A.M. No.

12-6-18-SC, August 07, 2018 On December 21, 2005, or shortly after his assumption of office, Chief
Justice Panganiban announced his "judicial philosophy of safeguarding
RE: CONTRACTS WITH ARTES INTERNATIONAL, INC. the liberty and nurturing the prosperity of the people under the rule of
law."3 Conformably with his philosophy, the National Forum and the
RESOLUTION Global Forum were conceptualized and launched.

BERSAMIN, J.: In planning for the National Forum and the Global Forum, Ad Hoc
Committees whose memberships consisted of officers and employees
of the Court's various offices were created. It appears, however, that
We hereby consider and resolve the issues pertaining to the matters
the PMO further engaged an event organizer to assist the Ad Hoc
covered by the Report of the Office of the Chief Attorney dated June
Committees. Ms. Dumdum expressly confirmed so Memorandum PMO
20, 2012 (Report) on the Court's several contracts with Artes
JRPAO 09-14-2007: 
International, Inc. (Artes) that Ms. Evelyn Toledo-Dumdum (Ms.
Dumdum) entered into as the Administrator of the Court's Program
Management Office (PMO) relative to the following events and 2.2 To assist the Ad Hoc Committees, specifically by addressing the creative,
activities, namely:  logistical, physical and technical requirements of the Forum, the services
of an event specialists (sic), namely, Artes International, Inc. was
1. National Forum on Liberty and Prosperity (National Forum) engaged based on the lowest responsive canvass made by this Office. Artes
held on August 24-25, 2006 at the Manila Hotel;  was the same events specialist engaged during the conduct of the International
Conference and Showcase on Judicial Reforms (ICSJR) held last November
2005.4
2. Global Forum on Liberty and Prosperity (Global Forum)
undertaken on October 18-20, 2006 at the Makati Shangri-La
Hotel, Makati City; and  The following matters were further spelled out in the certification
dated November 23, 2006 issued by the PMO, signed by Dennis
3. Other activities relative to the retirement of Chief Justice Russel D. Baldago, Chief Judicial Staff Officer of the PMO and Vice-
Artemio V. Panganiban (Chief Justice Panganiban) consisting Chairperson of the Forum Secretariat; and Dennis T. Velasco, Logistics
of: (a) Musical Interlude at the Cultural Center of the Management Officer V of the PMO; and noted by Ms. Dumdum, as
Philippines on November 30, 2006; (b) Commemorative follows:
Program on December 6, 2006 at the Fiesta Pavillon, Manila
Hotel; (c) Retirement ceremonies on December 6, 2006 at the This is in relation to the services rendered by Artes International, Inc.
Supreme Court Hall; and (d) the Celebration of the Life, Love for the Global Forum on Liberty and Prosperity held last October 18-
& Achievements of Chief Justice Panganiban Event at the Pan 20, 2006 at the Makati Shangri-La Hotel, Philippines. 
Pacific Hotel on December 7, 2006. 
The evolving requirements for the creative, physical and
The Office of the Chief Attorney submitted the Report in compliance technical aspects of the Global Forum were finalized
with the instruction of the Court's Management Committee for the only  after  the conduct of the Academic and National Forum on
Judicial Reform Support Project (JRSP) at its April 24, 2012 meeting in Liberty and Prosperity last July 20 and August 24-25,
Baguio City to "summarize [the] facts on the circumstances with Artes 2006 respectively, barely eight (8) weeks or two (2) months to
International, Inc. (Artes)."1 The Report was based on the files prepare for an international conference which will be participated (sic)
submitted by the PMO to the Management Committee in said meeting, by Chief Justices and Judges from ninety five (95) countries,
as well as on the twin studies the OCAt had previously conducted on delegates from the executive and the legislative departments of
the Artes matter.2 government, international development agencies, members of the
diplomatic corps, judicial institutes, leaders of the foreign academe,
Antecedents
international bar associations, foreign business chambers and civil of P19,320.00. Ms. Dumdum affixed her signature beneath the
society.  word Conforme. The disbursement voucher for the total amount of
P180,320.00 was prepared and the amount was charged to the SC-
Thereafter, the PMO solicited three (3) canvasses, requested JRSP WB LOAN with the recommending approval of Ms. Dumdum. 
authorization from the Chief Justice to fund various activities during
the Global Forum, and prepared the necessary Job Order to address (3) The quotation offer dated August 1, 2006 signed by Ms. Dabao
the abovementioned requirements. The service provider with the offering the services of Artes for the audio-visual presentation
lowest responsive proposal was also the same service provider during entitled Blueprint for Change, with 10 pieces of DVDs as deliverables,
the International Conference and Showcase on Judicial Reforms held at the cost of P666,261.12, inclusive of VAT amounting to P71,385.00.
last November 28-30, 2005 at the Makati Shangri-La Hotel. Ms. Dumdum affixed her signature to the quotation offer beneath the
word Conforme. Based on the disbursement voucher, the VAT was
This is to further certify that there are limited providers for the again increased to P118,975.20, such that the amount of Check No.
abovementioned requirements of the Global Forum. 24691 issued on September 25, 2006 payable to Artes became only
P547,285.92, which was paid to Artes on September 27, 2006. The
disbursement voucher indicated that Ms. Dumdum recommended the
This Certification is issued at the request of Mrs. Adoracion Yulo, SC
expenditure to be charged to the SC-JRSP WB LOAN. 
Chief Judicial Staff Officer, Finance Division and Ms. Lilianne E.
Ulgado, Chief Accountant, Accounting Division. 5
(4) The letter-contract between Ms. Dumdum and Ms. Dabao (for
Artes) entered into on August 10, 2006 for the Conference Proper of
The services of Artes were extended to other activities related to the
the National Forum. The letter-contract, written on the stationery of
retirement of Chief Justice Panganiban on December 6, 2007. 
Artes, provided: 

1. 
10 August 2006 
The National Forum and the Global Forum

EVELYN TOLEDO-DUMDUM
The PMO first engaged the services of Artes for the International
Program Director
Conference and Showcase for Judicial Reform (ICSJR) in 2005. Based
Program Management Office
on the records, the OCAt found that Ms. Dumdum as the
6th Floor Centennial Bldg.
Administrator of the PMO entered into the following contracts with
P. Faura Street, Ermita
Artes, represented by its Executive Producer Helen R. Dabao (Ms.
Manila
Dabao), and directly took part in authorizing several disbursements,
as follows: 
Dear Ms. Dumdum, 
(1) The letter-contract signed on July 18, 2006 by Ms. Dumdum and
Ms. Dabao for two logo designs at the total cost of P53,200.00, Thank you for considering us to be able to serve your event
inclusive of VAT of P5,700.00. The disbursement voucher showed that requirements for the following: 
the VAT was increased to P9,500.00. Check No. 24690, which was
eventually issued to Artes on September 25, 2006, indicated only the Event Title: National Forum on August 24 & 25, 2006
amount of P43,700.00, which was charged to the SC-JRSP WB "Prosperity & Liberty: Goals of Judicial Reforms" 
LOAN. 
Venue: Manila Hotel, Centennial Hall 
(2) The quotation offer dated August 1, 2006 signed by Ms. Dabao
offering the services of Artes to undertake the video coverage of the    
National Forum for the total amount of P180,320.00, inclusive of VAT
 Particulars:  Conference Proper Requirements Please find attached the Budget Breakdown x x x of the total
package cost of the project. 

I. Physical/Creative/Technical Management of the TERMS:

National Forum at Manila Hotel on August 24 &
25, 2006.
50% downpayment to be paid upon signing of conforme. 

Please be assured that Artes International, Inc. shall render the same
50% balance to be paid upon completion of the project. 
quality work as the past ICSJR conference if not even more efficiently
and professionally. We look forward to working with you again in this
conference.  Termination of contract after signing is subject to 50% fee of the
total project cost
The following are areas that were discussed and agreed upon: 
Additional requirements shall be charged accordingly. 

1. That Artes shall provide script for your guidance;  Quoted price is valid only until 18 August 2005.
2. That your office shall provide all Emcees for the said events;
Note: Please make cheque payable to Artes International, Inc.
3. That you are requiring video coverage of the event; and
We look forward to working with you. Should you have any questions
4. That Helen Dabao, Executive Director of Artes International, Inc. shall oversee and concerns, please do not hesitate to get in touch with us.
the execution, coordination and supervision of the conference proper on August
24 & 25, 2006; 8am to 5pm. Our services include the following:
Thank you very much for giving us the opportunity to offer our
1. Provision of creative, production and technical staff with HELEN R. services. 
DABAO as Over-All Director and Executive Producer; other areas of
concern Again thank you and more power to you and your office.

2. Provision of production staff to include Technical Director, Lights

Director, Writers, Production Manager, Stage Managers, Production SUPREME COURT OF THE
Assistants, technical crew and utility men; ARTES INTERNATIONAL, INC.
PHILIPPINES

3. Provision of lights & sound system, the screen/projector at the By: By:
Centennial Hall and Backdrop bearing the official logo. Artes shall
manage all coordination & supervision of the venue needed for the    
conference except booking guests and participants at the hotel.
   

For and in consideration of the above services ARTES (Sgd.) (Sgd.) 

