‘IMPROPER DISBURSEMENTS’ | NEA dismisses 2 Noceco GMs, 12 board of directors over alleged anomalies

The National Electrification Administration (NEA), with the conformity of the Philippine Rural Electric Cooperatives Association, Inc. (Philreca) and the Philippine Cooperative Development Authority, dismissed from service the general managers and members of the Board of Negros Occidental Electric Cooperative (Noceco) over alleged anomalies.

On the basis of the report and recommendation of the NEA Administrative Committee (ADCOM), the NEA Board of Administrators issued a decision on April 18, 2024, which meted on the said individuals the penalty of removal, the accessory penalty of disqualification from reinstatement or reemployment in any electric cooperative and/or to run as a candidate for a director position in any EC; and the forfeiture of their monetary benefits, Antonio Mariano Almeda, NEA administrator, read the said decision in a press conference via Zoom on Tuesday, April 23.

Meted in the decision, named by Almeda, were Noceco's former general manager Jonas Discaya and former acting general manager Ray Bustamante, and directors of Noceco, namely, Richard Benedicto, Raymundo Tongson Jr., Reynaldo Bedaure Jr., Eduardo Benjamin Alonso, Rolito Espinosa, John Peter Millan, Elbert Magbato, Rey Ronald Cabalde, Edmund Arceo, Ma. Rama Espinosa, Allan Paul Mirasol, and Jose Emeric Jabagat.

Almeda said Noceco's board of directors was found to have unduly granted themselves at least P65,534,504.20, representing numerous allowances and benefits.

Former general manager Discaya was found to have been unduly granted and received at least P20,128,907.28, representing improper increases in his salary and per diems as a GM of Noceco, excess gratuity pay, travel expenses, and other benefits.

Bustamante was found to have been unduly granted and received at least P2,127,111, representing the undue increase in his salary and per diems as a supposed GM of Noceco, as well as other unwarranted benefits.

Almeda said that from June 1 to June 29, 2023, NEA’s EC-Audit Department (NEA-ECAD) conducted a comprehensive operations audit of Noceco, which covered the electric coop’s operations from August 1, 2019 to April 30, 2023.

In its audit report, the NEA-ECAD found that alleged 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: for being above and beyond the allowable thresholds under the relevant NEA Rules and Guidelines; for being made without NEA's explicit approval; and 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 with the NEA ADCOM, which then conducted a motu proprio investigation of the case in accordance with due process and its Administrative Rules of Procedure, Almeda said.

Discaya and Bustamante were also shown to have been involved in the improper disbursements covered by the Audit Report, said Almeda.

"In sum, the concerned directors, together with Discaya, admitted to being aware of the NEA's regulatory jurisdiction over electric cooperatives (ECs) registered with 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," the NEA's decision stated.

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, the decision further stated.

Discaya would eventually retire, and Noceco's Board would supposedly "appoint"  Bustamante as the supposed GM of the cooperative, again in blatant disregard of the NEA's Rules and Guidelines, it also stated.

Almeda further explained that Bustamante, upon his supposed "appointment," participated in NEA-led training and seminars, the purpose of which were to educate newly elected EC directors and EC officers of the pertinent NEA protocols.

Moreover, 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, Bustamante would still join Noceco's Board in disregarding those rules, which pertained to salaries, incentives, and monetary benefits.

The records also disclosed that  Bustamante, directly implemented and did not question the Noceco Board's policies on the matter despite receiving the necessary training/information and being in a position to do so as an ex-officio member of Noceco's Board of Directors.

"Bustamante was found to have likewise benefitted from the numerous unwarranted salaries, incentives, and monetary benefits involved in the audit," Almeda stressed.

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, Almeda further said.

He said the decision is appealable and that NEA has appointed Acting GM Engineer Domingo Santiago of Noceco.*