Case Summary (G.R. No. 185001)
Procedural Background
The petition for certiorari filed under Rule 64 in relation to Rule 65 challenges COA's Decision No. 2005-071 dated December 29, 2005, which affirmed a prior disallowance of a 5% salary increase amounting to P895,891.50 for local government personnel. Petitioners were required to refund this amount based on the argument that their actions exceeded the limitations set under the Local Government Code.
Relevant Legislative Framework
The core laws involved include Republic Act No. 7160, known as the Local Government Code of 1991, and various Local Budget Circulars issued by the Department of Budget and Management (DBM), particularly LBC No. 74, which permitted a 5% salary adjustment, and LBC No. 75, issued later, which provided guidelines on personal service limitations.
Municipal Budget and Salary Increase
On June 15, 2001, DBM authorized a 5% salary increase effective July 1, 2001, leading to the enactment of various resolutions by the Sangguniang Bayan of Mayoyao to implement this increase. However, subsequent actions taken and resolutions passed were scrutinized by the Sangguniang Panlalawigan, which positioned the increase within the context of budgetary constraints and compliance with civil service regulations.
COA's Rationale for Disallowance
The COA determined that the municipality had exceeded its personal service expenditure limits as prescribed in Section 325(a) of the Local Government Code. Specifically, findings by the Provincial Budget Officer indicated an over-expenditure of nearly P3,944,568.05 in the annual budget. The COA's decisions emphasized compliance with established salary rates and budgetary limitations without waivers for the salary increases invoked by the municipality’s resolutions.
Petitioners’ Arguments
Petitioners contended that their resolutions were valid local legislative actions, asserting that the municipal budget did not exceed legal limitations for personal service appropriations. They argued a good faith effort by municipal officials, suggesting the budget review process by the Sangguniang Panlalawigan only considered specific provisions and did not encompass the entire salary increase situation.
Court’s Analysis of Good Faith and Procedural Issues
The Supreme Court examined if the petitioners acted in good faith when disbursing the salary increases despite the subsequent disallowance. The Court determined that procedural arguments regarding the timing of motions for reconsideration were moot, given COA’s acceptance of the petitioners' motions without raising issues about timeliness.
Conclusion on Good Faith
In reviewing the proceedings, the Court upheld the COA's findings related to the budgetar
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Case Overview
- This case pertains to a Petition for Certiorari filed under Rule 64 in relation to Rule 65 of the Rules of Court.
- Petitioners are various municipal officials from Mayoyao, Ifugao, including Ronnie H. Lumayna (Municipal Mayor), and the case is against the Commission on Audit (COA).
- The central issue revolves around the affirmation of a Notice of Disallowance regarding a 5% salary increase for municipal personnel, amounting to P895,891.50, for the period from 15 February to 30 September 2002.
- The COA also denied the petitioners' Motion for Reconsideration through its Decision No. 2007-040, dated 25 October 2007.
Background Facts
- On 15 June 2001, the Department of Budget and Management (DBM) issued Local Budget Circular No. 74 (LBC No. 74), authorizing a 5% salary adjustment for local government unit (LGU) personnel effective 1 July 2001.
- On 13 May 2002, the Sangguniang Bayan of Mayoyao enacted Resolution No. 41, appropriating P1,590,376.00 for salaries and benefits of 17 newly created positions.
- The Sangguniang Panlalawigan approved the 2002 budget but declared that the creation of new positions should not be made retroactive and must align with Civil Service rules.
- On 8 July 2002, Resolution No. 66 was adopted, implementing the 5% salary increase, which was funded throu