Title
Abejo vs. Commission on Audit
Case
G.R. No. 254570
Decision Date
Jun 29, 2021
ICAB's CNA Incentives disallowed for exceeding DBM limits; petitioner absolved from liability due to good faith, no gross negligence.
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Case Digest (G.R. No. 254570)

Facts:

Background of the Case:

  • Petitioner Bernadette Lourdes B. Abejo, Executive Director of the Inter-Country Adoption Board (ICAB), was held solidarily liable by the Commission on Audit (COA) to return disallowed Collective Negotiations Agreement (CNA) Incentives for 2011 amounting to P236,500.00.

Grant of CNA Incentives:

  • From 2008 to 2011, ICAB granted CNA Incentives to its employees based on Department of Budget and Management (DBM) Budget Circular (BC) No. 2006-1, which allowed the payment of CNA Incentives as a one-time benefit after the end of the year, provided that planned programs/activities/projects were completed.
  • DBM BC No. 2011-5, issued on December 26, 2011, set a P25,000.00 cap on CNA Incentives per employee.

Audit Findings:

  • COA found that ICAB paid CNA Incentives twice in 2011 (on November 28, 2011, and December 23, 2011) and exceeded the P25,000.00 limit, resulting in a disallowance of P236,500.00.
  • Petitioner argued that the payments were made in good faith and that DBM BC No. 2011-5 was only posted on the DBM website in January 2012, after the payments were made.

Liability of Petitioner:

  • Petitioner, as the approving authority, was held liable for the disallowed amount, along with other ICAB officers and employees who certified or received the payments.

Issue:

  1. Did the COA Proper validly disallow the payment of CNA Incentives to ICAB employees in the amount of P236,500.00?
  2. Is petitioner, as the approving authority, solidarily liable to refund the disallowed amount?
  3. Is petitioner, as a recipient of the CNA Incentive, personally liable to return the excess amount she received?

Ruling:

  1. Validity of the Disallowance: The COA's disallowance was valid. ICAB violated DBM BC No. 2006-1 by paying CNA Incentives twice before the end of 2011 and exceeding the P25,000.00 limit under DBM BC No. 2011-5.
  2. Solidary Liability of Petitioner: Petitioner, as the approving authority, is not solidarily liable to return the entire disallowed amount in the absence of bad faith, malice, or gross negligence. Her misinterpretation of DBM BC No. 2006-1 was made in good faith.
  3. Personal Liability of Petitioner: Petitioner, as a recipient, is not liable to return the excess amount she received, as the CNA Incentives were genuinely given in consideration of services rendered and had a proper legal basis.

Ratio:

  1. Violation of DBM Circulars: ICAB violated DBM BC No. 2006-1 by paying CNA Incentives twice before the end of the year and exceeded the P25,000.00 limit under DBM BC No. 2011-5. The disallowance was justified.
  2. Good Faith Defense: Petitioner acted in good faith and was not grossly negligent in approving the payments. Her misinterpretation of DBM BC No. 2006-1 does not warrant solidary liability.
  3. Rules on Return: Under the refined Rules on Return in Madera v. COA and Abellanosa v. COA, petitioner is excused from returning the disallowed amount as the CNA Incentives were genuinely given for services rendered and had a proper legal basis.

Final Decision: The COA's decision was affirmed with modification. Petitioner was absolved from solidary liability to return the entire disallowed amount and from personal liability to return the excess amount she received.


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