821 Phil. 117
BERSAMIN, J.:
On October 3, 2001, the MWSS moved for the reconsideration of the NDs.[7] As a consequence, the COA Legal and Adjudication Office-Corporate (COA-LAO) modified its decision and allowed the payment of the mid-year financial assistance, year-end financial assistance, bigay-pala anniversary bonus, and medical allowance to employees already enjoying the benefits as of June 30, 1989,[8] or on or before the July 1, 1989 effectivity of R.A. No. 6758. The COA-LAO also allowed the PIB only to the extent of P2,000.00 per occupied/filled up position under Administrative Order No. 161; and the RATA equivalent to 40% of the basic salary to employees already employed and enjoying the benefit as of July 1, 1989, while the employees hired thereafter would receive RATA as authorized under the General Appropriations Act.[9]
Amount Disallowed Nature of Payment Reason for Disallowance 2001-025-05 (00)
2001-006-05 (00) P2,128,780.40
601,919.70Mid-Year FA -
CY-2000Violation of Section 12, RA 6758 2001-024-05 (00)
2001-022-05 (00) 1,929,610.60
799,682.04Year-End FA -
CY-2000Violation of Section 12, RA 6758 2001-021-05 (00) 742,573.90Bigay-Pala Anniv. Bonus Violation of Section 12, RA6758 2001-023-05 (00) 2,147,432.60PIB CY 1999 Violation of:
a) AO No. 161 dated Dec. 6, 1994
b) NCC No. 73 dated Dec. 27, 1994
c) NCC No. 73A dated Mar. 1, 1995 2001-019-05 (00) 235,000.00Medical Allowance CY 2000 Increase after 1989 is in violation of RA 6758 2001-018-05 (00) 155,838.32RATA (Jan.-Aug. 2000) Not entitled. Violation of Sec. 41 GAA 2000 and COA Memo No. 90-653 dated June 4, 1990 Total P8,740.837.56
WHEREFORE, foregoing premises considered, herein appeal is hereby DENIED for lack of merit and the following disallowances are hereby SUSTAINED, with some modifications in the amounts, viz:The COA Proper later denied the MWSS's motion for reconsideration with finality on January 6, 2011.[12]
Benefit Basis Amount DisallowedMid-Year FA 200 Per ND No. 2001-025-05 (00) P 2,128,780.40Mid-Year FA 2000 Per ND No. 2001-006-05 (00) 601,919.70Year-End FA 2000 Per ND No. 2001-024-05 (00) 1,929,610.60Year-End FA 2000 Per ND No. 2001-022-05 (00)
(as rectified by the Auditor) 735,243.34Bigay Pala Anniv Bonus Per ND No. 2001-021-05 (00) 742,573.90PIB Under ND No. 2001-023-05 (00)
Per computation 2,157,932.65Medical Allowance Under ND No. 2001-019-05 (00)
Per computation 287,500.00RATA Under ND No. 2001-018-05 (00)
Per computation 179,387.72TOTAL P8,762,948.31
The officials who approved/authorized the grant of subject benefits are required to refund the total disallowed amount of P8,762,948.31. The Supervising Auditor is also directed to inform this Commission of the settlement made thereon.[11]
Please withhold the payment of the salaries or any amount due to the above-named persons liable for the settlement of their liabilities pursuant to the NDs/Decisions referred to above, copies attached and made integral parts hereof.On August 20, 2015, the petitioners, asserting that the COA had no basis in rendering them personally liable to refund the disallowed amounts, filed a motion to set aside COE 2015-174.[15]
In case any of the above-named persons are no longer in the service, please cause the collection or settlement of the same directly from them, and inform this office within fifteen (15) days from receipt of this COE of efforts made to collect pursuant hereto.
Payment of salaries or any amount due them in violation of this instruction will be disallowed in audit and you will be held liable therefor.
