G.R. No. 182069 - Vicencio vs. Villar

The case involves a Petition for Certiorari under Rule 64 in relation to Rule 65 of the Rules of Court, seeking to annul Decision No. 2008-022 of the Commission on Audit (COA).
The petitioner, Arnold D. Vicencio, had served as City Vice-Mayor of Malabon and was subsequently involved in hiring consultancy services for the Sangguniang Panglungsod (City Council) through contracts entered into by the city government.

On October 30, 2003, the City Council of Malabon, presided over by then-acting Vice-Mayor Benjamin Galauran, adopted City Ordinance No. 15-2003.

The ordinance granted authority to then Vice-Mayor Jay Jay Yambao to negotiate and enter into a contract for consultancy services for the Sanggunian Secretariat.
It specifically limited the authority to engage consultants in the areas of legal, education, and management affairs for the period covering June to December 2003.

Following the ordinance, on December 9, 2003, and March 1, 2004, the city entered into separate Contracts for Consultancy Services with various consultants.

During the May 2004 elections, petitioner Vicencio was elected City Vice-Mayor, thereby assuming the role of the Presiding Officer of the Sangguniang Panglungsod as well as head of the Sanggunian Secretariat.
To meet the manpower requirements and upgrade the performance of the Secretariat, petitioner initiated efforts to hire new consultants for the year 2005.

On July 19, 2004, petitioner wrote to Atty. Danilo T. Diaz, City Legal Officer, inquiring whether the SPM needed to ratify a new consultancy contract under the existing ordinance.
Atty. Diaz responded on July 26, 2004, stating that no ratification was necessary provided the services contracted were exactly those stipulated by Ordinance No. 15-2003.

The City Council then adopted City Ordinance No. 01-2005 on January 21, 2005, appropriating funds for various city expenditures, including an allocation for consultancy services under the Legislative Secretariat.
On February 1 and 11, 2005, the city government, represented by petitioner, executed multiple Consultancy Contracts with different consultants for services rendered during 2005.

On December 19, 2005, an Audit Observation Memorandum (AOM) was issued by the City Auditor’s Office, disallowing a disbursement amounting to ₱384,980.

The audit findings revealed that Ordinance No. 15-2003 was misapplied because it only authorized contracts for the period June to December 2003 and did not provide authority to enter into contracts for 2005.
Additional deficiencies noted included the absence of Progress Accomplishment Reports and a lack of transparency regarding the hiring process by the Bids and Awards Committee (BAC).

Subsequent to the AOM, on May 12, 2006, a Notice of Disallowance (ND) was issued by respondent Elizabeth S. Zosa, further clarifying that the disallowed amount pertained to unauthorized consultancy services.
The persons held liable for the disallowed amount included:

Petitioner himself, in his capacity as City Vice-Mayor, who certified the transactions.
The City Accountant, and the consultants who were the payees.

The implicated parties were directed to settle the disallowed funds, with a six-month period provided for filing an appeal under P.D. 1445.

The petitioner appealed the Notice of Disallowance to the COA’s Adjudication and Settlement Board (ASB).

On June 12, 2007, the ASB partially denied the appeal by affirming the disallowance for the consultants’ fees, while granting relief to the City Accountant.

Petitioner then filed a letter on July 7, 2007, seeking reversal of the ASB decision, which was later denied by the COA on February 15, 2008, when the letter was treated as an appeal.
The instant Petition, filed on March 28, 2008, raised the issue of alleged grave abuse of discretion and errors by the COA in affirming the disallowance of the consultancy disbursements.
Respondents contended that the original ordinance expressly limited the authority for hiring consultants to a specific period and specific individual (Vice-Mayor Yambao) and that the subsequent 2005 contracts were unauthorized.
Petitioner countered that the ordinance was ambiguous and argued that it implicitly authorized the Office of the Vice-Mayor to continue entering into consultancy contracts, citing the good faith reliance on a letter by the City Legal Officer and the dismissal of previous administrative and criminal complaints by the Ombudsman.

Whether the COA committed grave abuse of discretion and exceeded its jurisdiction in affirming the disallowance of ₱384,980 relating to the hiring of consultants for the Sangguniang Panlungsod.
Whether Ordinance No. 15-2003, which expressly authorized then Vice-Mayor Yambao to enter into consultancy contracts only for the period June to December 2003, could be interpreted to authorize petitioner, as the incumbent Vice-Mayor, to enter into similar contracts in 2005.
Whether the petitioner’s reliance on the opinion of the City Legal Officer and the assertion of ambiguity in the ordinance removed his personal liability under P.D. 1445 for entering into contracts without proper authority.
Whether or not the procedural defect concerning the verification of the Petition (being based on mere knowledge and belief) mandated its dismissal irrespective of the merits of the case.