Case Digest (G.R. No. 258527)
Facts:
Arthur N. Aguilar, Ma. Theresa T. Defensor, Jeremy Z. Parulan, Fermin S. Lusung, Antonio T. Vilar, Enrique C. Cuejilo, Jr., Guillermo N. Hernandez, Rolando L. Macasaet, and Wilfredo P. Cu v. Commission on Audit, G.R. No. 258527, promulgated May 21, 2024, before the Supreme Court En Banc, Inting, J., writing for the Court. The petition seeks certiorari under Rule 64 in relation to Rule 65 challenging COA Resolution No. 2020-479, which affirmed with modification Notice of Disallowance (ND) No. 11-002-(2007-2010) that disallowed PHP 90,784,975.21 in gratuity payments by Philippine National Construction Corporation (PNCC) to directors and senior officers for 2007–2010.
PNCC (formerly CDCP) had undergone debt-to-equity conversion in the 1980s, placing majority ownership with the Government and prompting its classification as an acquired-asset corporation slated for privatization. In anticipation of privatization and turnover of toll operations, PNCC’s Board adopted several resolutions (2005–2009) creating a retirement/gratuity fund and authorizing gratuity payments to directors and senior officers. On post-audit, a COA Audit Team issued ND No. 11-002-(2007-2010) (July 8, 2011) disallowing those gratuity disbursements as contrary to COA Circular No. 85-55-A, DBM Circular Letter No. 2002-2, and other issuances, and for being excessive given PNCC’s losses; it named various officials liable for recovery.
Appellants (some of the payees and approving officers) appealed to the COA Corporate Government Sector (CGS), which in Decision No. 2014-02 affirmed the ND. They then petitioned the COA Proper; the COA Proper initially dismissed for late filing but, on reconsideration in Resolution No. 2020-479, found the appeal timely, affirmed the ND with modification (excluding one officer from liability), and directed further verification as to participation. Aggrieved petitioners brought the present petition to the Supreme Court for certiorari alleging grave abuse of discretion by COA.
Before the Court, COA argued PNCC is a GOCC subject to audit and to limits on granting additional benefits (citing EO 292, PD 1597 Sec. 6, OP Memorandum Order No. 20, AO No. 103, and DBM Circular No. 2002-2). Petitioners relied on earlier decisions (notably Pabion and Cuenca) to contend PNCC was then a private corporation and that Radstock...(Subscriber-Only)
Issues:
- Were ND No. 11-002-(2007-2010) and its findings already final and executory as to petitioners Aguilar and Lusung because they failed to comply with required COA appeal procedures?
- Did the Commission on Audit act with grave abuse of discretion in affirming the disallowance of the gratuity benefits in Resolution No. 2020-479?
- Is PNCC a GOCC for purposes of the rules governing additional compensation, and does the Court’s ruling in Strategic Alliance Dev’t Corp. v. Radstock Securities Limited apply retroactively to the Board resolutions at issue?
- Were the gratuity benefits paid to PNCC directors and senior officers from 2007 to 2010 disallowable as additional compensation under applicable laws and issuances?
- Are the petitioners (approving officers and payees) civilly liable to return the disallowed amoun...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)