If full settlement has been made, please disregard this COE, and furnish this office with authenticated copy/ies of official receipts or equivalent proof of settlement, for record and monitoring purposes.[14]
Please be informed that COA Resolution No. 2011-006 dated August 17, 2011, amended Section 9, Rule X of the 2009 Revised Rules of Procedure of the Commission on Audit and adopted Section 8, Rule 64 of the 1997 Revised Rules of Court, which provides:Accordingly, the petitioners have come to the Court for relief.A decision or resolution of the Commission upon any matter within its jurisdiction shall become final and executory after the lapse of thirty (30) days from notice of the decision or resolution.In view thereof, the assailed COA decision became final and executory in the absence of a Temporary Restraining Order issued by the SC. xxx[17]
The filing of a petition for certiorari shall not stay the execution of the judgment or final order or resolution sought to be reviewed, unless the Supreme Court shall direct otherwise upon such terms as it may deem just.
1. WHETHER OR NOT RESPONDENT COA COMMITTED GRAVE ABUSE OF DISCRETION, AMOUNTING TO LACK OF JURISDICTION, IN AFFIRMING THE DISALLOWANCE OF THE MID-YEAR FINANCIAL ASSISTANCE FOR CY 2000, YEAR-END FINANCIAL ASSISTANCE FOR CY 2000, BIGAY PALA 2000, ANNIVERSARY BONUS, PRODUCTIVITY AND INCENTIVE BONUS CY 1999, MEDICAL ALLOWANCE CY 2000 AND REPRESENTATION AND TRANSPORTATION ALLOWANCE (RATA) JANUARY-AUGUST 2000 GRANTED TO PETITIONER MWSS' EMPLOYEES AND OFFICIALS.The MWSS submits that the COA committed grave abuse of discretion in issuing the NDs inasmuch as the grant of the benefits by its Board of Trustees had legal bases, rendering the grant valid; that RA No. 6758 did not repeal the MWSS Charter, which afforded authority to the Board of Trustees to grant or to continue granting benefits to its employees; that the benefits specified in the Concession Agreement had been duly approved by then President Ramos, through Secretary Gregorio Vigilar of the Department of Public Works and Highways (DPWH); that the requirement that any other benefits granted must have authority from the President or the Department of Budget and Management (DBM) had thus been complied with; and that the grant of RATA had already been resolved in favor of the MWSS in Cruz v. Commission on Audit.[19]
2. WHETHER OR NOT RESPONDENT COA COMMITTED GRAVE ABUSE OF DISCRETION, AMOUNTING TO LACK OF JURISDICTION, IN RULING THAT THE OFFICIALS WHO APPROVED AND AUTHORIZED THE GRANT OF SUBJECT BENEFITS ARE REQUIRED TO REFUND THE TOTAL DISALLOWED AMOUNT.[18]
The petitioners allege that under Section 9, Rule X of the 2009 COA Rules of Procedure a decision of COA became final and executory after 30 days from notice thereof unless a motion for reconsideration or a recourse to the Court was seasonably filed; that COA instead applied its Resolution No. 2011-006 dated August 17, 2011, whereby it amended said Section 9 to provide that the petition for certiorari should not stay the execution of the decision unless the Court ordered so; and that the amendatory rule should not be held to apply to them retrospectively.I.
COA COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK/EXCESS OF JURISDICTION WHEN IT DEMANDED REFUND FROM THE PETITIONERS UNDER COE 2015-174 WHEN THEIR BAD FAITH AND LIABILITIES WERE NEVER DISCUSSED NOR ESTABLISHED UNDER THE DECISIONS RENDERED.II.
COA CARELESSLY LISTED ALL IDENTIFIABLE NAMES ON THE PAYROLLS WITHOUT ASSESSING THE NATURE OF THE CERTIFICATIONS MADE BY THE SIGNATORIES;
EXPENDITURE WAS LEGAL: PETITIONERS RELIED IN GOOD FAITH ON (1) THE CONFIRMATION MADE BY FORMER PRESIDENT FIDEL V. RAMOS, (2) BOARD RESOLUTIONS OF THE BOARD OF TRUSTEES AND (3) THE CERTIFICATION OF AVAILABILITY OF THE BUDGET WHEN THEY AFFIXED THEIR SIGNATURES ON THE PAYROLLS;
PETITIONERS WERE NOT DIRECTLY RESPONSIBLE FOR THE DISBURSEMENT: NONE OF THE PETITIONERS HAD THE POWER TO GRANT THE BENEFITS ASSAILED;
PETITIONERS ARE NOT ACCOUNTABLE OFFICERS UNDER SECTION 106 OF PD 1445 NEITHER POSSESSED NOR HAD CUSTODY OF GOVERNMENT FUNDS.III.
