LAZARO-JAVIER, J.:
5.7. The CNA Incentive for the year shall be paid as a one-time benefit after the end of the year, provided that the planned programs/activities/projects have been implemented and completed in accordance with the performance targets of the year. (emphasis and underscoring supplied)
1) | The ICAB paid CNA Incentives to its officials and employees twice for 2011 contrary to the provisions of DBM BC No. 2006-1, DBM Circular Letter No. 2011-9 and DBM BC No. 2011-5 dated February 1, 2006, September 29, 2011 and December 26, 2011, respectively; and |
2) | The amount of CNA Incentive paid for 2011 exceeded the ceiling amount of P25,000.00 each under DBM BC No. 2011-5. |
Name of Recipients | Amount under Payroll No. 2011-11-981 | SM Gift Pass Value | Total Amount Received | Allowed | Disallowed |
Jennifer Ma. Abenido | P20,000.00 | P23,800.00 | P43,800.00 | P25,000.00 | P18,800.00 |
Ellain D. Bayongasan | 20,000.00 | | 20,000.00 | 25,000.00 | |
Peter Belles | 20,000.00 | 23,800.00 | 43,800.00 | 25,000.00 | 18,800.00 |
Gina C. Escalante | 20,000.00 | 23,800.00 | 43,800.00 | 25,000.00 | 18,800.00 |
Danio P. Gatmaitan | 20,000.00 | 23,800.00 | 43,800.00 | 25,000.00 | 18,800.00 |
AngelitaN. Guerinia | 20,000.00 | 23,800.00 | 43,800.00 | 25,000.00 | 18,800.00 |
Hernan T. Mangabat | 20,000.00 | 23,800.00 | 43,800.00 | 25,000.00 | 18,800.00 |
Almia T. Nanagad | 20,000.00 | 23,800.00 | 43,800.00 | 25,000.00 | 18,800.00 |
Marissa G. Prades | 20,000.00 | 23,800.00 | 43,800.00 | 25,000.00 | 18,800.00 |
Carina Sangil | 20,000.00 | 23,800.00 | 43,800.00 | 25,000.00 | 18,800.00 |
Janet T. Santos | 20,000.00 | 23,800.00 | 43,800.00 | 25,000.00 | 18,800.00 |
Luzviminda Santos/Palencia | 20,000.00 | 23,800.00 | 43,800.00 | 25,000.00 | 18,800.00 |
Marivir Tungol | 20,000.00 | 15,900.00 | 35,900.00 | 25,000.00 | 10,900.00 |
Bernadette B. Abejo | 20,000.00 | 23,800.00 | 43,800.00 | 25,000.00 | 18,800.00 |
Rutchel Pocdihon | | 4,400.00 | 4,400.00 | 25,000.00 | |
Imelda Ronda | | 23,800.00 | 23,800.00 | 25,000.00 | |
Total | P280,000.00 | P329,700.00 | P609,700.00 | P400,000.00 | P236,500.00 |
Name | Position/Designation | Nature of Participation |
Atty. Bernadette B. Abejo | Executive Director | For approving the transaction |
Angelita N. Guerinia | Acting Accountant | For certifying that supporting documents are complete |
Gina C. Escalante | Social Welfare Officer V | For certifying supporting documents are valid, proper and legal |
Jennifer Ma. Abenido, et al. | As Payees | For accepting payments of CNA in excess of P25,000.00 |
WHEREFORE, premises considered, this Office DENIES herein appeal and AFFIRMED ND No. 2012-002-101-(11) disallowing the total amount of P236,500.00 corresponding to the excessive CNA incentives granted to qualified employees of the ICAB, which they should immediately refund.[10]
WHEREFORE, premises considered, the Petition for Review of Director Bernadette B. Abejo, Executive Director, Inter-Country Adoption Board (ICAB), is hereby DENIED. Accordingly, Commission on Audit. National Government Sector-Cluster 6 Decision No. 2015-020 dated December 14, 2015, which affirmed Notice of Disallowance No. 2012-002-101-(11) dated February 28, 2012, on the excess payment of Collective Negotiation Agreement incentives to ICAB employees, in the total amount of P236,500, is AFFIRMED.[17]
1) | Did the Decision No. 2020-127 dated January 27, 2020 of the COA Proper validly disallow the payment of CNA Incentives to the qualified employees of the ICAB in the amount of P236,500.00? |
2) | Is petitioner, as approving authority, solidarity liable to refund the disallowed amount? |
3) | Is petitioner, as recipient of the CNA Incentive, personally liable to return the alleged excess amount she had received? |
E. The Rules on Return
In view of the foregoing discussion, the Court pronounces:
1. If a Notice of Disallowance is set aside by the Court, no return shall be required from any of the persons held liable therein.
