. APED (Accreditation and Project Evaluation Department) of NHMFC recommended the approval of the AMAKO Project and the grant of a loan of P36.8M. Consequently, the NHMFC Board approved the recommendation. Thereafter, the CMP Task Force (Olaguer et al) conducted an investigation of AMAKO, where it found several problems regarding the site—non-existence of right of way, lack of public transportation, charging of beneficiaries beyond the actual cost incurred, land being an interior lot. NHMFC resident auditor, Razon (another respondent), conducted an audit and disallowed in the audit the loan of AMAKO (however, the loan was already released by NHMFC) due to non-compliance with the requirements/documents to be submitted and irregular and excessive expenditures. Moreover, he found the petitioners, as officers of NHMFC, liable for the release of the loan.

ISSUE

Whether or not respondents (COA officers, NHMFC resident) gravely abused their discretion in affirming the audit disallowance where petitioner, as officers of NHMFC, were found liable for the loan of P36.8M to SPCDFI-AMAKO.

HELD

NO. Petitioners were the officers directly charged with the power of processing, reviewing and evaluating CMP loan documents, where the AMAKO Project was deemed included (community mortgage purposes). In its exercise of the power to process, review, and evaluate CMP loan applications, petitioners had the power to compel submission of documentary requirements such as the Lease Purchase Agreement (LPA) and the reproduction of the Affidavit of Income of Beneficiaries. They also had the power to conduct surveys and ocular inspection on the property. However, they were remiss of their obligations to do so. As instructed by the NHMFC President to conduct such activities, Olaguer did not send anyone to verify the lack of a road right of way and other characteristics essential to the viability of the project.  Notably, despite non-compliance with the requirements, AMAKO’s application was approved by APED in a span of only 3 days. PD 1445 (Government Auditing Code of the Philippines), Sec. 103 states that “Expenditures of government funds or uses of government property in violation of law or regulations shall be a personal liability of the official or employee found to be directly responsible therefore.”