G.R. No. 210788 - Galindo vs. Commission on Audit

Case Summary (G.R. No. 210788)

Factual Background: The MWSS Cash Advances and the COA-MWSS Personnel

The record began with a letter dated 2 June 2008 from then MWSS Administrator Diosdado Jose M. Allado to then COA Chairman Reynaldo A. Villar (Chairman Villar). The letter complained of unrecorded checks relating to Mendoza’s cash advances, which were allegedly used to pay bonuses and other benefits to persons assigned at the COA Auditing Unit of MWSS. The letter contrasted earlier periods with the alleged later practice and claimed that the benefits were not supported by payrolls, with vouchers and checks reportedly processed simultaneously without passing through the usual procedure, and with the vouchers not forwarded to the Accounting Section for book take-up.

Chairman Villar then issued Office Order No. 2009-528 on 21 July 2009, constituting a team from COA’s Fraud Audit and Investigation Office - Legal Services Sector (FAIO-LSS) for a fact-finding investigation. The team’s Investigation Report was dated 24 June 2010. COA later summarized that, in 2005 and 2006, COA-MWSS personnel received cash amounting to P9,182,038.00, and in 2007, P38,551,133.40, from cash advances drawn by Mendoza for payments of allowances and bonuses. COA further reported that in previous years (1999 to 2003), COA-MWSS personnel also received bonuses and other benefits totaling P1,171,855.00, and that COA personnel had availed of the Car Assistance Plan (CAP) of the MWSS Employees Welfare Fund (MEWF), resulting in alleged fringe benefits for the COA personnel involved.

Initiation of Charges and the Alleged Scheme

On 30 July 2010, Chairman Villar issued Letter Charges for Grave Misconduct and Violation of Reasonable Office Rules and Regulations to petitioners Galindo and Pinto, together with other COA-MWSS personnel. The prosecution’s theory was that the receipt and/or collection by COA-MWSS personnel of bonuses and other benefits from MWSS, allegedly from November 2005 to December 2007, was facilitated through Mendoza’s cash advances drawn specifically for that purpose and supported by Office Orders signed by the concerned MWSS Administrator.

The prosecution also alleged the existence of an arrangement, involving the period of performance of a MWSS Supervising Auditor and MWSS Board Resolutions, in which COA-MWSS personnel were allegedly not identified in the payroll as claimants. It was further alleged that the liquidation and recording of cash advances were handled by COA-MWSS personnel. The prosecution relied on explanations offered by MWSS finance officials and Mendoza, including how procedures reportedly operated in earlier periods and how they allegedly shifted when certain individuals began to directly approach Mendoza armed with pre-signed office orders and approved disbursement vouchers.

The 1999 to 2003 Allegation Based on Indices of Payments

The prosecution also presented a pattern intended to show that similar benefits were allegedly received as early as 1999. COA relied on Indices of Payments covering 1999 to 2003 obtained from MWSS records, stating that COA-MWSS personnel received bonuses and other benefits authorized under specific resolutions passed by the MWSS Board of Trustees. On this basis, COA later ordered Pinto to refund an amount corresponding to what it considered to be benefits received during those years.

The Car Assistance Plan (CAP) under MEWF and the Alleged Fringe Benefit

On the CAP-MEWF, COA anchored the narrative on MWSS Board Resolution No. 2006-267 dated 7 December 2006, which extended financial assistance or seed money to the MEWF, in total P30M, supposedly derived from gains of MWSS from a bidding-out of subscription shares in MWSI. COA characterized the seed money as a loan, but noted that only 40% was supposed to be paid by MEWF to the CO or RO, while the remaining 60% was treated as a grant of fringe benefits to MEWF members.

COA further stated that, under the Implementing Guidelines (IG) of the CAP-MEWF, eligible members could avail of maximum loan amounts varying by salary grade and plan, and that only 40% was paid by the availees in equal monthly amortization over a maximum of four years. Petitioners, together with other COA-MWSS personnel, were said to have shown membership through official receipts and submitted application forms supported by certifications of monthly payroll signed by Atty. Cabibihan, which COA considered anomalous. The prosecution also noted accounting entries in disbursement documents reflecting how the loan and service fee were recorded.

Petitioners’ Defenses Before COA

In their answers, petitioners argued, in general terms, that the documentary evidence formally offered did not directly prove the alleged infractions or were irrelevant. They also challenged the quantum of evidence necessary for administrative liability.

On the CAP-MEWF, petitioners interposed an affirmative defense. They admitted availing of the plan but justified their acts as lawful consequences of membership in the MEWF and asserted that the MEWF fund was a private fund, so their benefits did not prejudice the government. They also claimed that the CAP-MEWF was established under lawful authority, particularly MWSS Board Resolution No. 2006-267 and the IG issued pursuant thereto, and that the issuances had not been declared without legal basis.

