Case Summary (G.R. No. 262193)
Background
On March 7, 2005, DBP issued Circular No. 10, facilitating the calculation of MVLC based on "gross monthly cash compensation," a definition encompassing various allowances beyond basic salary. Following this, COA issued several Notices of Disallowance (NDs) on February 28, 2007, disallowing the payment of MVLC, asserting it should be based strictly on basic pay. DBP's attempts at reconsideration were rejected by COA, leading to a prolonged appeal process, which included submissions to the COA's Cluster Director and references to presidential approval of DBP’s compensation plan.
COA's Findings and DBP's Appeals
COA’s Decision No. 2018-197, issued on January 30, 2018, partially granted DBP’s appeal but required the Board of Directors and approving officials to be responsible for the disallowed amounts, reasoning that passive recipients of the MVLC would not need to refund amounts disbursed in good faith. However, a subsequent decision on January 24, 2022, reaffirmed that all recipients would have to refund disallowed amounts, prompting DBP to escalate the matter to the Supreme Court.
Supreme Court's Initial Ruling
In its assailed decision following DBP's appeal, the Supreme Court upheld several points: it found no violation of due process in the proceedings against DBP; confirmed a breach of DBP's right to speedy disposition of cases due to an unjustifiable 11-year delay from the appeal to resolution; established that DBP Circular No. 10 was incompatible with existing regulations; ruled that the Board’s authority is not unqualified, and the presidential approval of the compensation plan was ineffectual as it was improperly granted within the prohibited period preceding elections. Consequently, it absolved DBP and its employees from liability regarding the disallowed amounts.
Motion for Partial Reconsideration
DBP subsequently filed a Motion for Partial Reconsideration, arguing that the findings of the delay being a violation of its constitutional rights warranted a complete annulment of the NDs, rather than modification. DBP contended that the COA lacked the jurisdiction to evaluate the validity of the presidential approval post facto since such matters fell under COMELEC's purview.
Court's Ruling on Motion for Reconsideration
The Supreme Court granted the Motion for Partial Reconsideration. It cited precedents (Navarro v. COA and Rosario v. COA) where delays led to the dismissal of similar cases, upholding the principle that inordinate delay may absolve parties from liability. The COA failed to justify the 11-year delay, violating the constitutional right to a speedy disposition as enshrined in Section 16, Article III of the Constitution, which guarantees expeditious resolution of cases.
Justification of Delay
The Court examined COA's claims regarding delays due to organizational amendments and found them unconvincing as the purported delays were extensive and lacked adequate justification. The delays had caused significant prejudice to DBP and its employees, many of whom had retired or were in a lingering state of uncertai
...continue readingCase Syllabus (G.R. No. 262193)
Background and Antecedents
- The case arises from the dispute between the Development Bank of the Philippines (DBP) and the Commission on Audit (COA) regarding the disallowance of the money value of leave credits (MVLC) payments to DBP officials and employees.
- On March 7, 2005, DBP issued Circular No. 10 authorizing the computation of MVLC based on "gross monthly cash compensation," including various allowances and benefits beyond basic pay.
- COA, through Notices of Disallowance (NDs) dated February 28, 2007, disallowed these payments, holding MVLC should be computed on basic pay only.
- DBP sought reconsideration which was denied; appealed to COA’s Cluster Director and filed a Memorandum of Appeal.
- DBP notified COA that then-President Gloria Macapagal-Arroyo (PGMA) had approved its Compensation Plan, which allegedly included Circular No. 10.
- COA Commission Proper (CP) partially granted DBP’s appeal but held that liability for disallowed amounts falls on DBP Board of Directors (BOD) and officials approving the payments, rejecting PGMA's post facto approval due to election rules.
- DBP’s motion for reconsideration was denied; COA CP required even passive recipients of the disallowed MVLC to refund the payments.
Issues Presented
- Whether COA Decisions No. 2018-197 (January 30, 2018) and No. 2022-072 (January 24, 2022) should be set aside due to violation of DBP’s right to a speedy disposition of cases.
- Whether COA committed grave abuse of discretion in ruling on the validity of PGMA’s post facto approval of DBP’s Compensation Plan.
Court’s Findings on Due Process and Speedy Disposition Rights
- DBP was not denied due process, as it was able to present its defense throughout the proceedings.
- COA violated DBP officials’ and employees’ constitutional right to speedy disposition due to an unjustified 11-year delay in resolving DBP's appeal and motion for reconsideration.
- The delay extended far beyond the 60-day mandate for COA to decide cases after submission, violating Section 16, Article III of the Constitution.
- COA failed to justify the delay, unsuccessfully citing procedural amendments and organizational adjustments that were completed prior to the delay.
- DBP had timely asserted its right to speedy disposition.
- The delay prejudiced DBP and concerned officials and employees, causing prolonged uncertainty and financial concern.