G.R. No. 237874 - Wycoco vs. Aquino

In December 1998, then‑NFA Administrator Eduardo Nonato Joson requested President Estrada’s approval for granting food assistance and an emergency allowance to all NFA officials and employees.

The approval, rendered by President Estrada, was intended for the Christmas season of that year as a one‑time benefit.
The letter bearing President Estrada’s signature did not indicate an ongoing annual grant.

In November 2003, during President Arroyo’s term, Secretary Ricardo Saludo issued a memorandum addressed to the heads of government financial institutions (GFIs) and government‑owned or controlled corporations (GOCCs).

The memorandum cautioned moderation in granting bonuses and benefits to employees.
It also prompted NFA Administrator Arthur Y. Yap to seek an opinion from the Office of the Government Corporate Counsel (OGCC).

The OGCC Opinion No. 21910, issued on November 24, 2003, affirmed that the memorandum implicitly recognized the authority of heads of GFIs and GOCCs to award Christmas or year‑end bonuses.

On May 18, 2005, the NFA Council approved Resolution No. 226‑2K5 authorizing the annual grant of FGI amounting to Php20,000.00 per employee, disbursed in two tranches.
In 2007, then‑NFA Administrator Jessup P. Navarro issued a memorandum formalizing revised guidelines, allowing the FGI to be released in four tranches.
Despite the long‑standing practice and institutionalization of FGI, the Commission on Audit (COA) later issued several Notices of Disallowance (NDs) for the benefit.

ND No. 11‑003‑GOF(10) was issued against the NFA‑Zamboanga Regional Office in connection with the FGI grant for the calendar year 2010, disallowing Php660,000.00.

ND No. 2014‑01(12) was issued against the NFA‑Agusan Del Norte Provincial Office for the FGI granted for the calendar year 2012, disallowing Php480,000.00.

Petitioners, comprising former and current NFA officials and employees, challenged these disallowances by invoking:

The alleged “presidential imprimatur” stemming from the 1998 letter and the 2003 memorandum as legal basis for an annual FGI.
The traditional and long‑standing practice of granting the benefit.
Equity principles and the doctrine of non‑diminution of benefits.

Petitioners also raised a defense of good faith, arguing that their participation in the approval process should exempt them from returning the disallowed amounts.

The petitions were filed as consolidated petitions for certiorari under Rule 64 in relation to Rule 65 of the Rules of Court.
Multiple appeals and motions for reconsideration were made before the COA Proper, all of which were denied.
The prior decision in Escarez v. Commission on Audit was cited as a conclusive precedent regarding the improper nature of the FGI without proper presidential or DBM authorization.

Whether the COA Proper committed grave abuse of discretion in sustaining the disallowance of the FGI given the alleged “presidential imprimaturs.”
Whether the issuance of the NDs was arbitrary or capricious in light of the longstanding practice and the approvals allegedly present in the 1998 letter and 2003 memorandum.

Whether the annual grant of FGI lacked legal basis by violating statutory provisions including Section 12 of RA 6758, DBM Budget Circular No. 16 (s. 1998), and AO 103.
Whether the petitioners, especially the approving/certifying officers versus mere passive recipients, should be held liable to return the disallowed amounts.
Whether the principle of non‑diminution of benefits or the defense of good faith could exempt petitioners from liability.

Whether the finality of the judgment in Escarez v. Commission on Audit bars re‑litigation of the propriety of the disallowance.
Whether the distinction between issues adjudicated in Escarez and the separate determination of civil liability for the return of disallowed funds is appropriate.