INTERNATIONAL, INC. submits a package cost of all requirements in HELEN R. DABAO EVELYN TOLEDO-DUMDUM
the Conference Proper amounting to NINE HUNDRED NINETY Managing & Creative Director Program Director 
EIGHT THOUSAND EIGHT HUNDRED FIFTY FOUR & 78/100
PESOS (PhP998,854.78)
The disbursement voucher shows that Ms. Dumdum recommended
approval of the payment in the amount of P998,854.78 charged to the
"SC-JRSP WB LOAN."6
(5) About August 12, 2006, Ms. Dabao offered to supply 350 pieces of 50% balance to be paid upon completion of project. 
conference bags at P450.00/piece for a total of P176,400.00, inclusive
of the P18,900.00 VAT, and 900 pieces of ID holder at P95.00/piece Termination of contract after signing is subject to 50% fee of the
for the total price of P95,760.00, inclusive of the P10,260.00 VAT. The total project cost. 
disbursement voucher disclosed that the total sum of P272,160.00 for
the offered articles was charged to the SC-JRSP WB LOAN and
Additional requirements shall be charged accordingly. 
the JRSP (WB)-GOP Counterpart Funds in the respective amounts
of P243,160.00 and P29,160.00. Artes issued a "Sales Invoice"
dated August 12, 2006 for both articles.7 Quote price is valid only until 18 August 2006. 

(6) The letter-contract written on the stationery of Artes and signed NOTE: Please make cheque payable to Artes International, Inc.8
on August 14, 2006 by Ms. Dumdum constituted the contract for
services for the Closing Ceremonies of the National Forum held on The OCAt noted that the disbursement voucher for the expenditure
August 24-25, 2006. The pertinent portions of the letter- was not among the records turned over by the PMO. 
contract stated: 
(7) The letter-contract for the "Welcome Dinner" was signed by
The following are areas that were discussed and agreed upon: Dabao and Ms. Dumdum on August 15, 2006. It had similar text as
the letter-contract for the "Closing Ceremony," viz.: 
1. That we will provide script for your guidance; 
The following are areas that were discussed and agreed upon:
2. That your office will provide all Emcees for the said events; 

3. That you are requiring video coverage of the event; and 1. That we will provide script for your guidance;

4. That Helen R. Dabao, Managing & Creative Director of Artes International, 2. That your office will provide all Emcees for the said events;
Inc. shall oversee the execution, coordination and supervision of the said event.
Our services include the following: 3. That you are requiring video coverage of the event;

a. Provision of production staff to include a Technical Director, Lights 4. That Helen R. Dabao, Managing & Creative Director of Artes International,
Director, Writers, Production Designer, Production Manager, Stage Inc. shall oversee the execution, coordination and supervision of the said event.
Managers, Production Assistants, technical crew; Our services include the following:

b. Provision of lights and sound system for the Closing Ceremony.  a) Provision of production staff to include a Technical Director, Lights
Director, Writers, Production Designer, Production Manager, Stage
Managers, Production Assistants, technical crew and utility men;
For and in consideration of the above services ARTES
INTERNATIONAL, INC. submits a package cost of all requirements in b) Provision of lights & sound system & Backdrop
the CLOSING CEREMONY amounting to SIX HUNDRED NINETY ONE
c) Provision of food for staff and production people; and
THOUSAND ONE HUNDRED EIGHTY NINE & 04/100 (PhP691,189.04) 
d) Artes shall manage all coordination with the venue needed for the said
TERMS:  event.

50% downpayment to be paid upon signing of conforme.

For and in consideration of the above services ARTES
INTERNATIONAL, INC. submits a package cost of all requirements in
the WELCOME DINNER amounting to NINE HUNDRED SEVEN Name of Bidders Price Compliance to REMARKS
THOUSAND SEVEN HUNDRED SEVENTY SIX & 41/100 PESOS Proposal  Minimum 
(Php907,776.41) (in PHP)  Terms of
Reference
TERMS:
ARTES 35,224.00 Comply Recommended for
INTERNATIONAL  Award
50% downpayment to be paid upon signing of conforme. 
OFFICEMAN 38,640.00 Comply
50% balance to be paid upon completion of the project.
CHATESU 39,480.00 Comply
MANUFACTURING 
Termination of contract after signing is subject to 50% fee of the
total project cost. 
     

Additional requirements shall be charged accordingly. Canvassed by:  Recommended by:  Approved by:
(Sgd.) (Sgd.) DENNIS RUSSEL (Sgd.)
Quoted price is valid only until 18 August 2006. MA. CRISTINA M. D. BALDAGO EVELYN TOLEDO-
AGUILAR Chief Judicial Staff Officer  DUMDUM
Technical Assistant  Judicial Reform Program
NOTE: Please make cheque payable to Artes International, Inc. Administrator10

A disbursement voucher for the two letter-contracts in the total

amount of P1,598,965.46 chargeable to the "SC-JRSP WB LOAN" As the winning and awarded bidder, Artes, through Ms. Dabao,
was thereafter prepared. Dumdum affixed her signature thereon to entered into the "Quotation Contract" dated August 14, 2006 and
indicate her recommendation for said disbursement. 9 written on its stationery. Ms. Dumdum affixed her signature above her
printed name and beneath the word Conforme.
(8) Through an undated Abstract of Bids, the PMO conducted a
canvass for other items intended for the National Forum, and Artes The OCAt observed that "canvass #1" was handwritten instead of the
emerged as the "winning bidder" in that canvass.  date below the word Conforme. The "Quotation Contract'' was for
the supply of: (a) 25 pieces of jewelry boxes (tokens for the panelists)
for P17,500.00; and (b) 450 pieces of ball pens (for the conference
The Abstract of Bids is quoted below:  kits) for P13,950.00, at the total contract price of P35,224.00,
including the 12% VAT of P3,774.00. The copy of the corresponding
SUPREME COURT disbursement voucher for the "Quotation Contract" indicated that
PROGRAM MANAGEMENT OFFICE the expenditure was charged to JR - ( ) - Counterpart Funds. Ms.
NATIONAL FORUM ON LIBERTY AND PROSPERITY Dumdum affixed her signature on the disbursement voucher to
ABSTRACT OF BIDS recommend her approval thereof. 

SOUVENIR ITEMS FOR SPEAKERS & PANELISTS; AND PENS DURING THE The OCAt further observed that it was only on August 18, 2006 that
NATIONAL FORUM ON LIBERTY AND PROSPERITY Ms. Dumdum recommended the approval of the budget of
P7,500,000.00 for the National Forum to be charged "against the JRSP
funds." The recommendation of Ms. Dumdum was received by the
  Office of Chief Justice Panganiban at 10:00 a.m. on August 22, 2006,
and he affixed his signature on the same day to indicate the approval
of the recommendation. After the National Forum, preparations were 2. That your office shall provide all Emcees for the said events;
made for the Global Forum.
3. That you are requiring video coverage of the event; and 
(9) The letter-proposal for technical services and equipment rental
for the Global Forum submitted on September 16, 2006 by Ms. Dabao. 4. THAT Helen R. Dabao, Executive Director of Artes International,
Ms. Dumdum affixed her signature under the word Conforme for the Inc. shall oversee the execution, coordination and supervision of the
following items and corresponding costs, including the rentals:  conference proper on October 18-20; 8am to 5pm. Our services
include the following: 
ITEM #1-2 PROFESSIONAL CONFERENCE SYSTEM
A.) Provision of creative, production and technical staff with HELEN R. DABAO
      as Over-all Director and Executive Producer; other areas of concern such as
the secretariat, logistics & security, protocol, registration & documentation
BRAHLER DIGIMIC CONFERENCE MICROPHONES P370,000.00 and the like are under the management of PMO.
with 40 units Microphones
B.) Provision of production staff to include Technical Director, Lights Director,
BRAHLER SIMULTANEOUS INTERPRETATION 380,000.00 Writers, Production Manager, Stage Managers, Production Assistants,
with Portable Interpreters' Booth+Console System technical crew and stage hands;
for FOUR (4) LANGUAGE TRANSLATIONS __________
C.) Provision of lights & sound system, the screens/projectors at the Rizal
Oakage Price (sic)    750,000.00 Ballroom and Backdrop bearing the official logo and other non-technical
requirements needed in the conference proper.
Management Fees (17.65%)    132,375.00
D.) Manage all coordination & supervision of all venue preparations needed for
Total Package Price    P882,375.00 the conference except booking guests and participants at the hotel.

12% Value Added Tax   105,885.00 E.) Over-all direct the proceedings of the conference according to the approved
program.
TOTAL PACKAGE PRICE   P988,260.0011

For and in consideration of the above services ARTES

(10) On September 21, 2006, Ms. Dabao sent Ms. Dumdum INTERNATIONAL, INC. submits a package cost of the above
a quotation letter for Conference Proper requirements at the Conference Proper amounting to NINE
Requirements expressing gratitude for considering Artes to serve the HUNDRED NINETY SEVEN THOUSAND THREE HUNDRED FIFTY
event, the Global Forum, on October 18-20, 2006 at the Shangri-La ONE 99/100 PESOS (PhP997,351.99).
Makati Hotel. The pertinent portions of the quotation letter ran as
follows: 
Please find attached the Budget Breakdown (See Attachment
A) of the total package cost of the project.
I. Physical/Creative/Technical Management of the GLOBAL
FORUM CONFERENCE PROPER. 
TERMS:

The following are areas that were discussed and agreed upon: 
50% down payment to be paid upon signing of conforme. 

1. That Artes shall provide script for your guidance

50% balance to be paid upon completion of the project. 
Termination of contract after signing is subject to 50% fee of the 9. Gen Set
total project cost.
     
Additional requirements shall be charged accordingly.
II.  Talents:  
Note: Please make cheque payable to Artes International,
     
Inc. (emphasis supplied.)12
  a) 30 Cadets with Special Uniforms  PhP 80,000.00
Ms. Dabao and Ms. Dumdum signed the quotation letter. b) 20 pc. Marching Bands (sic) 50,000.00
c) 20 pc. Banda Kawayan  45,000.00
d) 40 pc. Bayanihan Dancers  100,000.00
(11) The letter-contract written on the stationery of Artes for the
e) Withholding Tax 10% 27,500.00
opening ceremony and welcome lunch for the Global Forum was
signed on September 26, 2006 by Ms. Dumdum and Ms. Dabao. Its        
pertinent portions said: 
III.  Technical/Prod./Creative Staff  PhP205,000.00
The following are areas that were discussed and agreed upon: 
       

1. That Artes shall provide script for your guidance; IV. Other Requirements:    

2. That your office shall provide all Emcees for the said events;        

3. That you are requiring video coverage of the event; and   Food & Drinks for 110 talents and participants    

4. That Helen R. Dabao, Executive Director of Artes International, Inc. shall   Breakfast & Lunch (Php 175.00/pax)  PhP 19,250.00  
oversee the execution, coordination and supervision of the OPENING Misc. & Contingencies 15,000.00
CEREMONY & WELCOME LUNCH of the Global Forum on October 18,
2006 at Makati Shangri-la Hotel.      

