Former Pangasinan legislator now Department of Agrarian Reform Secretary Conrado Estrella III's ex-chief of staff, Lourd Dexter Manalo, has stepped out from liability in the disallowed transfer of P40 million Priority Development Assistance Fund to a bogus firm linked to alleged pork barrel mastermind Janet Lim Napoles.

The Commission on Audit said there is insufficient proof to hold Manalo accountable for the notices of disallowance issued in 2014 and 2015 over the release of P40 million to the National Livelihood Development Corp. in 2009 and 2010.

This came after Manalo presented a National Bureau of Investigation finding that his supposed signatures on various documents were forgeries.

Manalo was charged with involvement in NDs, but he filed an appeal, claiming that he was denied the right to defend himself, refute, and controvert the findings during critical stages of the CoA's investigations.

He argued he was not involved in the PDAF transactions despite documents such as the memorandum of agreement between NLDC and CAREDFI, project proposals, accomplishments reports, disbursement papers, acknowledgment receipts, and inspection and acceptance reports showing his signature.

He disclaimed the signatures and provided the NBI with a Questioned Documents Report indicating that handwriting experts determined the signatures were forged.

"This Commission cannot simply ignore and set aside the factual findings of the NBI," the CoA said.

"There is no evidentiary basis to conclude that Mr. Manalo participated in the disallowed transactions. Wherefore, the Appeal of Mr. Lourd Dexter D. Manalo, former Chief of Staff, Office of former Congressman Conrado M. Estrella III of the 6 District of Pangasinan, is hereby granted," it declared.

Based on the audit records, the P40 million was transferred in three tranches before being deposited to Napoles' Countrywide Agri and Rural Economic Development Foundation Inc., a foundation designated by Estrella as the "lead implementor" of his PDAF-funded projects in Pangasinan's Sixth District.

CoA said that P15 million in livelihood and development projects were intended for the municipalities of Asigna and San Manuel, P10 million for San Quintin and Tayug, and P15 million for other municipalities in the Sixth District. The CoA stated that the NLDC retained P1.2 million as a handling fee out of the P40 million.