Case Summary (G.R. No. 210965)
Applicable Law
The decisions are guided by the 1987 Philippine Constitution, which contains prohibitions against double compensation for public officers and the need for prior approval from the President for certain remuneration.
Factual Background
In G.R. No. 210965, COA issued Audit Observation Memoranda (AOM) regarding additional allowances granted to DBP officers who simultaneously acted as officers of DBP's subsidiaries. COA's Supervising Auditor, Hilconeda P. Abril, held that these allowances constituted double compensation since the officers were already compensated directly by DBP. Subsequently, ND No. SUB-2006-11 (6) was issued, disallowing a total of P1,629,303.34 in additional benefits. DBP sought to overturn this decision, arguing that its Charter exempted it from certain regulations regarding compensation.
Similarly, in G.R. No. 217623, the DBP Board of Directors (BOD) approved increases and additional allowances for employees to combat economic difficulties. However, these also lacked the necessary prior approval from the Office of the President. Auditor Abril issued NDs totaling P106,599,716.93, which DBP also contested.
COA’s Rulings
In both cases, COA upheld the disallowances based on constitutional provisions. It cited Section 8, Article IX (B) of the Constitution, forbidding additional compensation for public officers unless specifically authorized by law. COA dismissed DBP's claim that the allowances were reimbursements rather than additional compensation, finding insufficient documentary support for such assertions.
Court’s Rulings
The Court partially granted DBP's petitions while affirming COA's rulings on the disallowance of additional allowances. It acknowledged that while DBP officers acted in good faith, their actions led to the receipt of disallowed benefits that violated constitutional provisions. Specifically, it reiterated that the constitutional prohibition against double compensation applies, regardless of perceived good faith by DBP officials.
Further, the court rendered a key distinction regarding liability. While the approving and certifying officers would typically be liable for disallowed amounts, the Court stated that, based on Madera v. Commis
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Case Overview
- The case involves the consolidated petitions filed by the Development Bank of the Philippines (DBP) against the Commission on Audit (COA) concerning Notices of Disallowance (NDs) related to allowances and benefits awarded to DBP officers and employees.
- G.R. No. 210965 pertains to COA Decision No. 2012-030 and Resolution dated 06 December 2013, while G.R. No. 217623 involves COA Decision No. 2013-216 and Resolution dated 17 March 2015.
- The crux of the matter revolves around claims of double compensation due to DBP officers receiving benefits from both DBP and its subsidiaries.
Antecedents
G.R. No. 210965
- On 23 April 2007, DBP received Audit Observation Memoranda (AOM) from COA regarding additional allowances granted to DBP officers for their roles in DBP subsidiaries.
- COA's Supervising Auditor, Hilconeda P. Abril, argued that these additional benefits constituted double compensation, as these officers already received similar benefits from DBP.
- Auditor Abril referenced DBM Circular Letter No. 2003-10 and Presidential Decree No. 1597, emphasizing the necessity of Presidential approval for such allowances.
- DBP contended that it was exempt from such regulations under its Charter and asserted that the allowances received should not be classified as double compensation.
- COA subsequently issued ND No. SUB-2006-11 (06) on 29 May 2007, disallowing a total of P1,629,303.34 in additional allowances and benefits.
G.R. No. 217623
- In 1999, the DBP Board of Directors approved a rewards system for its employees, which included economic assista