Is it normal for child to have diaper rash due to bowel movements and could it be something wrong with formula?

It is not uncommon: Careful with the baby wipes which also can lead to more irritation. I prefer just wash cloth and water when possible at home. try a little desitin (zinc oxide diaper cream) and corn starch to keep bum dry and leave diaper off if possible for longer periods of time to let skin stay drier.

Diaper rash: Stools can cause a diaper rash from irritation of skin. If a child has watery stools, fussiness with feeds, emesis, blood in stools than formula allergy may be a cause.