THE Commission on Audit (COA) has disallowed a P234-million lease contract entered into by the previous officials of state-owned Philippine Amusement and Gaming Corp. (Pagcor) for the rent of a casino and gaming space within the Museo ng Maynila property, site of the former Army and Navy Club.
In its notice of disallowance sent to current Pagcor Chairman and CEO Andrea Domingo dated August 15, the COA said the gaming agency in January paid Vanderwood Management Corp. the amount for the lease of 6,500 square meters of space in Museo ng Maynila Complex.
Pagcor’s payments represent the P13 million-per-month rent of the space for 12 months and another six months as its security deposit.
“The amount was disallowed in audit considering the premises to be leased was not yet existing at the time of the execution of the contract of lease,” the COA said in its notice.
“It is a common practice in the rental industry that payment of advance rental is made for a leased premise that is ready for occupancy or at least existing at the time of the execution of the lease contract,” the agency said.
He added that the P234-million payment of Pagcor is considered as “irregular expenditures.”
The COA said five previous officials of Pagcor were liable for the transaction, including past chairman and CEO Cristino Naguiat Jr.; Recto Baltazar, finance and treasury; Milagros Pauline Visque, engineering; Sharon Quintanilla, accounting; and Evelyn Salvador, internal audit.
The agency said Naguiat was found liable for approving the advance rental and security deposit; Baltazar was one of the signatories of the check payment; Visque certified the payment was necessary; and documents were “complete and proper.”
Quintanilla said the payment voucher was properly certified, while Salvador passed in audit the lease transaction.
The COA also said Vanderwood “is not the absolute owner of the subject property, but a mere sublessee, hence does not satisfy the definition of a lessor provided under Section 6 of Executive Order 301…”
The site is part of the Museo ng Maynila Complex, which is owned by the Manila City government and was leased to Oceanville Hotel and Spa Corp. for its revival and restoration.
Oceanville leased a portion of it to Vanderwood.
The COA also found Pagcor’s bids and awards committee decided to qualify Vanderwood in the postqualification process despite the non-submission of certain documents and noncompliance with some conditions of the technical requirements of the bid.