EXECUTION IS PREMATURE UNDER SECTION 9, RULE X OF THE 2009 COA RULES OF PROCEDURE (WITHOUT AMENDMENTS); APPLICATION OF COA RESOLUTION 2011-006 DATED AFTER THE FILING OF THE INSTANT PETITION IS MISPLACEDIV.
MWSS AND COA MUST DESIST FROM CARRYING OUT COE 2015-174 AND DEDUCTING FROM THE PETITIONERS' SALARIES THE ASSAILED DISALLOWANCES BECAUSE IT VIOLATES THE PETITIONERS' RIGHT TO DUE PROCESSV
THE EX PARTE ISSUANCE OF A WRIT OF PRELIMINARY INJUNCTION AND/OR TEMPORARY RESTRAINING ORDER IS PROPER TO RESTRAIN MWSS AND COA FROM IMMEDIATELY IMPLEMENTING COE 2015-174 AND CARRYING OUT THE DEDUCTIONS AGAINST PETITIONERS.
Section 16. Repeal of Special Salary Laws and Regulations. - All laws, decrees, executive orders, corporate charters, and other issuances or parts thereof, that exempt agencies from the coverage of the System, or that authorize and fix position classification, salaries, pay rates or allowances of specified positions, or groups of officials and employees or of agencies, which are inconsistent with the System, including the proviso under Section 2, and Section 16 of Presidential Decree No. 985 are hereby repealed. (Emphasis supplied)Upon the effectivity of R.A. No. 6758, government-owned and controlled corporations (GOCCs) were included in the Compensation and Position Classification System under the law. As the aforequoted provision indicates, R.A. No. 6758 has repealed all corporate charters of the GOCCs, and such repeal has been put to rest by this Court. In the 1999 ruling in Philippine International Trading Corporation v. Commission on Audit,[24] the Court opined:
xxx [T]he repeal by Section 16 of RA 6758 of "all corporate charters that exempt agencies from the coverage of the System" was clear and expressed necessarily to achieve the purposes for which the law was enacted, that is, the standardization of salaries of all employees in government owned and/or controlled corporations to achieve "equal pay for substantially equal work." Henceforth, PITC should now be considered as covered by laws prescribing a compensation and position classification system in the government including RA 6758. This is without prejudice, however, as discussed above, to the non-diminution of pay of incumbents as of July 1, 1989 as provided in Sections 12 and 17 of said law.[25]As things now stand, the governing boards of the GOCCs no longer wield the power to fix compensation and allowances of their personnel, including the authority to increase the rates, pursuant to their specific charters.
Section 12. Consolidation of Allowances and Compensation. - All allowances, except for representation and transportation allowances; clothing and laundry allowances; subsistence allowance of marine officers and crew on board government vessels and hospital personnel; hazard pay; allowances of foreign service personnel stationed abroad; and such other additional compensation not otherwise specified herein as may be determined by the DBM, shall be deemed included in the standardized salary rates herein prescribed. Such other additional compensation, whether in cash or in kind, being received by incumbents only as of July 1, 1989 not integrated into the standardized salary rates shall continue to be authorized.This provision consolidated or integrated allowances in the standardized salary in the Philippine position classification and compensation system, which previous laws on standardization of compensation of government officials and employees did not do. Presidential Decree No. 985, as amended by Presidential Decree No. 1597,[27] the law antecedent to Republic Act No. 6758, repealed all laws, decrees, executive orders, and other issuances or parts thereof that authorized the grant of allowances in favor of officials and employees occupying certain positions. Under Presidential Decree No. 985, allowances, honoraria, and other fringe benefits could only be granted to government employees upon approval of the President with the recommendation of the Commissioner of the Budget Commission.[28]
Existing additional compensation of any national government official or employee paid from local funds of a local government unit shall be absorbed into the basic salary of said official or employee and shall be paid by the National Government.