    TOTAL PACKAGE COST (I, II, III, IV.) PhP744,750.00  

I.  Technical Requirements:      

    Management Fees (17.65%) 131,448.38  

  1. Additional Sound & Lights for the Entrance Php25,000.00      

of Color 45,000.00
2. Complete Lights & Sound System at 30,000.00 12% VAT 105,143.81   
Quezon Ballroom 6,000.00
3. 10 sets 2-Way Radio (3 day conference) 15,000.00        
4. 2 Sets of Spot lights (frontal for Parade) 30,000.00
5. Additional Camera w/ Camera man 25,000.00 GRAND TOTAL OF PACKAGE  
6. Backdrop for the Quezon Ballroom 12,000.00  COST--------PHP981,342.1813
7. 2 sets LCD Projectors/Screens 15,000.00
8. Raw materials (mini-dvd tapes) 
(12) The letter-contract printed on Artes' stationery signed on Bank) by our development partners.
September 26, 2006 by Ms. Dabao and Ms. Dumdum to provide
creative, technical and physical management for the closing ceremony    
of the Global Forum at the cost of P789,290.32.
3. In case of the JRP-FA Funds, may we request for Your Honor's approval to
The OCAt noted, however, that it was only on October 9, 2006 when disburse these funds for the various expenditures related to the Global Forum,
Ms. Dumdum requested authority to fund the Global Forum, as borne subject to the usual accounting and auditing rules and regulations.
out by MEMORANDUM PMO JRPAO 10-09-2006, the relevant issuance,
4. We are pleased to report to your Honor that possible additional new funding
to wit: 
support may come from AusAID, British Council, KAS and the UNDP.

Your honor:  5. For your Honor's kind consideration and approval, please.14

1. The estimated budget for the conduct of the Global Forum on Liberty and On October 10, 2006, Chief Justice Panganiban affixed his signature to
Prosperity on October 18-20, 2006 at the Makati Shangri-La Hotel is Twenty approve Ms. Dumdum's request. 
Million Six Hundred Thousand Pesos (Php20,600,000.00).

2. Of this Php20.6M estimated budget, funding support will come from our On October 13, 2006, Ms. Dumdum sought the authority from Chief
various development partners in the form of grant proceeds as follows: Justice Panganiban "to process payment for services rendered of (sic)
contractors" at the Global Forum. Her memorandum for that purpose
    was as follows: 

Amount of Funding  Your Honor:

Development Partner 
Support (in PhP) 

JRP-FA Funds (Grant Proceeds). This represents 1. This is in relation to our Memorandum requesting authority to fund the Global
17,000,000.00 Forum on Liberty and Prosperity on October 18-20, 2006 at the Makati
the cumulative unused balance of previous years
Shangri-la Hotel which was approved by Your Honor. Copy of the approved
Memorandum is attached for Your Honor's reference.
500,000.00 ABA-Asia (new/incremental funds)
2. In this connection, may we also request for Your Honor's approval for partial
payment for the following contractors of the Forum:
  1,200,000.00 ADB (new/incremental funds)
   
300,000.00 CIDA (new/incremental funds)  
Makati Shangri-La Hotel Accommodation and Function
5,331,143.50
Rooms
400,000.00 TAF (new/incremental funds)
   

400,000.00 WB (new/incremental funds)  Cultural Center of the Philippines

   
   
  Production and Artist  517,158.40
These new incremental funds will be administered (with the exemption of the World
 taxes, leaving the net amount of P2,300,484.80 as partial
    paymentto Artes in connection with the Global Forum. The gross
amount of P2,875,606.01 was broken down thusly: 
Goldcraft and Fashion International 

    * Physical, Creatives and Technical Management P498,676.00 

Barong Tagalog for Foreign Delegate; Uniforms

  698,320.00 * Global Forum AVP and Book Launching AVP 498,741.88
for Choir, Secretariat and Ushers

    *Simultaneous Interpretation System (SIS) 494,130.00

Artes International, Inc. *Audiovisual Equipment Rental and Video Coverage 498,741.88
   
* Opening Ceremony 490,671.09 
Physical, Creative and Technical Management  997,351.99 
* Closing Ceremony 394,645.16
Global Forum AVP and Book Launching AVP  997,483.76 
TOTAL P2,875,606.0116
Simultaneous Interpretation System (SIS)  988,260.00 
Check No. 29454 for the total net amount of P2,300,484.81 was
 
Audiovisual Equipment Rental and Video 997,483.76  issued to Artes on December 5, 2006 as final payment for the
Coverage production of the Global Forum. Artes received the check on the
981,342.18  following day.
Opening Ceremony
789,290.32 Subsequently, the OCAt noted then Chief Accountant Lilian Ulgado's
Closing Ceremony  Memorandum dated February 27, 2007 addressed to the PMO Finance
Division about the claim by the Makati Shangri-la Hotel for the unpaid
Forum Collaterals (Kits, IDs, Pens, Souvenir and amount of P651,000.00. The pertinent portion of the Memorandum
  693,626.75
Shell Leis) was as follows: 

    Per our records, the total claim of Makati Shangri-La was already

paid in full per voucher 06-11-33736. Please attach an
3. For Your Honor's kind consideration and approval, please. 15 explanation why there is still an (sic) remaining balance of
P651,000.00.

Chief Justice Panganiban affixed his signature on October 16, 2006 at

the lower left corner of the memorandum to signify approval of the Also, it appears that there is no basis in paying the said remaining
request for authority to process partial payments for expenses balance of P651,000.00. Please attach authority to pay the said
incurred during the Global Forum.  amount and charging it to Fiscal Autonomy.

(13) Ms. Dumdum signed a disbursement voucher around October Further, in going over the supporting papers of the full payment to
16, 2006 charging to the JRP(FA)-GOP COUNTERPART FUNDS the Makati Shangri-La per voucher 11-33736, we noted that the Court
gross amount of P2,875,606.01, less the sum of P575,121.20 as paid for the accommodation of Ms. Helen Dabao in Room Nos.
512 and 516. In the Articles of Incorporation submitted to this office,
Ms. Helen Dabao is listed as one of the incorporators of Artes
International. Is Ms. Dabao a participant to the said event? Is (sic) so, 2. State of the Judiciary (Audio-Visual Production) 470,400.00
please attach copy of memo circular of those who are authorized to
attend the Global Conference showing the inclusion of Ms. Dabao in 3. Leadership and Servanthood: The Labor and 650,000.00
the said list. (Emphasis supplied)17 Legacy of Chief Justice Artemio v. Panganiban
(Audio-Visual Production)

In her responding Memorandum dated February 28, 2007, PMO TOTAL 1,671,936.00
Financial Management Analyst Paula Cheryl Dumlao expressed that
because the hotel accommodations for Ms. Dabao were being
2. Should your Honor concur, may we request that the abovementioned amount
questioned, the expenses therefor should be treated as a "disputed
be charged to the JRP FA (Grant Proceeds), subject to the usual accounting
item" that could be excluded from the bill to avoid further delays in and auditing rules and regulations.
the settlement of the obligations to Makati Shangri-La Hotel.
   
Thereafter, Chief Accountant Ulgado referred the matter to Judicial
Staff Head Midas P. Marquez of the Office of Chief Justice Reynato 3. May we also request for Your Honor's approval to issue a Cash Advance in
Puno to resolve whether the "remaining balance" of P651,000.00 for the amount of Eight Hundred Fifty Thousand Pesos (Php850,000.00) to
the conduct of the Global Forum could be charged to JR-FA GOP initially cover the cost of the abovementioned activities and other incidental
Counterpart Funds.18 expenses to Mrs. Araceli Bayuga, Chief, Cash Division, Fiscal Management
and Budget Office (FMBO). The breakdown of the cash advance are as
follows:
2.
Other activities relative to the retirement     
of Chief Justice Panganiban
AMOUNT (in
The transactions between the PMO and Artes continued even after the ACTIVITIES
PhP) 
holding of the National Forum and Global Forum.
Musical Interlude at the Cultural Center of the 350,000.00
In Memorandum PMO JRPAO 15-11-2006 dated November 15, 2006, Philippines on November 30, 2006
Ms. Dumdum requested authority from Chief Justice Panganiban to
  State of the Judiciary (Audio-Visual Production) 250,000.00
"fund certain activities," thusly: 
Leadership and Servanthood: The Labor and Legacy 250,000.00
Your Honor:  of Chief Justice Artemio v. Panganiban (Audio-Visual
Production)

1. May we request authority to fund the following activities: TOTAL 850,000.00

   
   
 
AMOUNT (in 4. For Your Honor's kind consideration and approval.19
ACTIVITIES
PhP) 

1. Musical Interlude at the Cultural Center of the 551,536.00

Philippines on November 30, 2006
The OCAt reported that Associate Justice Angelina Sandoval Gutierrez, xxx xxx xxx 
as the Chairperson of the Committee on the Chief Justice's
Valedictory, recommended the approval of the request. Chief Justice (4) In an undated letter-quotation, Ms. Dabao offered the services of
Panganiban later approved the same and affixed his signature on the Artes for the retirement ceremonies in honor of Chief Justice
left hand comer of the Memorandum.  Panganiban on December 6, 2006 at the 'Supreme Court Hall' for the
price of P401,520.00, to which letter Ms. Dumdum affixed her
Having obtained the approval, Ms. Dumdum entered into the following signature. The disbursement voucher in favor of Artes shows that it is
contracts with Artes, namely:  to be charged to 'JRSP(WB)-GOP COUNTERPART FUNDS.'20

