Case Digest (G.R. No. 252198)
Facts:
Securities and Exchange Commission v. Commission on Audit, G.R. No. 252198, April 27, 2021, Supreme Court En Banc, Lazaro‑Javier, J., writing for the Court.Petitioner Securities and Exchange Commission (SEC) established a provident fund for its officials and employees by Resolution No. 31 (2002) and subsequent SEC En Banc resolutions (notably SEC‑EXS Resolutions Nos. 144, 2003 and 137, 2004). The SRC (Republic Act No. 8799), particularly Section 75, authorized the SEC to retain and utilize up to P100,000,000.00 from its income, “subject to the auditing requirements, standards and procedures under existing laws.” A DBM letter dated August 19, 2004 advised that retained income was “off‑budget” and its utilization was left to SEC’s discretion, subject to usual accounting and auditing rules.
For Calendar Year 2010 the SEC allocated from retained income amounts totaling P19,723,444.66 as the Commission’s counterpart contributions to the provident fund; the rollo reproduces the individual checks and dates covering months throughout 2010. Thereafter, COA issued Notice of Disallowance No. 11‑003‑101‑(10) dated December 10, 2011 disallowing the P19,723,444.66 on the ground that Special Provision No. 1 of the General Appropriations Act for FY 2010 (GAA 2010) limited the use of SEC’s retained income to augmenting Maintenance and Other Operating Expenses (MOOE) and Capital Outlay (CO), and that contributions to a provident fund constitute Personal Services and thus were outside that authorization; COA also cited PD 1177 and requirements for presidential approval of certain compensation items under the Administrative Code and related instruments. COA directed named SEC approving, certifying, and authorizing officers to settle the disallowed amount.
On administrative appeal, COA‑National Government Sector (NGS) Cluster 2 issued Decision No. 2013‑004 (Apr. 1, 2013) which affirmed the disallowance but absolved the approving officers and employees from refunding in view of their honest belief. On automatic review the COA En Banc issued Decision No. 2018‑010 (Jan. 17, 2018), which affirmed with modification the Cluster 2 decision: it affirmed the disallowance, held the approving/certifying/authorizing SEC officers solidarily liable to return the entire amount, but excused the SEC employees from refund. The SEC’s motion for reconsideration was denied by COA Resolution No. 2020‑180 (Jan. 29, 2020).
Petitioner SEC filed this petition for certiorari under Rule 64 of the Rules of Court (referred to in the rollo as Rule 64), alleging grave abuse of discretion by COA in disallowing the disbursement on the theory that retained income is an “off‑budget” fund under Section 75 of the SRC and thus may be used at SEC’s discretion. The Office o...(Subscriber-Only)
Issues:
- Did COA Decision No. 2018‑010 validly disallow the SEC’s allocation and payment of P19,723,444.66 to its provident fund?
- Are the approving, certifying, and authorizing officers of the SEC liable to refund the disal...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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