G.R. No. 260458 - Hagedorn vs. Commission on Audit

On June 15, 2010, the Sangguniang Panlungsod of Puerto Princesa City enacted Ordinance No. 438 establishing the Early and Voluntary Separation Incentive Program (EVSIP) for the Puerto Princesa City Government (PPCG).
The ordinance was approved by then City Mayor Edward S. Hagedorn on August 11, 2010.
On June 21, 2010, Resolution No. 850-2010 was enacted to provide Implementing Rules and Regulations (IRR) for Ordinance No. 438; approved on November 2, 2010.
Ordinance No. 438 was aimed to adopt an efficient organizational structure, reward employees’ loyalty and satisfactory service, and encourage retireable employees to avail themselves of early separation.

Section 6 of Ordinance No. 438 detailed incentives based on years of service, ranging from 1.5 to 2.0 times the basic monthly salary multiplied by years of service.
Additional benefits included commutation of unused leave credits and amounts under the City Government’s Salamat Paalam Program, plus benefits from national insurance agencies (GSIS, PAG-IBIG, Phil-Health).
Section 8 of the Ordinance set qualifications: regular employment with at least 10 years of service and certain age requirements.
The program was to be implemented from July 1, 2011 to June 30, 2013 with a budget appropriation of at least PHP 50 million.

On October 3, 2011, Ordinance No. 500 amended Ordinance No. 438, increasing the minimum years of service from 10 to 15 years.
Post audits conducted by the Commission on Audit (COA) in 2013 disallowed payments totaling PHP 89,672,400.74 allegedly made illegally under the EVSIP.
The Notices of Disallowance (NDs) identified officials who approved and employees who received EVSIP benefits as liable parties.

Multiple appeals were filed by PPCG officials and employees including petitioners Abayari, Asuncion, Cantillo, CariAo, Hagedorn, and Ortiz.
The COA Regional Director denied the appeals in Decision No. 2016-09, affirming the disallowances for lack of merit and failure to file the appeals timely for the first batch.
The denial was based on findings that the EVSIP was not enacted pursuant to any reorganization law and is essentially a prohibited supplementary retirement plan under Republic Act No. 4968.

The COA Commission Proper, through Decision No. 2021-247, affirmed the Regional Director’s ruling.
The COA held that the EVSIP amounted to supplemental retirement benefits beyond statutory limits and was ultra vires.
Petitioners filed the instant Petition for Certiorari with Prayer for Temporary Restraining Order (TRO) and/or Writ of Preliminary Injunction asserting good faith and legality of the ordinance.
The Office of the Solicitor General (OSG) filed a Comment opposing the petition for failure to file motion for reconsideration and maintaining the illegality of the EVSIP and respondents' liability.
Petitioners replied, asserting that the issues are pure questions of law and arguing the EVSIP’s compliance with legal requirements and disputing the prohibition under RA 4968.

Whether the failure to file a motion for reconsideration from the COA’s Decision renders the petition dismissible.
Whether Ordinance No. 438, Resolution No. 850-A2010, and Ordinance No. 500, as well as the payments under EVSIP are valid.
Whether petitioners are liable for the amounts paid to EVSIP beneficiaries if the ordinances and payments are invalid.
Whether petitioners are entitled to a Temporary Restraining Order or injunction.