(1) In a letter-quotation dated November 17, 2006, Ms. Dabao offered On November 27, 2006, Ms. Dumdum requested from Chief Justice
the services of Artes for 'Retirement AVP: Leadership and Panganiban authority to provide additional funding for additional
Servanthood' for the an1ount of 620,000.00 plus 12% VAT of court-related activities, stating thereon in her Memorandum PMO
P74,400.00 or the total 'AVP cost' of P694,400.00. Ms. Dumdum JRPAO 27-11-2006, as follows: 
affixed her signature to the letter-quotation under the word conforme.
It appears that the downpayment of 250,000.00 was paid to Artes – Your Honor:
this is evident from the Sales Invoice dated December 8, 2006
collecting the 'final payment' of P444,400.00. For the same project,
1. This is further to our Memorandum requesting authority to conduct
Mindstorm Media, Inc. reportedly quoted the price of P1,025,155.04
and fund the remaining activities for December which Your
while Graymatter offered their services for P1,100,000.00. 
Honor approved. Copy of said Memorandum is attached for Your
Honor's reference. 
(2) Under letter-quotation dated November 22, 2006, Ms. Dabao
offered the services of Artes for the 'Commemorative Program
2. May we request additional authority to provide additional funding
(Retirement of CJ Panganiban) on December 6, 2006 at the Fiesta
for the development and preparation of the Audio-Video (sic)
Pavilion, Manila Hotel, 6:30 PM' for the package cost of P997,220.22.
Presentations entitled 'Liberty and Prosperity Under the Rule of
Ms. Dumdum signed the letter-quotation for the Court and, in
Law' and 'Leadership and Servanthood: The Labor and Legacy
Attachment I thereto, affixed her signature under the word conforme.
of Chief Justice Artemio V. Panganiban, Jr.' (sic) to the various
With the total withholding tax of P62,326.26 deducted from the
internal and external stakeholders of the APJR. The presentation of
package cost, the disbursement voucher in favor of Artes is for the net
these AVPs will commence on December 06, 2006. The total cost for
amount of P934,893.96.
the creative design, physical and technical production for the
said activities is P1,817,060.22. 
(3) On November 25, 2006, Ms. Dabao quoted the contract price
of P418,320.00for the project entitled "Celebration of the Life, Love
3. Should Your Honor concur, may we request that the
& Achievement of Chief Justice Panganiban Event" at the Pan Pacific
abovementioned amount be charged to the JRP FA Grant
Hotel at 12:00 noon of December 7, 2007. Similarly, Mindstorm
Proceeds or JRSP Funds, whichever is appropriate. May we
Media, Inc. submitted a quoted price of P474,374.80 inclusive of 12%
likewise request authority to disburse and/or draw cash advance for
VAT for the same project, while Graymatter offered P450,000.00
the total amount to Mrs. Araceli Bayuga, Chief, Cash Division, Fiscal
inclusive of management fees and 12% VAT. Ms. Dumdum affixed her
Management and Budget Office.
signature to the letter-quotation as "APJR Administrator." The
disbursement voucher prepared for the contract shows that the
"technical and non-technical support" services were rendered 'during 4. For Your Honor's kind consideration and approval. 21
(the) appreciation luncheon for the APJR non-development partners.'
The net contract price of P392,175.00, after deducting taxes of On November 28, 2006, Chief Justice Panganiban approved the
P26,145.00, is to be charged to 'JRSP(WB)-GOP COUNTERPART request without specifying the fund source.
FUNDS,' as recommended by Ms. Dumdum.
3.  System (Phil-GEPS)by the Property Division in no time at all; that if
Artes' requests for payment of unpaid contract price the amounts involved were within the Property Division's authority to
canvass, it would have issued the requested POs regardless of
Upon the conclusion of the Global Forum, the PMO forwarded to the whether the canvassing had been done by the proper bids committee
FMBO pertinent documents relative to the items supplied by Artes or by the Property Division itself; and that because the PMO did not
(i.e., 350 conference bags, 900 ID holders, 450 units of ball pens, and observe the proper procurement procedure, what had resulted were
25 jewelry boxes as souvenirs) in order to facilitate payment to the "advance deliveries," which were disallowed by law. 24
latter.
Ms. Caunca also clarified: 
The FMBO declined to process the payment for lack of the necessary
purchase orders (POs) as required by law.  This Division believes that the price for which the PMO obtained the
aforestated supplies were excessive. In this respect, this Division
Considering that no payment could be processed without the requisite finds pertinent the provision of Commission on Audit (COA) Circular
POs, the PMO requested the Property Division of the Office of No. 85- 55-A which states that:
Administrative Services (OAS) to issue the POs for the supplies
delivered by Artes. Being responsible for the determination of the 'Price is excessive if it is more than the 10% allowable price variance
reasonableness of the prices of supplies, the Property Division between the price paid for the item bought and the price of the same
surveyed suppliers of the conference bags, the ID holders, and ball item per canvass of the auditor.'
pens, but not the jewelry boxes which Artes claimed to have been
sourced from Cebu. Based on its survey, the Property Division The matter was consulted by the undersigned with the COA Auditor
concluded that the following items were overpriced 22 and assigned to the Court who expressed her opinion that the Purchased
excessive,23 to wit:  (sic) Order may still be prepared by this Division but the amount
should be based on the quotation or canvass obtained by this Division
Unit Price  Total Amount  and not that of the PMO. The COA Auditor even reminded (us on) the
prohibition on antedating the PO if only to reflect or coincide the dates
Qty. Unit Description when the PMO concluded their transactions with the Artes
Property Property 
PMO PMO International. Needless to state, the difference between the two (2)
Division  Division 
amounts is to be borne by the PMO or its responsible official, as the
Conference case may be.25
350 pcs. P450 P220 P157,500.00 P77,000.00
Bag 
On January 23, 2007, Ms. Dabao wrote to Ms. Dumdum requesting
900 pcs. I.D. Holder  95 35 85,000.00 34,200.00
that Artes be recognized as a "Supplier of Services" in order to "rectify
the taxes that were unwittingly withheld from Artes," which were
450 pcs. Ball Pens  31 13 13,950.00 5,850.00
equivalent to 15% of the contract price. She justified her request by
Jewelry attaching a copy of BIR Ruling DA075-07, which categorically stated
25 pcs. 700 - 17,500.00 - that Artes was subject to "2% withholding tax on income payments
Box 
made by the top 10,000 private corporations and government offices,
national, or local, pursuant to section (sic) 3 (M) and (N) of Revenue
In the Memorandum dated January 22, 2007 submitted to the Office No. 17-2001."26
of Chief Justice Puno, SC Judicial Staff Head Felicitas D. Caunca (Ms.
Caunca) of the Property Division declared that the PMO had itself On January 27, 2007, Chief Accountant Ulgado inquired from the Chief
conducted the canvassing for the supplies on the ground that it had of the Withholding Tax Division of the BIR about the query of Ms.
already been pressed for time; that such canvassing could have been Dabao, thusly: 
done through the Philippine Government Electronic Procurement
This refers to the BIR Ruling DA-033-2007 dated January 23, 2007 Artes International Inc. (sic) for the conduct of the National and
issued to Ms. Helen R. Dabao of Artes International, Inc. The BIR Global Forum (sic) on Liberty and Prosperity, and the Retirement
ruling states that an event organizer, like Artes, is a supplier of Ceremonies for Chief Justice Artemio V. Panganiban held last August,
service. Consequently, payments made by private corporation and/or October and December 2007 (sic), respectively."29
government offices are subject to the two percent (2%) withholding
tax. When the Memorandum of the Property Division was referred to her,
Ms. Dumdum maintained through her Memorandum dated September
The Articles of Incorporation of Artes International, x x x, states that 14, 2007 that Artes had been an events organizer responsible for
its primary purpose is Production and Management of Events and "outsourcing of supplies and materials used in the forum"; that its
Entertainment. services had been engaged to take charge of the details of the Global
Forum; that PMO was only involved in "overseeing that Artes took into
The Court withheld the 15% withholding tax from its payment to Artes consideration the important factors in selecting the suppliers, such as
International pursuant to Sections 3 and 4 of Revenue Regulations No. capacity to execute the design and timely delivery of such
30-2003 based on the entirety of the services rendered by said requirements"; that "it would be inaccurate to state that the selection
company. The creative, physical and technical aspects of the event of the canvassed suppliers was done by the PMO arbitrarily because it
required the hiring of Artes International as production manager merely proceeded from the suppliers chosen by Artes;" and that the
providing management and technical services for the conduct of said PMO had been merely instrumental in helping process payments to
event. Artes by the conduct of its "ministerial duty of preparing the
disbursement vouchers."30
May we respectfully request for an opinion from your office to clarify
whether or not the services presented above were covered by Section Anent the non-observance of procurement rules, Ms. Dumdum
3 (M) and (N) of RR 17-2001 or among those enumerated in Sections contended that "the procurement of supplies and materials used in the
(sic) 3 of RR 30-2003. forum need not pass through the Committee on Bids, nor follow the
procurement procedures under R.A. 9184 because those were not
actual procurement of goods;" and that "[t]hose items[,] for all
Thank you for your immediate attention.
intents and purposes[,] were to be treated as 'incidental' to the
services provided by the events organizer, which in this case happens
However, Chief Accountant Ulgado received no reply from the BIR. 27 to be Artes."31

