Last 01 June 2023 to 29 June 2023, the National Electrification Administration’s (“NEA”) EC-Audit Department (“NEA-ECAD”) conducted a Comprehensive Operations Audit of the Negros Occidental Electric Cooperative (“NOCECO”). The said audit covered NOCECO’s operations during the period of 01 August 2019 to 30 April 2023.
In its Audit Report, the NEA-ECAD found that improper disbursements were made by the NOCECO Management and Board of Directors during the audit period. The disbursements were classified as “improper” mainly due to the following reasons: (a) for being above and beyond the allowable thresholds under the relevant NEA Rules and Guidelines; (b) for being made without NEA’s explicit approval; and (c) despite NOCECO’s attention being called in previous audit findings, for being made with the deliberate failure to submit the appropriate Board Resolutions required by NEA to evaluate the fund disbursements.
On this basis, the NEA-ECAD endorsed its findings to the NEA Administrative Committee (“ADCOM”). The NEA-ADCOM then conducted a Motu Proprio investigation of the case in accordance with due process and its Administrative Rules of Procedure.
The records of the case disclose the involvement of the following directors of NOCECO:
- Richard Benedicto;
- Raymundo Tongson, Jr.;
- Reynaldo Bedaure, Jr.;
- Eduardo Benjamin Alonso;
- Rolito Espinosa;
- John Peter Millan;
- Elbert Magbato;
- Rey Ronald Cabalde;
- Edmund Arceo;
- Rama Espinosa;
- Allan Paul Mirasol; and
- Jose Emeric Jabagat (deceased)
Among other officers, NOCECO’s former General Manager (GM) Jonas F. Discaya and Engr. Ray V. Bustamante were also shown to have been involved in the improper disbursements covered by the Audit Report.
In sum, the concerned Directors, together with former GM Jonas F. Discaya, admitted to being aware of the NEA’s regulatory jurisdiction over electric cooperatives (ECs) registered with the Cooperative Development Authority (such as NOCECO). Nevertheless, they also admit the fact that they chose to disregard the same and instead continued to unilaterally and unduly grant themselves numerous monetary benefits
It should be noted that NEA, under Republic Act No. 10531, is granted regulatory jurisdiction over all electric cooperatives regardless of registration, and such authority is confirmed by the Supreme Court through jurisprudence.
Former GM Discaya would eventually retire, and NOCECO’s Board would supposedly “appoint” Engr. Bustamante as the supposed GM of the cooperative, again in blatant disregard of the NEA’s Rules and Guidelines.
For proper context, Engr. Bustamante, upon his supposed “appointment”, participated in NEA-led trainings and seminars, the purpose of which were to educate newly elected EC directors and EC officers of the pertinent NEA protocols. Moreover, Engr. Bustamante was also shown to have complied with at least some of the NEA’s Guidelines.
However, despite having complied with certain NEA issued Guidelines, Engr. Bustamante would still join NOCECO’s Board in disregarding those rules which pertained to salaries, incentives, and monetary benefits. The records also disclosed that Engr. Bustamante, directly implemented and did not question the NOCECO Board’s policies on the matter despite receiving the necessary trainings/information and being in a position to do so as an ex-officio member of NOCECO’s Board of Directors.
Notably, Engr. Bustamante was found to have likewise benefitted from the numerous unwarranted salaries, incentives, and monetary benefits involved in the audit.
In summary, NOCECO’s Board of Directors were found to have unduly granted themselves at least PHP65,534,504.20, representing numerous allowances and benefits.
Former GM Discaya was found to have been unduly granted and received at least PHP20,128,907.28, representing improper increases in his salary and per diems as a GM of NOCECO, excess gratuity pay, travel expenses and other benefits.
Engr. Bustamante was found to have been unduly granted and received at least PHP2,127,111.00, representing undue increase in his salary and per diems as a supposed GM of NOCECO, as well as other unwarranted benefits.
On the basis of the NEA-ADCOM’ report and recommendation, the NEA Board of Administrators issued a Decision on 18 April 2024 which meted on the above individuals: (a) the penalty of removal; (b) the accessory penalty of disqualification from reinstatement or reemployment in any EC and/or to run as a candidate for a director position in any EC; and (c) the forfeiture of their monetary benefits.
Other NOCECO officers were meted the penalty of suspension for their participation in the subject disbursements.
NEA has included in the Decision the referral of the matter to the Department of Justice for the possible prosecution of criminal liabilities.