2. If a Notice of Disallowance is upheld, the rules on return are as follows:(a) Approving and certifying officers who acted in good faith, in regular performance of official functions, and with the diligence of a good father of the family are not civilly liable to return consistent with Section 38 of the Administrative Code.
(b) Approving and certifying officers who are clearly shown to have acted in bad faith, malice, or gross negligence are, pursuant to Section 43 of the Administrative Code of 1987, solidarily liable to return only the net disallowed amount which, as discussed herein, excludes amounts excused under the following Sections 2c and 2d.
(c) Recipients – whether approving or certifying officers or mere passive recipients – are liable to return the disallowed amounts respectively received by them, unless they are able to show that the amounts they received were genuinely given in consideration of services rendered.
(d) The Court may likewise excuse the return of recipients based on undue prejudice, social justice considerations, and other bona fide exceptions as it may determine on a case to case basis. (Emphases supplied)
Petitioner's erroneous interpretation of the DBM circular aside, the action of petitioner was indicative of good faith because he acted in an honest belief that the grant of the CNA Incentives had legal bases. It is unfair to penalize public officials based on overly stretched and strained interpretations of rules which were not that readily capable of being understood at the time such functionaries acted in good faith. If there is any ambiguity, which is actually clarified years later, then it should only be applied prospectively. A contrary rule would be counterproductive.
Thus, although this Court considers the questioned Notices of Disallowance valid, this Court also considers it to be in the better interest of justice and prudence that petitioner, other officials concerned and the employees who benefited from the CNA Incentives be relieved of any personal liability to refund the disallowed amount.[31]
As a supplement to the Madera Rules on Return, the Court now finds it fitting to clarify that in order to fall under Rule 2c, i.e., amounts genuinely given in consideration of services rendered, the following requisites must concur:(a) the personnel incentive or benefit has proper basis in law but is only disallowed due to irregularities that are merely procedural in nature; and
(b) the personnel incentive or benefit must have a clear, direct, and reasonable connection to the actual performance of the payee-recipient's official work and functions for which the benefit or incentive was intended as further compensation.
Verily, these refined parameters are meant to prevent the indiscriminate and loose invocation of Rule 2c of the Madera Rules on Return which may virtually result in the practical inability of the government to recover. To stress, Rule 2c as well as Rule 2d should remain true to their nature as exceptional scenarios; they should not be haphazardly applied as an excuse for non-return, else they effectively override the general rule which, again, is to return disallowed public expenditures.
With respect to the first requisite above mentioned, Associate Justice Alfredo Benjamin S. Caguioa (Justice Caguioa) – the ponente of Madera – aptly points out that the exception under Rule 2c was not intended to cover compensation not authorized by law or those granted against salary standardization laws. Thus, amounts excused under the said rule should be understood to be limited to disbursements adequately supported by factual and legal basis, but were nonetheless validly disallowed by the COA on account of procedural infirmities. As the esteemed magistrate observes, these may include amounts, such as basic pay, fringe benefits, and other fixed or variable forms of compensation permitted under existing laws, which were granted without the due observance of procedural rules and regulations (e.g., matters of form, or inadequate documentation supplied/rectified later on). As Justice Caguioa explains:Under this rubric, the benefits that the Court may allow payees to retain as an exception to Rule 2c's rule of return on the basis of solutio indebiti are limited to compensation authorized by law including: (i) basic pay in the form of salaries and wages; (ii) other fixed compensation in the form of fringe benefits authorized by law; (iii) variable compensation (e.g., honoraria or overtime pay) within the amounts authorized by law despite the procedural mistakes that might have been committed by approving and certifying officers. These, to my mind, are the only forms of compensation that can truly be considered "genuinely given in consideration of services rendered," such that their recovery (by the government) which results from a disallowance (again, only because of procedural mistakes that might have been committed by approving and certifying officers) means the government is unjustly enriched (i.e., it benefitted from services received from its employees without making payment for it).
The exception to Rule 2c was not intended to cover all allowances that can be considered "genuinely given in consideration of services rendered" so as to defeat the general rule that payees are liable to return disallowed personnel benefits that they respectively received.
Aside from having proper basis in law, the disallowed incentive or benefit must have a clear, direct, and reasonable connection to the actual performance of the payee-recipient's official work and functions. Rule 2c after all, excuses only those benefits "genuinely given in consideration of services rendered"; in order to be considered as "genuinely given," not only does the benefit or incentive need to have an ostensible statutory/legal cover, there must be actual work performed and that the benefit or incentive bears a clear, direct, and reasonable relation to the performance of such official work or functions. To hold otherwise would allow incentives or benefits to be excused based on a broad and sweeping association to work that can easily be feigned by unscrupulous public officers and in the process, would severely limit the ability of the government to recover. (Emphases supplied)