Subsequently, the FMBO requested the Office of the Chief Justice Under the circumstances, ACA Marquez, as Chief Justice Puno's Staff
(OCJ) to refer to the OCAt the matter of "the propriety of collecting Head, referred the Artes matter regarding the "supplies for the
withholding tax of 15% totaling P1,342,637.26 from payments" made National Forum" to the OCAt for study and report.
by the PMO to Artes "for services rendered" relative to the Global
Forum. It appears that on June 6, 2007 the FMBO returned to the
In the meantime, on November 12, 2007, Ms. Dabao transmitted to
PMO four disbursement vouchers issued in the name of Artes "without
Ms. Dumdum a letter inquiring on the status of the following: 
action," specifically: P376,425.00; P392,175.00; P372,225.00; and
P934,893.00, or a total of P2,071,664.10, on the ground that the
FMBO was still awaiting instructions from the OCJ. 28 1. The taxes amounting to P1,162,850.00 withheld from the
contract price of the National Forum and Global Forum;
On August 22, 2007, the PMO, represented by Edilberto A. Davis,
2. The "collaterals" amounting to P693,626.75 incidental to the
Dennis Russell D. Baldago and Atty. Sigrid Promentilla; the OCJ,
National Forum; and 
represented by then Assistant Court Administrator (ACA) Jose Midas
P. Marquez (now the Court Administrator); and Artes, represented by
Ms. Dabao, met to "discuss the unpaid disbursement vouchers due to
 3. The payment of the remaining balance of P2,261,460.22 for We appeal to you, CJ Corona, to aid us in our three year old quest for
the Retirement Ceremonies of Chief Justice Panganiban. justice. We are a small events company and Php2.9 million is our
entire rolling capital for the business. What pains us is we cannot find
In her letter dated November 13, 2007, Ms. Dumdum acknowledged any reason nor could the OCAT find any reason for the Supreme Court
the aforementioned letter of Ms. Dabao, and assured her that a to hold payment for our company, Artes International, Inc. 38
follow-up meeting would be conducted, viz.: 
On May 30, 2011, Ms. Dabao wrote Atty. Lourdes B. Lim, Department
x x x [A]fter the following concerns have been addressed: (a) the x x Auditor of the Commission on Audit (COA) assigned to the Court,
x OCAT releases its comments to the Office of ACA Marquez regarding requesting a certification to the effect that "no audit (pre or post) has
the taxes withheld during the conduct of the National and Global yet been conducted on the said collectibles."39
Forum (sic) on Liberty and Prosperity in the amount of
Php1,162,850.00; (b) the PMO collaterals used during the conduct of In her reply dated June 28, 2011, Atty. Lim responded thusly: 
the National Forum on Liberty and Prosperity in the amount of
Php693,626.75; and (c) the Disbursement Vouchers concerning the Please be informed that we cannot issue a certification that no audit
remaining balance of Php2,261,460.22 for the conduct of the (pre or post) since no payment has been made yet nor disbursement
Retirement Ceremonies of Chief Justice Panganiban are forwarded to voucher submitted to this Office (sic). Moreover, an Audit Observation
the Office of ACA Marquez x x x.32 Memorandum dated May 9, 2007 was issued by this Office which was
received in the Office of the Chief Justice on May 21, 2007 during the
On August 20, 2008, Ms. Dabao sent another letter requesting that time of the former Chief Justice Reynato S. Puno relative to the
Mr. Davis, who had meanwhile taken over as Director of the PMO retirement activities in honor of the former Chief Justice Artemio V.
following the resignation of Ms. Dumdum, issued to her a "formal Panganiban, Jr. (sic) wherein no comment/reply was received by this
correspondence" on the unpaid balances.33 Office.

On September 23, 2008, Ms. Dabao followed up with Mr. Davis, this Further, pursuant to Section 2 of P.D. 1445, The Government Auditing
time threatening to expose the delay to the media. 34 Code of the Philippines which provides that 'It is the declared policy of
the State that all resources of the government shall be managed,
On October 6, 2008, Ms. Dabao met with ACA Marquez, Mr. Davis and expended or utilized in accordance with law and regulations and
Dennis Russell D. Baldago to thresh out matters relative to the claims safeguarded against loss or wastage through illegal or improper
of Artes.35 disposition, with a view to ensuring efficiency, economy and
effectiveness in the operations of government. The responsibility to
take care that such policy is faithfully adhered to rests directly with
On May 26, 2009, Ms. Dabao wrote Chief Justice Puno to appeal for
the chief or the head of the government agency concerned.
the settlement of the "aggregate overdue accounts" totaling
P2,955,086.97 that Artes had been trying to collect since August
2007.36 For your appropriate action.40

On March 8, 2011, Ms. Dabao wrote Court Administrator Marquez By her own Memorandum dated February 21, 2012, then JRP
pleading for an audience to discuss the collectibles of Artes. 37 Administrator Geraldine Faith Econg requested Atty. Corazon G.
Ferrer-Flores, FMBO Chief, for an update on "the advice from the
Office of the Chief Justice which you have waited for." However, no
On April 28, 2011, Ms. Dabao wrote Chief Justice Renato C. Corona for
action was taken thereon. 
help "in our three year old quest for justice," relevantly stating:

4.
xxxx
The response of the PMO
Chief Justice Puno referred the Report of the OCAt to the PMO for notification of the lagging activities and the responsible offices.
appropriate action or comment.  Emphasis supplied.44

Inasmuch as Ms. Dumdum had meanwhile resigned as the JRP He insisted that the PMO, being the end-user, assisted Artes as the
Administrator effective February 19, 2008 and had immediately gone event's specialist, thusly: 
on terminal leave prior thereto, it was Mr. Davis, using the title of
Judicial Reform Program Administrator, who submitted the comment The basis of the PMO's functions as an end-user unit was further
dated February 18, 2008 in behalf of the PMO.41 affirmed by the subsequent issuance by the GPPB of the Generic
Procurement Manuals (approved on 14 June 2008), whereby procuring
Mr. Davis explained therein that the estimated budget of entities are encouraged to create their respective Procurement Units
P7,500,000.00 for the National Forum superseded the approved (an organic unit of office within the agency). These procurement units
budget of P6,800,000.00; and that the "latter (?) document was were envisioned to perform the functions of the BAC Secretariat
discarded without any intention to be used as an official document." 42 including the preparation of procurement documents. Considering that
"request for quotations" or "canvassing documents" as loosely used,
Justifying why expenditures had been charged to the JRSP Fund even verily fall under the same category, then it may be properly inferred
before Chief Justice Panganiban had approved the request for that the PMO, being the end-user unit validly conducted the canvass.
authority to use such fund, Mr. Davis expounded:  Hence the allegation of usurpation of BAC functions in violation of the
Administrative Circular on procurement as hastily alleged by OCAT
was disputed.45
The foregoing statement was nothing but obvious misrepresentation,
Your Honor. Foremost, it must be considered that the alleged
expenditures cited by the OCAT are expenses which were incidental to Commenting on the allegation of splitting of contracts, Mr. Davis,
the services of Artes as Events' specialist. Since Artes procured focusing only on the production of "a 10-minute Audio-Visual
those items in their own capacity as private contractor and in Highlights of International Conference and Showcase on Judicial
compliance with their obligations and responsibilities as events Reforms (ICSJR) in DVD format and standard casing with 700 copies,"
specialist, those expenses will eventually be reimbursed by the denied that there had been any splitting of contracts because such
Supreme Court to Artes. The JRPA merely identified the funding services were distinct from those undertaken by Artes, which
source from which those expenses shall be charged. Thus, those consisted of "translating the proceedings of the whole conference into
items are not subject of new contracts but are merely part of an Audio-Visual Documentary Video Format, with four hundred (400)
the services delivered by Artes. Thus, it would be inaccurate to copies of cover booklets." He insisted that "Artes was engaged to
state that those expenses were incurred prior to the grant of approval focus on the substantive part of the conference and the important
by the Chief Justice.43 details which should be accurately documented for the purpose of
maintaining an official record of the events that transpired during the
conference," and, consequently, the allegation of splitting of contracts
Mr. Davis cited the following provision of SC Administrative Circular
was "baseless and without merit."46
No. 60-2003 to explain why the PMO had assisted in the procurement
activities, to wit: 
Mr. Davis invoked the presumption of regularity in the performance of
official functions, and the maxim damnum absque injuria. He
4.3 All JRSP procurement activities shall be done through, or with
manifested that "the OCAT cannot presume that PMO through the
the assistance of the PMO. The Project Implementation Monitoring and
JRPA was in bad faith when it entered into the questioned
Evaluation Group of the PMO (PMO-PIMEG) will manage the specific
transactions. Absent a clear evidence of bad faith, the same shall not
procurement activities, and tract their baseline schedule and actual
be applied." He added: 
progress. The Program Director of the PMO will be responsible for the
overall monitoring of the procurement process, particularly, the
Likewise, we also wish to reiterate our previous statement in
Memorandum PMO JRPAO 09-14-2007 that the PMO's involvement in
the said transaction was merely to facilitate the process by c) Evidence of shipment (for equipment and materials purchased).
overseeing that Artes took into consideration the important This can be one of the following:
factors in selecting the suppliers, particularly its capacity to
execute the design and timely delivery of such • Copy of the bill of lading
requirements. The canvass made by the PMO which reflected • Forwarder's certificate
quotations from other suppliers (although not generally required due
to the very nature of subject items), was in fact an exercise of due
d) Evidence of payment (for reimbursement). This can be one of
diligence because it exerted the effort to ensure that the prices
the following:
charged by Artes were still within the reasonable market price, even
after including a reasonable profit margin in exchange for the
additional customized design inputted by Artes to the said items under • Receipted invoice or formal receipt
consideration. There was nothing irregular in the conduct of the • Commercial bank's report of payment
PMO, thus it should not be penalized for doing its responsibilities
efficiently to ensure that the National and Global Forums were e) Performance security such as bank guarantee in the case of
successfully hosted by the Court. (Emphasis supplied.) 47 advance payments if required under the terms of the contract, or
where an unusually are (sic) advance payment is made (Emphasis
Mr. Davis denied the need to secure certificates of availability of funds supplied.)
(CAFs) prior to the execution of the contracts with Artes. He opined
that the CAFs were required only for locally funded activities. He Mr. Davis affirmed that there was nothing irregular about "facilitating
submitted that as long as the requirements stated in page 145 of the conduct of alternative method of procurement of shopping" even
the Handbook on Understanding Foreign Assisted Projects of the COA though the JRP Administrator did not first seek authority to do so from
"are present, there is no reason to delay or disallow disbursement of the Chief Justice. He reminded that: "The act of facilitating and
funds." approving the quotations of the items being bought by Artes were
mere exercise of the authority granted to it under Section 4.3 of
The requirements prescribed by the Handbook on Understanding Administrative Circular No. 60-2003." 48 He opined that neither the
Foreign Assisted Projectsadverted to are the following:  loan agreement nor the law necessitated the "formal requirements,"
like the CAFs for the contracts. He reiterated that the CAFs applied
only to locally funded projects; hence, the "quotation-contract" was "a
a) Documentation.
valid government contract" that could not be questioned. 49 With
respect to the authority issued by Ms. Dumdum to pay amounts
In general, the documentation required to support disbursements beyond the threshold of her authority granted under SC
depends on the type of expenditures involved. Administrative Circular No. 60-2003, he posited that the observation
of the OCAt thereon was a "matter of opinion" because "[t]o date, no
If the Bank needs full supporting documentation, two copies of audit observation has been made by COA to this effect." 50 Finally, he
contracts or purchase orders should be sent to the Bank to review by invoked Chief Justice's intervention "to put an end to all these
the designated task manager before submitting the first related harassments and desperate attempts to tarnish the reputation of the
application. One copy of each of the following supporting documents is undersigned."51
normally given to the Bank with the withdrawal application:
It is noteworthy that in its letter of May 26, 2016, Artes, through Ms.
b) Supplier's or consultant's invoice, or a summary statement of Dabao, communicated to the Court, through the OCJ, that it no longer
works performed signed by the supervising engineer or other wished to pursue its claim; that its claim had been the result of a
authorized official misunderstanding; and that its claim had been already settled to its
complete satisfaction.52
Artes submitted simultaneously with its letter of May 26, 2016 the so- assiduously pleading for the payment of the total sum
called Release, Waiver & Quitclaim in which it reiterated the contents of P4,117,936.98, itemized as follows: 
to the effect that it was waiving any and all its rights and interests in
the claim; and expressly stated that it was releasing the Court from 1. The taxes withheld on the "contract" price of the National
any further liability.53 Forum and Global Forum amounting to P1,162,850.00; 