On February 15, 1999, DBM issued the Corporate Compensation Circular (DBM-CCC) No. 10 to initiate the rules and regulations implementing R.A. No. 6758 for the GOCCs and government financial institutions (GFIs). DBM-CCC No. 10 listed other non-integrated allowances allowed only to incumbents of positions authorized and actually receiving such allowances/benefits as of June 30, 1989.[31] Paragraph 5.4-5.6 of DBM-CCC No. 10 further provided:
- Representation and transportation allowances (RATA);
- Clothing and laundry allowances;
- Subsistence allowance of marine officers and crew on board government vessels;
- Subsistence allowance of hospital personnel;
- Hazard pay;
- Allowances of foreign service personnel stationed abroad; and
- Such other additional compensation not otherwise specified herein as may be determined by the DBM.
5.4. The following allowances/fringe benefits which were authorized to GOCCs/GFIs under the standardized Position Classification and Compensation Plan xxx pursuant to P.D. No. 985, as amended by P.D. No. 1597, the Compensation Standardization Law in operation prior to R.A. No. 6758, and to other related issuances are not to be integrated into the basic salary and allowed to be continued after June 30, 1989 only to incumbents of positions who are authorized and actually receiving such allowances/benefits as of said date xxx:Accordingly, the disallowed benefits and allowances of MWSS's officials and employees, with the exception of the RATA and the medical allowance, were not excluded by R.A. No. 6758 or any issuance by DBM. It is understood that as a general rule such benefits and allowances were already included and given to the officials and employees when they received their basic salaries. Their receipt of the disallowed benefits and allowances was tantamount to double compensation. It is thus incumbent upon the MWSS to prove that the disallowed allowances were sanctioned by the Office of the President or DBM, as the laws required.
5.4.1. Representation and Transportation Allowance (RATA)
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5.5. The following allowances/fringe benefits authorized to GOCCs/GFIs pursuant to the aforementioned issuances are not likewise to be integrated into the basic salary and allowed to be continued only for incumbents of positions as of June 30, 1989 who are authorized and actually receiving said allowances/benefits as of said date xxx:
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5.5.4. Medical/dental/optical allowances/benefits;
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5.6. Payment of other allowances/fringe benefits and all other forms of compensation granted on top of basic salary, whether in cash or in kind, not mentioned in Sub-Paragraphs 5.4 and 5.5 above shall continue to be not authorized. Payment made for such unauthorized allowances/fringe benefits shall be considered as illegal disbursement of public funds. (Bold underscoring supplied for emphasis)
The consequential outcome, under sections 12 and 17, is that if the incumbent resigns or is promoted to a higher position, his successor is no longer entitled to his predecessors RATA privilege or to the transition allowance. After 1 July 1989 the additional financial incentives such as RATA may no longer be given by GOCCs with the exemption of those which were authorized to be continued under Section 12 of RA 6758.In Philippine International Trading Corporation v. Commission on Audit,[33] we also held that incumbents as of July 1, 1989 should continue to receive the allowance mentioned in Section 12 even after R.A. No. 6758 took effect, viz.:
First of all, we must mention that this Court has confirmed in Philippine Ports Authority vs. Commission on Audit the legislative intent to protect incumbents who are receiving salaries and/or allowances over and above those authorized by RA 6758 to continue to receive the same even after RA 6758 took effect. In reserving the benefit to incumbents, the legislature has manifested its intent to gradually phase out this privilege without upsetting the policy of non-diminution of pay and consistent with the rule that laws should only be applied prospectively in the spirit of fairness and justice. xxxClearly, the Court has been very consistent in construing the second sentence in the first paragraph of Section 12, supra, as prescribing July 1, 1989 as the qualifying date to determine whether or not an employee was an incumbent and receiving the non-integrated remuneration or benefit for purposes of entitling the employee to its continued grant. Stated differently, those allowances or fringe benefits (whether RATA or other benefits) that have not been integrated into the standardized salary are allowed to be continued only for incumbents of positions as of July 1, 1989 and who were actually receiving said allowances or fringe benefits as of said date.[34]
Section 16. Determination of Persons Responsible/Liable.On the other hand, the solidary liability is in accordance with Book VI, Chapter V, Section 43 of the Administrative Code, to wit:
Section 16.1 The liability of public officers and other persons for audit disallowances/charges shall be determined on the basis of (a) the nature of the disallowance/charge; (b) the duties and responsibilities or obligations of officers/employees concerned; (c) the extent of their participation in the disallowed/charged transaction; and (d) the amount of damage or loss to the government, thus:
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16.1.3 Public officers who approve or authorize expenditures shall be held liable for losses arising out of their negligence or failure to exercise the diligence of a good father of a family.
