G.R. No. 256285 - Miguel Rene A. Dominguez vs. Commission on Audit, Michael G. Aguinaldo in his capacity as Chairperson

In 2009, while serving as the Governor of Sarangani, petitioner Miguel Rene A. Dominguez approved the Sarangani Province Local Government Security Plan.
The Security Plan was conceived in response to a series of security incidents in previous years, which highlighted the need to strengthen intelligence operations in the province.
The plan covered various activities such as the organization and training of deputized barangay tanods or civilian volunteer organizations, the inventory and registration of unlicensed firearms, and capability building on conflict transformation for ACT for Peace-assisted Peace and Development Communities.

The Security Plan was submitted to the Department of the Interior and Local Government (DILG) along with the necessary financial plans and requests for appropriation.
Because expenditures for intelligence and confidential activities exceeded the normal budget allocation under DILG Memorandum Circular No. 99-65, the provincial government sought exemption from the budget limitations.
Exemption requests for 2009 and 2010 were granted by the DILG Secretary through letters dated February 18, 2009, and March 9, 2010, respectively.
Subsequent expenditures for 2011 and 2012 were similarly funded for the same purposes, with corresponding requests for exemption allegedly submitted to the DILG.

Throughout 2009 to 2011, the COA-ICFAU issued credit advises confirming the use of intelligence and confidential funds via cash advances for the approved years.
On May 22–23, 2013, COA-ICFAU issued Audit Observation Memoranda (AOM No. 2013-05-6337 and AOM No. 2013-05-6339) noting that certain expense items in the Accomplishment Reports for 2011 and 2012 were not aligned with the designated intelligence and confidential activities but rather pertained to peace and order initiatives.
The COA-ICFAU requested the petitioner to justify the use of these funds against intelligence and confidential activities rather than charging them to the Peace and Order Program Fund.

Organization/Federation Training and Benefits for Deputized Barangay Tanods or CVOs (P1,500,000.00)
Inventory of Unlicensed Firearms (P300,000.00)
Registration of Unlicensed Firearms (P300,000.00)
Other Measures such as Capability Building on Conflict Transformation (P1,200,000.00)

Notice ND-2013-09-007 disallowed P1,380,000.00 for 2012 disbursements covering similar categories in proportionate amounts.

Both Notices stated that the activities, being essentially peace and order undertakings, should have been charged to the corresponding Peace and Order Program Fund rather than to intelligence and confidential funds.

The activities carried out were in line with the intentions of item II.3 of MC No. 99-65, which he argued contained descriptive rather than restrictive language.
The funds were used in support of intelligence operations under Executive Order No. 739 on counter-insurgency, and in absence of appropriated funds for these activities, it was necessary to use the designated intelligence funds.
The limitations in MC No. 99-65 should be interpreted using the rule on ejusdem generis, emphasizing the purpose and result of the disbursements rather than merely their nomenclature.
Reliance on previous approvals for 2009 and 2010 justified the continuation of the similar activities in 2011 and 2012.
There was a claim that the COA’s decision violated the constitutional principle of local autonomy by interfering with the local government's discretionary budgeting.

The COA, supported by the Office of the Solicitor General’s counter-arguments, maintained that the expenditures were irregular since they did not conform to the explicit limitations of MC No. 99-65.
Petitioner’s subsequent motion for reconsideration in 2017 was denied, with COA asserting that the petitioner's actions demonstrated knowledge of the fund limitations and constituted gross negligence.

Whether the Commission on Audit (COA) gravely abused its discretion in affirming the disallowances against the petitioner’s use of intelligence and confidential funds.

Did the COA properly apply the budgetary limitations as set out in item II.3 of DILG Memorandum Circular No. 99-65?
Was the petitioner’s argument, based on previous approvals and the doctrine of operative fact, sufficient to validate the expenditures?

Whether the use of funds for activities related to peace and order, rather than strictly for intelligence and confidential operations, falls within the ambit of MC No. 99-65.

Are the disbursed amounts for training, registration/inventory of firearms, and conflict transformation support justifiable under the enumerated prohibitions?
Does the principle of ejusdem generis apply to expand the scope of allowable items under item II.3 of MC No. 99-65?

Whether the petitioner’s actions, including permitting cash advances without the requisite DILG approval for 2011 and 2012, constitute gross negligence and a violation of applicable administrative guidelines.

Can the petitioner be held solidarily liable for the disallowed amounts given his acknowledgment of the fund limitations?
Does the reliance on credit advises from previous years excuse the failure to secure proper approvals for subsequent expenditures?

Whether the ruling of the COA infringes upon the constitutional principle of local autonomy by overriding the local government's discretion in budgetary execution.