It is possible that the Release, Waiver & Quitclaim rendered moot and 2. The "collaterals'' used in the National Forum amounting
academic every issue regarding Artes' several contracts with the to P693,626.76; and
Court. An action is considered moot when it no longer presents a
justiciable controversy because the issues involved have become 3. The balance of the "contract" price of the "Retirement
academic or dead, or when the dispute has already been resolved Ceremonies" of CJ Panganiban amounting to
and, hence, one is not entitled to judicial intervention unless the issue P2,261,460.22.57
is likely to be raised again between the parties. As the consequence,
nothing more needs to be resolved after its determination has been
The Court, albeit fiscally autonomous, could not simply authorize and
overtaken by subsequent events.54
justify the release of funds to pay Artes' demand in view of the many
questions that were raised against the contracts entered into with
However, the mootness principle bows to certain exceptions, such that Artes by Ms. Dumdum as the PMO Administrator. To decide on
mootness will not always deter further proceedings upon a matter whether to pay or not, the Court had to be guided by the law on the
until its resolution in due time if there is a valid reason to do so. proper disbursement of public funds, whether emanating from the
In David v. Macapagal-Arroyo,55 the Court has defined four instances National Treasury or sourced from loans or credits extended by
in which the courts can still decide an otherwise moot case, namely: foreign funding partners. 
(a) there is a grave violation of the Constitution; (b) the exceptional
character of the situation and the paramount public interest is
The WB loan agreement 
involved; (c) when the constitutional issue raised requires formulation
and its implementation
of controlling principles to guide the Bench, the Bar, and the public;
and (d) the case is capable of repetition yet evading review. 56
The loan agreement between the Republic of the Philippines and the
International Bank for Reconstruction and Development (IBRD), or the
The extraordinary character of this case for involving the compliance
World Bank (WB), was signed on October 2, 2003 to fund the Judicial
with the law and rules on procurement as well as the public interest
Reform Support Project (JRSP) whose objective was "to assist the
thereby necessarily involved override the applicability of the mootness
Borrower in developing a more effective and accessible Judiciary that
principle. Based on the Report of the OCAt, liability of some form for
would foster public trust and confidence through the implementation
violations of the law and rules on procurement already might have
of the Supreme Court's Action Program for Judicial Reform." 58
probably attached to the public officials involved. To still proceed
herein clearly responds to the Constitutional declaration that public
office is a public trust. Prudential wisdom also dictates that the Court The JRSP consisted of the following: 
should not immediately brush aside the irregularities committed in
relation to the services rendered by Artes if only to serve the demand 1. Improving Case Adjudication and Access to Justice; 
for transparency.
2. Enhancing Institutional Integrity; 
Ruling of the Court
3. Strengthening the Institutional Capacity of the Judiciary; and
The Court is not unmindful that Artes, prior to its submission of
the Release, Waiver & Quitclaim, had been consistently and 4. Support for the Reform of the Judicial System and Program
Management Office (PMO) 
Based on the forgoing, the "Globalization Lecture Series - Forum with
Chief Justice" appeared in the JRSP WB Financial Monitoring Report CY
2006 under the second category,  i.e.,Enhancing Institutional
Integrity.  5.1.1 JRSP LOAN AGREEMENT. The Loan Agreement
executed by and between the GOP and the WB on
October 2, 2003 shall govern the legal relationship
SC Administrative Circular No. 60-2003 entitled Procurement Policy between the Bank and the Supreme Court as the Project's
and Procedures for the Judicial Reform Support Project  was issued on Implementing Agency. The terms and conditions set
November 18, 2003 "to ensure the effective implementation of the forth therein for the procurement of goods, works and
Judicial Reform Support Project (JRSP) through the timely consulting services shall be observed in consonance with
procurement of Goods, Works, and Services, guide the concerned the Bank Guidelines.
Supreme Court Offices in their respective roles in the procurement
process, prescribe the allowed lead times for each procurement
activity, and monitor and resolve bottlenecks and problem areas in
the procurement process.” Thus, SC Administrative Circular No. 60- 5.1.2 BANK GUIDELINES 
2003 applied when procuring goods, works, and services in
furtherance of the implementation of the JRSP, viz.: 

3.  SCOPE 5.1.2.1 For Works and Goods procurement, the

Guidelines: Procurement under IBRD Loan
and Credits, January 1995, revised January
and August 1996, September 1997 and
January 1999 shall be used.
3.1 This Administrative Order applies to the procurement of all types
of works; goods, and services in the implementation of the JRSP,           

5.1.2.2 For the selection of Consultants, the

Guidelines: Selection and Employment of
xxx Consultants by World Bank Borrowers,
January 1997, revised in September 1997,
January 1999 and May 2002 shall be used.

         
5. LEGAL FRAMEWORK 

5.1.2.3 More recent provisions and amendments of

Bank Guidelines may be applicable subject
to prior notice and clearance by the Bank.
5.1 These Guidelines are formulated in fulfillment of a major legal
commitment of the Government of the Philippines (GOP) with the
World Bank (WB) and therefore, have the force and effect of a
legal instrument for compliance of all concerned with the 5.1.3 REPUBLIC ACT NO. 9184 (An Act Providing for the
implementation of the JRSP. The provisions of these guidelines Modernization, Standardization and Regulation of the
are basically premised and substantially based on, and in some Procurement Activities of the Government and for Other
parts or instances, literally quoted or drawn from:  Purposes) and its Implementing Rules and Regulations
(IRR). 
 5.2 In case of conflict, the Loan Agreement and the World Bank The PMO appeared to have resorted to shopping as the method of
Guidelines take precedence over Government Guidelines. procurement in canvassing three suppliers for the goods and supplies
intended for the National Forum.

