G.R. No. L-69668 - People vs. Tempongko, Jr.

The petitioners, officers and employees of the National Commission on Indigenous Peoples (NCIP), participated in NCIP’s Masters in Public Management (MPM) Scholarship Program at Ateneo de Manila University (ADMU).
The NCIP paid ADMU a total amount of ₱1,462,358.04 for tuition and miscellaneous fees of twenty-four NCIP officials and employees enrolled in the said program.
NCIP Board of Trustees, under Resolution No. 084-2012 dated December 7, 2012, authorized NCIP to enter into a Memorandum of Agreement (MOA) with ADMU for the program, initially for twenty-five scholars, later reduced to twenty-four.
To fund the scholarship, NCIP passed Resolution No. 088-2012 on December 19, 2012, realigning the agency’s unutilized 2011 budget amounting to ₱13,690,090.88. Of this, ₱3,095,829.25 was allocated for tuition, miscellaneous, and transportation expenses.

The Commission on Audit (COA) performed a post-audit and raised concerns through Audit Observation Memorandum No. 2013-02(12). The memorandum stated:

Granting scholarships to NCIP officials and employees was irregular as it was not part of NCIP’s mandated functions.
The ₱1,462,358.04 paid was not appropriated in NCIP’s 2012 budget.
The availability of funds was not certified by the agency’s Accountant as required.
The program cost was excessive, choosing ADMU over less expensive programs at State Universities and Colleges.

NCIP responded that the “Human Resource Development” was proposed but disapproved by the Department of Budget and Management (DBM) for FY 2012. Despite this, NCIP realigned savings from its 2011 budget balance to fund the project.
COA issued Notice of Disallowance No. 2013-001 for the amount of ₱1,462,358.04 paid to ADMU on grounds that the scholarship program was not included in the 2012 Agency Budget Matrix; there was no approved procurement plan; no public bidding; and some scholars already held Master’s degrees.

Aurora M. Tolete – Chief Administrative Officer/Budget Officer V (allocated funds without budgetary authority)
Darrow P. Odsey – Director IV (certified necessity and legality of budget for a non-budgetary program)
Gladys Minerva N. Bilibli – Chief Accountant (certified supporting documents despite absence of Fund Availability Certificate)
Zenaida Brigida H. Pawid – Chairperson (approved payment and signed MOA)

24 NCIP personnel/scholars were listed as recipients of the disallowed payments.
ADMU was excluded from liability as they submitted all required documents.

COA-NGS Cluster 1 partially granted the appeal, excluding the scholars and ADMU from liability but affirming the disallowance as to NCIP officials.
COA En Banc affirmed the disallowance in full, ruling that the scholarship program was not part of the 2012 budget and thus could not be legally funded through augmentation from savings. It ordered supplemental disallowance for other NCIP officers who approved the initial resolution authorizing the MOA.

NCIP officers argued that the scholarship program was covered under the 2011 budget’s "General Administration and Support Program," which included training and scholarship services.
They asserted that although the program was administered in 2012, funding through augmentation from the unutilized funds of 2011 was proper.
Petitioners claimed good faith in certifying and affirming payments based on the necessity and completeness of supporting documents.
Pawid separately asked for suspension of the petition pending resolution of the supplemental notice of disallowance against other officers.
COA responded by confirming the absence of appropriation for the scholarship in the 2012 budget and stated the supplemental disallowance did not affect petitioners.

Did the Commission on Audit (COA) commit grave abuse of discretion in affirming the Notice of Disallowance for the disbursed amount?
Are petitioners personally liable to refund the full disallowed amount of ₱1,462,358.04?