Case Summary (G.R. No. 253127)
Case Background
The controversy arose when the COA auditors issued several Notices of Disallowance (NDs) in 2013 for the payment of benefits under the EVSIP, totaling PHP 89,672,400.74. The petitioners sought administrative relief from the NDs but subsequently escalated their petition to the Supreme Court without exhausting administrative remedies by not filing a motion for reconsideration with COA.
Court's Decision Dated November 29, 2022
In the Court's decision, it ruled that the petition presented no merit, denying the Petition for Certiorari. The Court upheld the findings of the COA, declaring both Ordinance No. 438 and Resolution No. 850-2010 as null and void because they were ultra vires and conflicted with Commonwealth Act No. 186, as amended by Republic Act No. 4968. The Court held that the nature of the EVSIP amounted to an unauthorized early retirement plan, lacking any legal basis since there was no existing law permitting local government units to offer independent incentive packages outside national statutes.
Application of the Operative Fact Doctrine
The Court recognized the relevance of the operative fact doctrine, allowing for the determination that while the NDs were valid, the question of good faith from the petitioners would be addressed subsequently by the Office of the Ombudsman. The Court stressed the need for greater collaboration between the COA and the Department of Budget and Management (DBM) to prevent local ordinances from contravening national laws.
Motion for Reconsideration Arguments
The petitioners sought a reconsideration of the Court's initial ruling on several grounds. They contended that the NDs constituted collateral attacks on the ordinances and questioned the legal authority of COA to declare the ordinances null and void without judicial intervention. They additionally cited reliance on the presumption of good faith, asserting that the EVSIP was a temporary program meant for reorganization rather than a supplementary plan.
COA's Response to the Motion
In response, the COA argued that its decision was grounded in the law's evidence, maintaining it did not overstep its authority or engage in a collateral attack on the ordinances. They clarified the legality of their disallowance and reiterated the inapplicability of the City of General Santos precedent to their case.
Issues for Resolution
The issues for the Court's consideration included whether the COA's NDs were indeed collateral attacks, whether the EVSIP constituted a supplementary early retirement plan under the law, and the determination of the petitioners’ good faith concerning the enactment and implementation of the EVSIP.
Court's Ruling on Motion for Reconsideration
The Court partly granted the Motion for Reconsideration. On the first issue, it established that the characterizations made by COA did
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Background and Procedural History
- The case arises from the establishment of the Early & Voluntary Separation Incentive Program (EVSIP) by the Puerto Princesa City Government (PPCG) in 2010 via Ordinance No. 438 and Resolution No. 850-2010.
- The Commission on Audit's (COA) auditors issued Notices of Disallowance (NDs) in 2013 against payments under EVSIP amounting to PHP 89,672,400.74.
- Respondents Bayron et al., identified in the NDs, challenged the disallowances through administrative appeals which were ultimately denied by the COA En Banc.
- The case records were forwarded to the Office of the Ombudsman for investigation after affirmance of the NDs.
- Bayron et al. thereafter filed a Petition for Certiorari before the Supreme Court questioning COA's disallowance and the nullity of Ordinance No. 438 and Resolution No. 850-2010.
Supreme Court Decision (November 29, 2022)
- The Petition for Certiorari was denied for lack of merit.
- Ordinance No. 438 and Resolution No. 850-2010 were declared null and void for being ultra vires and contrary to Section 28(b) of Commonwealth Act No. 186, as amended by Republic Act No. 4968.
- COA's Decision No. 2020-100 was affirmed.
- The Court recognized that questions of fact regarding good faith claims are properly cognizable before the Office of the Ombudsman.
- The Court noted the absence of any exception or enabling law for local government units (LGUs) to establish parallel or supplementary retirement or incentive plans.
- Guidance was issued to facilitate closer coordination between COA and the Department of Budget & Management for monitoring local appropriations relative to national laws.
Petitioners' Arguments in Motion for Reconsideration
- Petitioners argued COA’s NDs constituted collateral attacks on valid local legislation, thus amounting to grave abuse of discretion.
- They contended the EVSIP was a temporary, one-time adjunct tied to PPCG’s reorganization plans, not a supplementary retirement plan.
- Petitioners asserted the presumption of good faith, highlighting delayed DBM notices and initial COA comments supporting their claim.
- Attached copies of DBM letters showing various positions and approvals related to PPCG’s annual appropriations, with evolving recognition of the EVSIP.
Respondent Commission on Audit’s Comment
- COA maintained that its disallowance was within mandate, not a collateral attack but enforcement of audit power to disallow illegal expenditures.
- Reit