Liability for Illegal Expenditures. - Every expenditure or obligation authorized or incurred in violation of the provisions of this Code or of the general and special provisions contained in the annual General or other Appropriations Act shall be void. Every payment made in violation of said provisions shall be illegal and every official or employee authorizing or making such payment, or taking part therein, and every person receiving such payment shall be jointly and severally liable to the Government for the full amount so paid or received.In Blaquera v. Alcala,[40] the Court did not require the officials and employees of the different government departments and agencies to refund the productivity incentive bonus they had received because of the absence of bad faith, and because the disbursement was made in the honest belief that the recipients deserved the amounts. The Blaquera ruling was modified in Casal v. Commission on Audit,[41] where the Court ruled that the approving officials were liable to refund the incentive award due to their patent disregard of the issuances of the President and the directives of COA. The officials' failure to observe the issuances amounted to gross negligence, which was inconsistent with the presumption of good faith. Applying both the Blaquera and the Casal rulings, we declared in Velasco v. Commission on Audit[42] that:
Similarly in the present case, the blatant failure of the petitioners approving officers to abide with the provisions of AO 103 and AO 161 overcame the presumption of good faith. The deliberate disregard of these issuances is equivalent to gross negligence amounting to bad faith. Therefore, the petitioners-approving officers are accountable for the refund of the subject incentives which they received.Based on the evolving jurisprudence, and in view of Section 16 of the 2009 Rules and Regulations on Settlement of Accounts, the approving officers of the MWSS were personally liable for the amount of disallowed benefits. Despite the lack of authority for granting the benefits, they still approved the grant and release of the benefits in excess of the allowable amounts and extended the same benefits to its officials and employees not entitled thereto, patently contravening the letter and spirit of R.A. No. 6758 and related laws. They were very adamant in their stance that R.A. No. 6758 did not apply to them despite its clear provisions and the relevant issuances of DBM, thereby deliberately disregarding the basic principle of statutory construction that when the law was clear, there should be no room for interpretation but only application. Moreover, as we have earlier pointed out, institutional practice is not an excuse to allow disbursements that were otherwise contrary to law.
However, with regard to the employees who had no participation in the approval of the subject incentives, they were neither in bad faith nor were they grossly negligent for having received the benefits under the circumstances. The approving officers' allowance of the said awards certainly tended to give it a color of legality from the perspective of these employees. Being in good faith, they are therefore under no obligation to refund the subject benefits which they received.
In its comment dated February 1, 2016, COA posited that the Board of Trustees of the MWSS should be held liable for the disallowed amounts, to wit:
PETITIONER POSITION Loida G. Ceguerra Division/Branch Manager - Asset Management and General Services Leonor C. Cleofas Acting Manager - Engineering and Project Management Office Ma. Lourdes R. Naz Department Manager - Office of the Board of Trustees Darlina T. Uy Department Manager - Board Secretariat/Legal Department Jocelyn M. Toledo OIC - Personnel/ OIC - Administrative Services Miriam S. Fulgueras Chief, Controllership and Accounting Section
As discussed in the Comment to the Petition filed by respondent before this Honorable Court, the Board failed to comply with proper requirements in granting the benefits.The petitioners in G.R. No. 220727 counter that the Board of Trustees that had authorized and approved the grant of the benefits should be held liable for the amounts and not them.
Petitioner now argues that the Board members who approved the benefits are not at fault and they should not be held liable.
Suffice it to say that being officials of MWSS, it is incumbent upon them to know the rules and law relative to the granting of benefits. Failure to comply with said rules constitutes gross negligence.
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| Very truly yours, |
(SGD) | |
FELIPA G. BORLONGAN-ANAMA | |
Clerk of Court |