Under the aforequoted guidelines set in SC Administrative Circular No. Re: Supplies for the National Forum and 
60-2003, the procurement rules for the JRSP were not exclusively the Global Forum on Liberty and Prosperity 
culled from the IBRD Guidelines, but also from the provisions of R.A.
No 9184, which were to be applied suppletorily. The OCAt noted that
Considering that the National Forum and the Global Forum were
under the procurement rules the borrower, which was the Court itself,
projects conceptualized under the aegis of the JRSP, SC
should identify the body that would conduct the procurement activities
Administrative Circular No. 60-2003 governed the procurement of
for the borrower. For the purpose, SC Administrative Circular No. 60-
goods, works and services. 
2003 adopted Article V of R.A. No. 9184 to establish the JRSP Bids
and Awards Committee (JRSP BAC) to be in charge of the conduct of
the procurement activities. In light of this, and given that the PMO By resorting to national shopping, however, the PMO ignored the
Program Director was tasked with the overall monitoring of the last sentence of the IBRD Guidelines on such alternative method of
procurement process, Ms. Dumdum and the PMO should not have procurement that required a purchase order (PO) in which the
engaged in actual procurement activities, as their doing so would accepted offer should be indicated. The PO was akin to a "contract
mean that she and the PMO were risking not being able to perform between the parties as it requires inputs showing the requisites of a
the monitoring function properly.59 contract of consent, object certain, and cause of obligation." 61 Instead
of the PO, the PMO used and relied on letter-quotationsto reflect
and contain the agreements between the parties. All that Ms.
The IBRD Guidelines defined two modes of procurement:
Dumdum as the Program Director had to do was to affix her signature
the international competitive bidding (ICB); and the other
on the letter-quotations beneath the word Conforme to indicate
methods of procurement. The latter included limited
conformity to the terms stated therein. This manner of contracting
international bidding (LIB); national competitive
was yet again a clear violation of the IBRD Guidelines and the
bidding (NCB); shopping; direct contracting; etc.60
Standard Bidding Documents, Procurement of Goods. 62

Specifically, shopping was defined by the January 1999 IBRD

What were to be contained in the contracts was quite clearly stated in
Guidelines in the following manner: 
the law. In the 1999 version of the IBRD Guidelines, the following
parameters were expressly written, to wit: 
Shopping (International and National)
Conditions of Contract
3.5 Shopping is a procurement method based on comparing price
quotations obtained from several Suppliers, usually at least three, to
2.37 The contract documents shall clearly define the scope of work to
assure competitive prices, and is an appropriate method for procuring
be performed, the goods to be supplied, the rights and obligations of
readily available off-the-shelf goods or standard specification
the Borrower and of the supplier or contractor, and the functions and
commodities that are small in value. Requests for quotations shall
authority of the engineer, architect, or construction manager, if one is
indicate the description and quantity of the goods, as well as desired
employed by the Borrower, in the supervision and administration of
delivery time and place. Quotations may be submitted by telex or
the contract. In addition to the general conditions of contract, any
facsimile. The evaluation of quotations shall follow sound public or
special conditions particular to the specific goods or works to be
private sector practices of the purchaser. The terms of the
procured and the location of the project shall be included. 63
accepted offer shall be incorporated in a purchase
order. (Emphasis Supplied) 
Moreover, as the OCAt has correctly observed, the IBRD Guidelines
mentioned of contract documents instead of a single document.
This observation is consistent with the Generic Procurement Manual evidenced by the undated Abstracts of Bids approved by the
(GPM) that synchronized the provisions of R.A. No. 9184 with the JRP Administrator.  Notably, Artes emerged the firm with the
procurement rules of the Asian Development Bank, Japan Bank for ''lowest quotation" for jewelry boxes and ball pens even though the
International Cooperation, and the World Bank itself by requiring that JRP Administrator conformed to its quotation and Artes delivered the
contracts resulting from procurement activities for goods should be said goods days before OfficeMAN and Chateau offered their
supported not only by a contract document but by a number of quotations for the same goods; 
documents including the bid documents. Yet, based on the detailed
study made by the OCAt, no proper bidding procedure pursuant to the Moreover, assuming that the PMO had been authorized as a special
guidelines of SC Administrative Circular No, 60-2003 was followed by procurement body, it may not conduct shopping without authority
the JRSP-BAC in choosing Artes as the service provider for the from the Chief Justice as head of the procuring entity. Section 48 of
National Forum and the Global Forum. Consequently, the patent Republic Act No. 9184 provides that to promote economy and
nullity of the contracts with Artes became the only legal consequence efficiency, an alternative method of procurement such as shopping
to be reached from the failure to comply with the proper procurement may only be conducted upon prior approval by the Head of the
procedure.  Procuring Entity and "whenever justified by the conditions" provided
by Republic Act No. 9184. The JRP Administrator, who does not
We are not also prepared to find that the PMO conducted the appear to have been specially authorized by the Chief Justice for the
canvassing for the supplies for having been already pressed for time. purpose of approving the alternative method of procurement to
Such explanation was a feeble and implausible excuse in the face of competitive bidding to be adopted, may not arrogate unto herself the
the statement by Caunca of the Property Division to the effect that the responsibility of the Chief Justice to authorize the conduct of
Property Division could have done the canvassing  in time through the shopping. (Italicized and bold emphases are part of the original) 64
Phil-GEPS despite time constraints. Indeed, the records revealed no
immediate or compelling justification for dispensing with the At the very least, the resulting situation of the canvasser later
requirement of public bidding in choosing the service provider for the emerging as the winning bidder was highly irregular because of the
procurement of the goods involved thereon. To insist that a public plainly obvious conflict of interest. 
bidding would have unnecessarily delayed the implementation of the
program was truly unacceptable. By conducting the canvass without
Considering that most of the expenditures whose payments were
prior coordination with the Property Division, Ms. Dumdum and the
sought by Ms. Dumdum as the authorized approving official came
PMO ignored the proper procurement procedure, and unavoidably
within the threshold allowed in SC Administrative Circular No. 06-2003
caused the making of "advance deliveries" in contravention of the
(i.e., P1,000,000.00 and below), the payment of contracts on the
law. 
goods, works, and services procured under the JRSP would have been
presumed to have initially complied with the proper procurement
The assertion by the JRP Administrator that Artes had itself conducted procedure conducted by the JRSP-BAC. Yet, we cannot even presume
the canvassing of suppliers, and that the PMO had only facilitated the regularity simply because of several indicia of non-compliance with
process was fundamentally discredited by the documents reviewed by the proper procurement procedure. The presumption of regularity
the OCAt. The records disclosed that Ms. Dumdum as the JRP vanished with the appearance of even just one irregularity. We agree
Administrator had approved the recommended award of contracts to with the OCAt that it was doubtful if the actual canvass had been
Artes as the winning bidder despite Artes having itself conducted the conducted in view of the abstracts of canvass, particularly with
bidding. We advert to the points cogently made by the OCAt respect to the jewelry boxes and the ball pens, being undated. The
thereon, viz.:  OCAt pertinently noted: 

If indeed it is true that the PMO merely facilitated the process Documents show that the JRP Administrator signed the letter-
as an overseer, and Aries was the actual canvasser, then a lot quotation of Artes dated August 14, 2006. The face of the letter-
of questions are raised by the fact that Artes itself emerged quotation does not show when she signed it. However, two days later
the winner in the canvasses "facilitated" by the PMO, as or on August 16, 2006, Artes sent her Sales Invoice No. 360 for the
full payment of P35,224.00 for the said goods. On August 20, 2006, procurement laws. Hence, there would be no disbursement of public
or four days after Artes had presented Sales Invoice No. 360 to the funds to be disallowed or no expenditure to be declared illegal.
PMO, OfficeMan and Chateau Manufacturing sent quotations for the
same goods. Could there be canvassing of all three proponents under We also clarify that the contracts with Artes did not make it to the
these circumstances? In all probability, the Abstract of Bids was category of ineligible as determined by the WB, and this was due to
prepared and included in the records only to justify the premature the Court's continued refusal to settle the nearly P3 million supposedly
award of the contract to Artes.65 owed to Artes. The refusal to pay was most likely the reason why the
contracts with Artes were not included in the WB's list of ineligibles.
It is also true that a contract that has all the essential requisites for its
validity is binding between the parties regardless of its form. 66 But Re: Splitting of contracts
when the law requires that a contract be in some form in order that it
may be valid or be enforceable, or demands that a contract he proved
That Ms. Dumdum committed splitting of contracts was undeniable.
in a certain way, the requirement of a particular form or manner is
absolute and indispensable.67 Once the formal requirement for the
contract is absolute and indispensable, any procurement contract that Splitting of contracts means the breaking up of contracts into
does not adhere to the requirement can only be deemed invalid and smaller quantities and amounts, or dividing contract implementation
unenforceable. As such, every letter-quotation signed by an into artificial phases or subcontracts, for the purpose of making them
unauthorized purchaser in behalf of a government agency in a manner fall below the threshold for shopping or small value procurement, or
contrary to the loan agreement with the foreign lender and contrary to evading or circumventing the requirement of public bidding. 73 Public
the local procurement law can only be a mere scrap of paper that officers and agencies are called upon by the COA to ensure that no
cannot by any means be accorded any validity or enforceability. splitting of requisitions, purchase orders, vouchers, and the like, is
resorted to in order to circumvent the control measures provided in
the circulars it issued and other laws and regulations. In this
We cannot but notice that the records do not show that the PMO had
connection, a project funded under a single obligating authority and
secured the CAF for each of the contracts. According to the OCAt, the
implemented in several phases whether by the same or different
CAFs were still required because the Government Auditing Code of the
contractors shall be deemed splitting of contracts.74
Philippines,68 the Administrative Code of 1987,69 and the General
Provisions of the relevant  General Appropriations Act70 uniformly
required expenditures of appropriated funds to be supported by CAFs. Under the general guidelines of the Government Procurement Policy
We hold that the loan proceeds were undoubtedly appropriated funds. Board (GPPB), splitting of contracts is strictly prohibited. 
In addition, R.A. No. 9184, which was definitely applicable, has
specified "'confirming the certification of availability of funds, as well COA Circular No. 76-41, dated July 30, 1976, is instructive on the
as reviewing all relevant documents in relation to their adherence to matter of splitting of contracts, to wit: 
law"71 as parts of the assessment of the readiness of the procurement
during the pre-procurement conference. With the requirement for the Forms of Splitting: 
CAFs being sine qua non in government procurement and contracts,
every contract without the corresponding CAF should be characterized
as null and void.72 1) Splitting of Requisitions consists in the non-consolidation of requisitions for
one or more items needed at or about the same time by the requisitioner.
The transactions consummated by Ms. Dumdum for the PMO could not
2) Splitting of Purchase Orders consists in the issuance of two or more purchase
be classified as regular despite the lack of a contrary finding by the
orders based on two or more requisitions for the same or at about the same time
COA. Such contrary finding by the COA was not yet forthcoming
by different requisitioners; and
because the Court had not yet settled the claim of Artes for the
balance of the aggregate contract price in view of the material 3) Splitting of Payments consists in making two or more payments for one or
violations of SC Administrative Circular No. 60-2003 and the relevant
 more items involving one purchase order.  or - controlled corporations; etc., and proscribes the splitting of
requisitions, purchase orders, vouchers and others. The heads of the
departments, bureaus or offices are expressly enjoined to observe
The above-enumerated forms of splitting are usually resorted to in the prudence, accountability and transparency in ensuring that no such
following cases:  splitting of requisitions, POs, vouchers, etc. escape their attention or
happen under their charge. With the increasing volume of transactions
involving purchases of goods, equipment, supplies and materials,
1) Splitting of requisitions and purchase orders to avoid inspection of deliveries; there arises the need to enforce control measures to insure that
procurement is effected in a manner that is most advantageous to the
2) Splitting of requisitions and purchase orders to avoid action, review or Government. The control measures protect the Government from
approval by higher authorities; and losing millions of pesos through irregularities in the procurement
process. 
3) Splitting of requisitions to avoid public bidding. 

