MANILA, Philippines – The Commission on Audit (COA) has upheld the disallowance of payments for a more than P19-million road improvement project in Davao City after finding it overpriced by over 330% and riddled with construction deficiencies.

In a decision released on Monday, December 15, the COA en banc affirmed the ruling of state auditors in Davao Region on the P19.29-million Ma-a Radio Station Road–Davao City Diversion Road project undertaken by E. Gardiola Construction.

The firm is registered under the brother of Construction Workers Solidarity (CWS) Party-list Representative Edwin Gardiola.

Auditors said the contract price of P19.289 million exceeded COA’s estimated project cost of P4.478 million by 330.69%.

They also found that the project failed to comply with the standards set by the Department of Public Works and Highways (DPWH).

An inspection cited rusty rails, bolts, nuts and washers, guardrail posts without concrete foundations, and substandard road signs, pavement studs and guardrails, auditors said.

COA held liable DPWH district engineer Lorna Ricardo, assistant district engineer Milagros delos Reyes, engineers Dwight Vincent Fernandez, Eduardo Villar, Johnny dela Peña and Bernardo Engalan, construction and maintenance foreman William Paglinawan, and contractor E. Gardiola Construction.

The commission ordered them to refund P13.6 million in disallowed payments.

A technician, Rolly Tulayba, whose role was limited to zinc coating of the guardrails, was held liable for P4.76 million along with other officials of the DPWH-Davao City District Engineering Office.

“Since a disallowance or an audit finding of overpricing is not merely an audit opinion but an adjudication involving conclusions of wrong-doing on the part of the management causing damage to the government for which a financial recovery is to be exacted through the amount of disallowance, the amount of evidence to support the disallowance should be such as to establish with a reliable degree of certainty, the finding of overpricing,” read part of the 17-page COA en banc decision.

The COA said the matter would be referred to the Office of the Ombudsman for possible criminal and administrative charges.

Incidentally, the COA also noted that it had previously issued three other rulings sustaining disallowances involving separate infrastructure projects in Davao City, all awarded to E. Gardiola Construction.

Those projects were likewise found to be allegedly overpriced, failed to comply with structural requirements, and used substandard materials.

Documents showed the project was awarded in 2009 to E. Gardiola Construction under the DPWH’s Traffic Safety Project.

The DPWH later certified the project as completed in 89 days, prompting the release of full payment to the contractor on August 25, 2025.

The project was covered by a special audit conducted by COA-Davao on projects implemented by the DPWH in the region.

“Upon audit, the SAT issued Audit Observation Memorandum (AOM) No. 2011-1513 dated December 27, 2011 noting that the traffic safety project was grossly overpriced and not done in accordance with the approved plans and specifications as well as the contract,” the COA stated.

The COA found Ricardo liable for “authorizing the implementation and payments of the overpriced project,” while project engineers were faulted for allowing payment despite having reviewed project plans, programs of work, and detailed cost estimates that already showed inflated prices. – Rappler.com