Case Summary (G.R. No. 245400)

Background of the Case

• Nature of Case: The document discusses a Petition for Certiorari challenging the COA’s decisions regarding Notice of Disallowance No. 12-004-(2011) concerning the salaries of lawyers hired by the Philippine National Construction Corporation (PNCC).
• Petitioners: Janice Day E. Alejandrino and Miriam M. Pasetes, former executive officers of PNCC.
• Respondents: Commission on Audit (COA) and various officials acting in their capacities.

Issues Raised

• Primary Legal Questions:
  • Whether PNCC is a Government-Owned and Controlled Corporation (GOCC) under COA's audit jurisdiction.
  • Whether the COA acted with grave abuse of discretion in disallowing the payment of salaries for the lawyers hired by PNCC.
  • The liability of the petitioners for the disallowed amounts.
  • Whether the salary payments constituted irregular expenses.

Legal Principles

• Definition of GOCC:
  • A corporation where the government owns the majority of the capital or exercises control.
  • Relevant laws include Administrative Order No. 59 and Republic Act No. 10149.

Key Findings

• Nature of PNCC:

  • PNCC is classified as a GOCC. The Court ruled that despite being organized under the Corporation Code, its majority government ownership subjects it to COA's jurisdiction.
  • The Court referenced previous cases to support this determination, emphasizing government ownership as a key factor for COA’s audit jurisdiction.

• Hiring of Lawyers:

  • The COA held that PNCC’s hiring of private lawyers violated COA Circular No. 95-011 and OP-MC No. 9, which require prior approval for such arrangements.
  • The lack of required written consent from the Government Corporate Counsel and COA made the payments irregular.

Liabilities and Penalties

• Personal Liability:
  • The COA held the corporate officers of PNCC liable for the disallowed salaries, but the court found that Alejandrino and Pasetes acted in good faith and were not involved in the decision-making process regarding the hiring of lawyers.
  • As a result, they were ruled not personally liable for the disallowed amounts.

Important Requirements

• Hiring Legal Counsel:
  • GOCCs must secure written conformity from the Government Corporate Counsel and COA before hiring private legal counsel.
  • The process for authorizing expenditures related to legal services must comply with established circulars.

Relevant Timeframes

• COA’s Notice of Disallowance: Issued on August 9, 2012.
• COA Decisions: Initial appeal was denied on August 29, 2014, with the final decision issued on December 13, 2017.

Key Takeaways

• PNCC is classified as a GOCC under COA’s jurisdiction due to majority government ownership.
• The hiring of private lawyers without proper authorization constitutes an irregular expense.
• The petitioners were not held personally liable for the disallowed payments due to their good faith actions, emphasizing the importance of individual role...continue reading

Case Syllabus (G.R. No. 245400)

Background of the Case

• The case involves a Petition for Certiorari filed under Rule 64 of the Revised Rules of Civil Procedure.
• Petitioners Janice Day E. Alejandrino and Miriam M. Pasetes, former executive officers of the Philippine National Construction Corporation (PNCC), challenge the Decision dated December 13, 2017, and Resolution dated September 27, 2018, by the Commission on Audit (COA).
• COA's Decision No. 2017-409 upheld Notice of Disallowance No. 12-004-(2011), which disallowed a total amount of P911,580.96 representing salaries paid to lawyers hired by PNCC without requisite approvals.

Parties Involved

• Petitioners:
  • Janice Day E. Alejandrino: Senior Vice-President/Head, Human Resources and Administration.
  • Miriam M. Pasetes: Vice-President/Acting Treasurer.
• Respondents:
  • Commission on Audit (COA)
  • Leila S. Paras (COA Director CGS-4)
  • Cecilia N. Chan (COA Audit Team Leader)
  • Manuela E. Dela Paz (COA Supervising Auditor)

Facts of the Case

• In 2011, PNCC engaged four private lawyers for legal services, resulting in salary payments.
• COA issued Notice of Disallowance on August 9, 2012, citing the lack of written conformity from the Office of the Government Corporate Counsel (OGCC) and COA's written concurrence as required by COA Circular No....continue reading