COA’s Findings on Administrative Liability

COA held that the allegations against petitioners were supported by substantial evidence and found them guilty of Grave Misconduct and Violation of Reasonable Office Rules and Regulations. COA found that petitioners received unauthorized allowances from Mendoza’s cash advances and availed of the CAP-MEWF.

For Pinto, COA found acknowledgment of receipt of allowances in amounts of P385,000.00 on 15 November 2005, P428,745.00 on 13 December 2005 (jointly with State Auditor II Vilma Tiongson), and P428,745.00 on 2 January 2006. For Galindo, COA found receipt of P428,745.00 as allowance on 16 December 2005. COA further found Pinto liable for bonuses and other benefits allegedly received from the MWSS for 1999 to 2003, and it ordered Pinto to refund P85,526.00 based on the Indices of Payments.

COA imposed the refund requirement for the CAP-MEWF as well. COA reasoned that the funds managed by MEWF remained public funds and that the car loan contracts were between MWSS and the availees. It treated MEWF’s payment of 60% of the vehicle purchase price as a grant of fringe benefits. COA relied on the policy prohibition in COA Memorandum No. 89-584 dated 9 January 1989, stated as a matter of state policy under Section 18, Republic Act No. 6758 (R.A. No. 6758), and implemented under COA Memorandum No. 99-066 dated 22 September 1999.

COA’s Definition of Grave Misconduct and Dishonesty

COA explained that administrative misconduct becomes grave when it involves elements such as corruption, willful intent to violate the law, or disregard of established rules, which must be proved by substantial evidence. It defined corruption in the context of grave misconduct as an act of a public officer who unlawfully uses his or her position to procure benefits contrary to duty and the rights of others.

COA also treated dishonesty as involving concealment or distortion of truth relevant to duty, implying a disposition to lie, cheat, deceive, or defraud. COA found that petitioners’ conduct warranted the finding of grave misconduct. It imposed suspension for one year without pay and required refunds of the disallowed amounts derived from Mendoza’s cash advances for 2005 to 2007, with Pinto also being ordered to refund amounts for 1999 to 2003 and both petitioners being ordered to refund the MEWF’s payments for their car loans.

Motion for Reconsideration and Filing of the Petition

After COA promulgated Decision No. 2013-001 on 29 January 2013, petitioners filed a motion for reconsideration. COA denied it in a Resolution dated 2 October 2013. Petitioners’ counsel received the resolution on 8 October 2013. Their counsel withdrew appearance on 21 October 2013.

Petitioners then filed, through new counsel, the present petition on 30 January 2014.

Issues Raised by Petitioners

Petitioners assigned errors centered on three principal matters. First, they challenged COA’s ruling that the 60% paid by MEWF constituted fringe benefits prohibited under COA Memorandum No. 89-584 and Section 18, R.A. No. 6758.

Second, they challenged the sufficiency and admissibility of the prosecution’s evidence and argued that COA erred in using circumstances surrounding Mendoza’s cash advances as evidence, particularly where many documents were private documents, and they invoked jurisprudential principles on admissibility and proof.

Third, they contested COA’s conclusion that they received bonuses and other benefits from the cash advances of Mendoza for 2005 to 2007, and they attacked the reliance on such circumstances and documents as establishing receipt.

The Court’s Disposition: Dismissal of the Petition

The Court dismissed the petition. It held that in COA disciplinary cases, the proper remedy against an adverse COA decision was an appeal to the Civil Service Commission, not a petition for certiorari before the Court under Rule 64. The Court stressed that Rule 64 governs review of judgments and final orders or resolutions of COA and COMELEC, but it refers to Rule 65 for the mode of review, which requires proof that the tribunal acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and that there is no appeal or plain, speedy, and adequate remedy.

The Court further pointed to Section 7, Article IX-A of the Constitution, which allows decisions of constitutional commissions to be brought to the Supreme Court on certiorari within thirty days, but it emphasized that petitioners did not explain why they filed certiorari instead of appeal before the Civil Service Commission. The Court also held that a pe

Case Syllabus (G.R. No. 210788)

Parties and Procedural Posture

Petitioners Annaliza J. Galindo and Evelinda P. Pinto assailed Decision No. 2013-001 of the Commission on Audit (COA) in administrative cases Adm. Case No. 2010-036 and Adm. Case No. 2010-039, respectively.
The COA decision found petitioners administratively liable and imposed suspension for one year without pay, with orders to refund amounts received from cash advances and from the MWSS Employees Welfare Fund (MEWF) car loan program.
Petitioners moved for reconsideration, which the COA denied in a resolution dated 2 October 2013.
Petitioners received notice of the resolution on 8 October 2013.
Petitioners’ counsel withdrew services on 21 October 2013.
Petitioners filed the present petition on 30 January 2014, invoking Rule 64 and, by implication, review under Rule 65 as discussed in the decision.
The Court dismissed the petition, holding that the proper remedy in COA administrative disciplinary cases was appeal to the Civil Service Commission, not certiorari.

