G.R. No. 254570 - Abejo vs. Commission on Audit

From 2008 to 2011, the Inter-Country Adoption Board (ICAB) granted Collective Negotiations Agreement (CNA) Incentives to its employees pursuant to:

Department of Budget and Management (DBM) Budget Circular (BC) No. 2006-1 dated February 1, 2006, and
Article XIII of the CNA between ICAB and the ICAB Employees Association (ICABEA).

DBM BC No. 2006-1, specifically Section 5.7, mandated that the CNA Incentive should be paid as a one-time benefit after the end of the year, provided that the planned programs, activities, or projects had been implemented and completed in accordance with the performance targets.
Prior to 2011, the CNA Incentives had no fixed limit as the amount was dependent on the annual savings generated from cost-cutting measures and systems development of the agency.

On December 26, 2011, DBM issued BC No. 2011-5, which imposed a P25,000.00 cap per qualified employee for CNA Incentives.
Despite the new circular, ICAB processed and paid CNA Incentives for 2011 on two separate occasions:

The initial payment on November 28, 2011, and
The final payment on December 23, 2011, after determining that all programs, projects, and activities had been completed.

Both payments were made before the fiscal year’s end, contrary to the condition in DBM BC No. 2006-1.

A post-audit by Supervising Auditor Lucena D. Gana and Audit Team Leader Johnny S. Datug uncovered two main irregularities:

CNA Incentives were paid twice for 2011, violating Section 5.7 of DBM BC No. 2006-1.
The incentives granted surpassed the threshold amount of P25,000.00 per employee set by DBM BC No. 2011-5.

As a result, Notice of Disallowance No. 2012-002-101-(11) dated February 28, 2012 was issued, disallowing an excess payment of P236,500.00.
The notice itemized the excess amounts and identified officials held liable, including:

Petitioner Bernadette Lourdes B. Abejo, Executive Director, for approving the transaction.
Other officers and employees responsible for certifying and accepting the payments.

The COA a National Government Sector, through Decision No. 2015-020 dated December 14, 2015, affirmed the Notice of Disallowance.

The decision cited that CNA Incentives should only be paid once after the end of the year and not exceed the P25,000.00 limit.
It held that the ICAB’s violation warranted disallowance of the excessive amount.

The payment complied with DBM BC No. 2006-1 since it was made prior to the year’s end.
The absence of a fixed incentive amount under the circular meant that the P25,000.00 limit did not apply.
The payments were made in good faith in line with the existing guidelines.

The Office of the Solicitor General (OSG) defended the COA’s position, emphasizing the clear conditions in DBM BC Nos. 2006-1 and 2011-5.

Petitioner elevated the case through a petition for certiorari under Rule 64 of the Rules of Civil Procedure.
She charged the COA with grave abuse of discretion and alleged excess or lack of jurisdiction regarding:

Did Decision No. 2020-127 dated January 27, 2020, validly disallow the payment of CNA Incentives amounting to P236,500.00?

Is petitioner, as the approving authority, solidarily liable to refund the disallowed amount?

Is petitioner personally liable to return the excess amount she received under the CNA Incentive scheme?