Case Digest (G.R. No. 143581)
Facts:
The case involves a petition for certiorari filed by Teresita P. De Guzman, Godiula T. Guinto, Viveca V. Villafuerte, Wilhelmina A. Aquino, Renato S. Rondez, Moises P. Cating, Ramsay M. Colorado, Gina Romillo-Co, Emmanuel B. Malicdem, and Maria Rosario R. Lopez (referred to collectively as the petitioners) against the Commission on Audit (COA), the respondent. The case originated from the issuance of Notice of Disallowance No. 12-023-101-(09) on May 15, 2012, regarding the payment of a Centennial Bonus amounting to ₱1,233,860.50 to officers and employees of the Baguio Water District (BWD) for the calendar year 2009. The COA determined that the bonus lacked a legal basis due to Administrative Order No. 103, which prohibited new or additional benefits for government employees unless explicitly authorized by presidential issuances.
Despite the petitioners arguing that the notice was defective for lacking the signature of a supervising auditor, they filed a Petition for Review befo
Case Digest (G.R. No. 143581)
Facts:
- Background and Authorization
- The Baguio Water District (BWD) authorized the grant of a centennial bonus for its officers and employees by Resolution (BR) No. 046-2009 dated November 20, 2009.
- The centennial bonus, equivalent to fifty percent (50%) of an employee’s salary, was intended to commemorate the 100th anniversary of Baguio City.
- The grant was effected despite existing austerity measures, notably the suspension on new or additional benefits to full-time officials and employees imposed by Administrative Order (AO) No. 103 dated August 31, 2004.
- COA Audit and Notice of Disallowance
- The Commission on Audit (COA) Audit Team, led by Antonieta La Madrid, issued Notice of Disallowance (ND) No. 12-023-101-(09) on May 15, 2012.
- The ND disallowed the total bonus payment amounting to P1,233,860.50, citing its lack of legal basis pursuant to AO 103.
- The ND’s issuance was based on the non-compliance with AO 103, as the bonus was neither a Collective Negotiation Agreement Incentive (CNAI) nor expressly authorized by any presidential issuance.
- Procedural Developments and Administrative Decisions
- Petitioners (former managerial and administrative officers, members of the BWD Board of Directors, and BWD employees as payees) challenged the ND before the COA-Cordillera Administrative Region (COA-CAR).
- COA-CAR, in Decision No. 2015-26 dated May 21, 2015, affirmed the ND despite procedural peculiarity – the absence of the supervising auditor’s signature, which was explained by the lack of assignment of such an auditor at the time.
- In Decision No. 2017-475 dated December 28, 2017 and Resolution dated September 27, 2018, the COA En Banc upheld the ND with modification, clarifying the liability of the parties involved:
- Passive recipients (employees) who received the bonus in good faith were excused from refunding the amount.
- The BWD approving, certifying, and authorizing officers (petitioners) were held jointly and severally liable for the disallowed bonus.
- Nature of the Dispute
- Petitioners argued that:
- The ND was defective for lacking the supervising auditor’s signature.
- BWD, as a government-owned and controlled corporation (GOCC), should not be subjected to the austerity measures of AO 103.
- The bonus had been released in good faith, thereby excusing the need for refund.
- The opposing arguments, supported by the Office of the Solicitor General, maintained the following:
- The ND’s validity despite the missing signature, due to the non-assignment of a supervising auditor at that time.
- That water districts, being GOCCs created under PD 198, are subject to the control of the President and thus bound by AO 103.
- That the disallowance was proper, and petitioners’ negligence in approving the bonus triggered their liability for refund.
Issues:
- Validity of the Notice of Disallowance
- Is ND No. 12-023-101-(09) defective for not bearing the signature of a supervising auditor, in accordance with Section 10.2, Chapter III of the COA Rules and Regulations on Settlement of Accounts (COA-RRSA)?
- Applicability of Presidential Control
- Is the BWD, being a government-owned and controlled corporation established under Presidential Decree (PD) No. 198, subject to the power of control of the Office of the President, thereby necessitating compliance with AO 103?
- Determination of Liability for Refund
- Are petitioners (certifying and approving officers) jointly and severally liable to refund the full disallowed amount?
- Should the passive recipient employees, who received the bonus in good faith, also be required to return the funds received?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)