Key Factual Allegations

The controversy stemmed from a 2 June 2008 letter of MWSS Administrator Diosdado Jose M. Allado to COA Chairman Reynaldo A. Villar, relating to unrecorded checks tied to cash advances of MWSS Supervising Cashier Iris C. Mendoza.
The letter alleged that cash advances intended for COA personnel were supported at first by payrolls, but later involved bonus and benefit payments supported by signed office orders and processed in a manner that allegedly bypassed usual procedures.
The letter further alleged that vouchers and checks were processed simultaneously, that vouchers were not forwarded to the Accounting Section for book take-up, and that unrecorded checks began to accumulate.
Chairman Villar issued Office Order No. 2009-528 dated 21 July 2009, constituting a team from the COA Fraud Audit and Investigation Office – Legal Services Sector (FAIO-LSS) for a fact-finding investigation.
The investigation report summarized that COA-MWSS personnel received large amounts from Mendoza’s cash advances in 2005 to 2007, and that bonuses and other benefits were also allegedly received in 1999 to 2003.
The prosecution alleged that COA-MWSS personnel received bonuses and other benefits during November 2005 to December 2007 through cash advances (CAs) drawn by Mendoza for that purpose, supported by office orders signed by MWSS administrators.
The prosecution also alleged a practice whereby COA personnel were allegedly not identified in the payroll as claimants and that the liquidation and recording of cash advances were handled by COA-MWSS personnel.
For the car assistance plan under CAP-MEWF, the prosecution presented that some COA-MWSS personnel availed of the plan, paying only 40% of the purchase price via MEWF loan while MEWF paid the 60% balance as a fringe benefit.
The prosecution relied on indices of payments for 1999 to 2003, and on acknowledgment receipts (ARs) and cash advances connected to Mendoza for later periods.
Petitioners denied or disputed key factual allegations, including the alleged receipt of specified allowance amounts and the credibility and probative value of indices of payments.
Petitioners’ affirmative defense to the CAP-MEWF charge was that the arrangement was a lawful consequence of membership in the MEWF, and that the funds managed by MEWF were treated as a private fund, so that they supposedly did not prejudice the government.

COA Findings and Rulings

The COA concluded that petitioners’ receipt and/or collection of bonuses, allowances, and fringe benefits was supported by substantial evidence.
The COA determined that petitioners received unauthorized allowances from Mendoza’s cash advances and availed of the CAP-MEWF.
The COA found Pinto accountable for receipt of specific allowance amounts for 2005 to 2007, and also found Pinto liable for alleged bonuses and benefits for 1999 to 2003 based on the indices of payments.
The COA found Galindo accountable for receipt of at least one allowance amount for 2005 to 2007 as stated in the COA decision.
The COA imposed suspension for one year without pay on both Galindo and Pinto for Grave Misconduct and Violation of Reasonable Office Rules and Regulations.
The COA ordered both petitioners to refund amounts each received from Mendoza’s cash advances for CYs 2005 to 2007.
The COA ordered Pinto to refund P85,526.00 for 1999 to 2003 based on the indices of payments.
The COA also ordered the refund of the amounts paid by MEWF for petitioners’ car loans, stating that Galindo received P358,004.03 and Pinto received P300,000.00 as fringe benefit through CAP-MEWF.
The COA treated the acknowledgment receipts as admissible, reasoning that they were prepared by Mendoza and authenticated during the hearing.
The COA held that certified photocopies of the indices of payments were public documents not requiring proof of due execution and genuineness for admissibility.
The COA rejected petitioners’ defense that the car assistance benefits were lawful and not prohibited, and it ruled that MEWF funds remained public funds and that the relevant car loan contracts were between MWSS and the availees.
The COA relied on the prohibition against granting fringe benefits to COA personnel assigned to national, local, and corporate sectors, referencing COA Memorandum No. 89-584 dated 9 January 1989, Section 18, Republic Act No. 6758, and COA Memorandum No. 99-066 dated 22 September 1999.
The COA reasoned that petitioners’ receipt of bonuses and fringe benefits constituted misconduct, and it cited standards defining grave misconduct and dishonesty as forms of unfaithfulness or wrongdoing in public office.
The COA concluded that petitioners acted in a manner that amounted to grave misconduct and violation of reasonable office rules.

Statutory and Procedural Framework

The Court treated the petition as a challenge to a COA administrative disciplinary decision imposing a penalty.
The Court explained that Rule 64 governs review of judgments and final orders or resolutions of COA and the Commission on Elections, but that Rule 65 sets the mode of review for COA and COMELEC rulings.