Title
Bases Conversion Development Authority vs. Commission on Audit
Case
G.R. No. 142760
Decision Date
Aug 6, 2002
BCDA granted employees benefits exceeding Central Bank standards; COA disallowed some as excessive. Supreme Court upheld disallowance of loyalty award and salary increment but allowed children's allowance as reasonable.
Font Size:

Case Digest (G.R. No. 142760)

Facts:

Creation and Mandate of BCDA

  • The Bases Conversion Development Authority (BCDA) was created on March 13, 1992, under Republic Act (R.A.) No. 7227, also known as the "Bases Conversion and Development Act of 1992."
  • Its primary mandate is to manage the Clark and Subic military reservations/camps and their extensions, and to implement a comprehensive development plan for their conversion into productive uses to promote economic and social development.
  • Funding for BCDA comes from the proceeds of the sale of certain military camps, including Fort Bonifacio and Villamor (Nichols) Air Base.

Compensation and Benefits Scheme

  • The BCDA Board of Directors, appointed by the President with the consent of the Commission on Appointments, is authorized to determine the organizational structure, duties, and compensation of BCDA employees.
  • The Board adopted a compensation and benefit scheme "at least equivalent to that of the Central Bank of the Philippines."
  • The BCDA Board granted several benefits to its employees, including:
    1. Loyalty Service Award for 1995
    2. Children's Allowance
    3. Anniversary Bonus
    4. 8th Step Salary Increment effective January 1995

Disallowance by COA

  • On May 22, 1996, State Auditor Nida M. Blanco of the Commission on Audit (COA) disallowed the aforementioned benefits, citing that they were excessive, illegal, or not in accordance with the Central Bank benefit package.
  • The COA sought the opinion of the Department of Budget and Management (DBM) before issuing the disallowance.
  • The disallowed amounts were as follows:
    • Loyalty Service Award: P85,000.00 (given to employees who had not yet reached the required 10 years of service).
    • Children's Allowance: P53,754.00 (P100.00 per child, exceeding the allowed P30.00 under the Central Bank package).
    • Anniversary Bonus: P85,000.00 (P3,000.00 per employee, exceeding the allowed P1,800.00).
    • 8th Step Salary Increment: P346,703.56 (no legal basis under DBM Circular Letter No. 7-96).

Presidential Approval

  • On August 25, 1997, BCDA Chairman Victorino A. Basco requested post-facto approval/ratification of the benefits from then-President Fidel V. Ramos.
  • On October 6, 1997, the President approved the request, and the Office of the President informed the DBM of this approval on October 9, 1997.

COA Decision and Resolution

  • In its Decision No. 99-057 dated March 23, 1999, the COA lifted the disallowance only on the Anniversary Bonus due to the President's approval but affirmed the disallowance of the other benefits.
  • The BCDA filed a motion for partial reconsideration, which was denied with finality in COA Resolution No. 2000-089 dated March 7, 2000.

Issue:

  1. Whether the COA committed grave abuse of discretion in disallowing the:
    • Loyalty Service Award
    • 8th Step Salary Increment
    • Children's Allowance
  2. Whether the BCDA Board's grant of benefits higher than the Central Bank's package was reasonable and in accordance with existing DBM policies.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Conclusion:

  • The COA's Decision No. 99-057 and Resolution No. 2000-089 were modified to set aside the disallowance of the Children's Allowance. The disallowance of the Loyalty Service Award and 8th Step Salary Increment was upheld.


Jur is an AI-powered legal research platform in the Philippines for case digests, summaries, and jurisprudence. AI-generated content may contain inaccuracies; please verify independently.