Case Digest (G.R. No. 230218)
Facts:
Philippine Health Insurance Corporation Regional Office‑CARAGA et al. v. Commission on Audit, G.R. No. 230218, August 14, 2018, Supreme Court En Banc, Tijam, J., writing for the Court.
Petitioner Philhealth CARAGA (Philippine Health Insurance Corporation Regional Office‑CARAGA) challenged the COA En Banc decisions that affirmed notices of disallowance for benefits it granted to officers, employees and contractors totaling P49,874,228.02.
In 2008 Philhealth CARAGA authorized various extra benefits — described in the audits as contractor’s gifts, special events gifts, project‑completion incentives, nominal gifts, and birthday gifts — which were paid to officers, employees and some contractors. In 2009 the Audit Team Leader (ATL) of Philhealth CARAGA issued Notice of Disallowance (ND) Nos. 09‑005‑501‑(09) to 09‑019‑501‑(09), disallowing the payments in the aggregate amount of P49,874,228.02 on the ground that they lacked the required prior review/approval from the Office of the President (OP) through the Department of Budget and Management (DBM), as allegedly required under Section 6 of P.D. No. 1597, Memorandum Order No. 20 (2001) and Administrative Order No. 103 (2004).
Philhealth CARAGA contested the legal basis of the disallowances, invoking its fiscal autonomy under Section 16(n) of R.A. No. 7875 and its alleged exemption from the Office of Compensation and Position Classification (OCPC) rules (R.A. No. 6758). Philhealth CARAGA also urged that the benefits were granted in good faith and, if disallowed, should not be refunded.
The COA Regional Director, R.O. No. XIII, in Decision No. 2011‑007 (February 21, 2011) affirmed the notices of disallowance with modifications — instructing that the disallowance be recomputed net of tax and identifying the legal basis of irregularity as violation of P.D. No. 1597 Sec. 6, M.O. No. 20 and A.O. No. 103. On automatic review, the COA Commission Proper in Decision No. 2014‑250 (September 11, 2014) approved the regional decision and directed recomputation to reflect net-of‑tax amounts. COA denied Philhealth CARAGA’s motion for reconsideration in Resolution No. 2016‑029 (No...(Pro-only)
Issues:
- Did the Commission on Audit commit grave abuse of discretion in upholding the disallowance of the various benefits granted by Philhealth CARAGA?
- Did COA’s ruling unlawfully divest the Philhealth CARAGA Board of Directors of its charter‑granted prerogative to fix compensation and of its fiscal autonomy?
- Did the officers, employees and contractors of Philhealth CARAGA receive the benefits in good faith so that they...(Pro-only)
Ruling:
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Ratio:
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Doctrine:
- (Pro-only)