The following elements constitute the act of splitting of contracts or

The foregoing enumeration of the forms of splitting is merely procurement project, to wit: 
illustrative and by no means exhaustive. But in whatever form
splitting has been resorted to, the idea is to do away with and 1. That there is a government contract or procurement project;
circumvent control measures promulgated by the government.
It is immaterial whether or not loss or damage has been
2. That the requisitions, purchase orders, vouchers, and the like
sustained by, or caused to, the government. In a celebrated
of the project are broken up into smaller quantities and
administrative case wherein a ranking official was charged with and
amounts, or the implementation thereof is broken into
found guilty of splitting of purchases, the Office of the President of the
subcontracts or artificial phases; and 
Philippines was quite emphatic when it ruled that "his liability is not
contingent on proof of loss to the Government because of said
3. That the splitting of the contract falls under any of the
violations of rules on procurement." For this reason, except
following or similar purposes, namely: 
"requisitions for supplies materials and equipment spare parts xxx
acquired through emergency purchase from reputable firms xxx:"
(Section 18, Letter of Implementation No. 44, dated April 8, 1976 of a. evading the conduct of a competitive bidding;75]
the President of the Philippines), Auditors should be on the lookout for
cases of splitting in varied forms such as splitting of requisitions and b. circumventing the control measures provided in the
purchase orders to avoid inspection of deliveries; splitting of circulars and other laws and regulations;76 or 
requisitions, purchase orders, and payments to avoid action, review or
approval by higher authorities; and splitting of requisitions to avoid c. making the contract or project fall below the threshold
public bidding. for shopping or small value procurement.77

The Commission. on Audit, therefore, cognizant of its responsibility Applying the foregoing elements to Artes' contracts, we find that the
under the Constitution to safeguard expenditures and uses of JRSP WB loan was used to fund both the National Forum and the
government funds and property hereby enjoins all concerned to Global Forum in the respective amounts of P7.5 million and P20.6
strictly enforce and faithfully adhere to all laws, rules, regulations, and million; but instead of conducting a public bidding for the two events,
policies calculated to prevent or prohibit splitting in any or all forms Ms. Dumdum entered into several letter-contracts or quotation-
for the protection of the government. (Emphasis supplied) contracts with Artes for various phases of the events, each phase
involving amounts that were well within her authority to approve
under SC Administrative Circular No. 60-2003. Such letter-
The foregoing COA circular is addressed to all heads of departments;
contractsor quotation-contracts were aimed not only at dispensing
chiefs of bureaus and offices; managing heads of government-owned
with competitive bidding but also at avoiding the control measures set
in place under SC Administrative Circular No. 60-2003, the COA Considering that Artes already waived any and all claims it had
Circulars, R.A. No. 9184 and other relevant laws and regulations on against the Court pursuant to the several contracts entered into with
government procurement.  Ms. Dumdum, there is no more need to make the latter personally
liable for the reimbursement of any amounts that Artes was claiming.
In its Report, the OCAt cogently opined that - 
Her release from personal liability for reimbursement notwithstanding,
On the claim of Ms. Dumdum that Artes was an "events" organizer, Ms. Dumdum should be investigated for any administrative or criminal
this Office pointed out that the Philippine Convention and Visitors liability for acts done in connection with the following circumstances,
Corporation (PCVC), a non-profit corporation that serves as the namely: 
marketing arm of the Department of Tourism, was the events
organizer under a Memorandum of Agreement that Ms. Dumdum a. requesting authority to fund the National Forum twice on the
herself signed for the Court. same day for the separate amounts of P7,500,000.00 and
P6,800,000.00 without indicating whether the first request is
The various contracts entered into with Artes for each of the two superseded or that the latter request was intended to be for
events, in light of the claim of Ms. Dumdum that Artes was an "events an amount to be added to the first request; 
organizer," only led to the conclusion that there was splitting of
contracts. If it were true that Artes was engaged as an events b. entering into contracts even before the Chief Justice approved
organizer, a lump sum contract thereon should have covered all the the use of funds from which the expenses for the contracts
details of holding the National Forum, including the needed supplies. 78 were drawn;

Had the PMO engaged Artes as the events organizer of the two c. allowing her subordinates to conduct the alternative method
events, Ms. Dumdum should have executed with Artes a lump sum of procurement of shopping without her having been duly
contract that covered all the details and incidentals of the events authorized as the representative of the Chief Justice for the
instead of the several letter-contracts and quotation-contracts for purpose of approving the alternative mode of procurement; 
each and every phase of the events. That the value of each of
the letter-contracts and quotation-contracts entered into by Ms. d. prematurely awarding to Artes the contract for the jewelry
Dumdum was within her authority to approve (i.e., P1 million and boxes and ball pens before actual receipt of offers of other
below) was another strong manifestation of splitting of contracts. proponents; 

e. participating in procurement activities notwithstanding that

Splitting of contracts is a serious transgression of the procurement
her authority was to monitor such activities, in violation of the
rules of the Government. Section 65(4) of R.A. No. 9184 penalizes
rule on conflict of interest; 
public officers who commit "splitting of contracts which exceed
procedural purchase limits and competitive bidding" with
"imprisonment of not less than six (6) years and one (1) day but not f. allowing the conduct of activities that violate procurement
more than fifteen years." rules such as the rule prohibiting splitting of contracts; 

g. signing contracts prepared by private contracting parties as

Personal liability of Ms. Dumdum
letter-quotations with no Certificate of Availability of Funds
(CAF) attached thereto and hence in violation of formal
Section 103 of the Government Auditing Code of the Philippines requirements prescribed by law and the Loan Agreement; and
declares that "[e]xpenditures of government funds or uses of
government property in violation of law or regulations shall be the h. authorizing the payment of the amount of P1,313,435.00 (or
personal liability of the official or employee found to be directly P1,427,647.72 inclusive of tax), which is beyond her threshold
responsible therefor." 
 of authority for payments of P1 million under Administrative Based on the OCAt's Report dated June 20, 2012, violations of law in
Circular No. 60-2003.79 the disbursement of funds of the Court as well as of funds derived
from the loans extended by the World Bank appear to have been
Even if the disciplinary procedure provided in Paragraph 9.4 of committed. The laws on procurement as well as those on auditing and
Administrative Circular No. 60-2003 is no longer applicable to Ms. official accountability were also contravened. Although such violations
Dumdum in view of her having meanwhile ceased to be connected would have resulted in the nullification of the contracts for services
with the Court, Paragraph 9.3 of Administrative Circular No. 60-2003 and supplies between the Court and Artes, the Court would have still
may apply, viz.:  authorized payments to Artes of any unpaid balances based on the
equitable principle of quantum meruit in order not to be guilty of
being unjustly enriched. The Court would then consequently move to
9.3 Sanctions. Supreme Court officials, employees and private
seek from the concerned individuals the reimbursement of whatever
individuals who shall fail to comply with the provisions of this
amounts it would have thereby paid. That would not happen now
Administrative Circular without just cause shall be held liable
because Artes meanwhile expressly released the Court from any
and subject to sanctions/penaltiesprovided under Articles XXI to
further monetary liability upon its claim.
XXIII of R.A. 9184 (see Annex J). [Emphasis supplied.] 

WHEREFORE, acting on the Report dated June 20, 2012 submitted

In addition, the provisions of R.A. No. 3019 may be taken into
by the Office of the Chief Attorney, the Court RESOLVES to: 
consideration in order to ascertain whether or not any act or omission
committed by any party, including Ms. Dumdum, resulted in or caused
undue injury to the Government. However, it is not the Court but 1. CONSIDER the claim of Artes International, Inc. for payment
another office that should make the ascertainment in that regard.  extinguished in accordance to the unilateral Release, Waiver &
Quitclaim executed and submitted by Artes International, Inc.;
and
No personal liability on the part of 
Chief Justice Panganiban
2. FURNISH a copy of this RESOLUTION to the OFFICE OF
THE OMBUDSMAN and the COMMISSION ON AUDIT as
We have found nothing in the records that established former Chief basis for whatever further action may be warranted or
Justice Panganiban's privity to the contracts entered into by Ms. necessary to be taken against MS. EVELYN DUMDUM.
Dumdum with Artes. Although he had approved, belatedly, the
budgets for the holding of the National Forum and the Global Forum in
The matter subject of this case is now
the respective amounts of P7.5 million and P20.6 million, his approval
considered CLOSED and TERMINATED.
was within his official authority to grant as the Chief Justice.

SO ORDERED.
The documents presented for Chief Justice Panganiban's approval had
undergone the presumed study and verification by the PMO under Ms.
Dumdum as well as by the committee constituted for the purpose. He
must have relied in utmost good faith on his subordinates, upon
whom the primary responsibility of ensuring that all procurement of
goods and services were within the limits required by the laws and the
procurement rules. Such reliance in good faith absolved him from any
personal liability in the absence of proof of any conspiracy between
them.

Conclusion