Case Summary (G.R. No. 248977)
Background of the Case
The case arises from a petition for certiorari challenging the COA's decision and resolution prohibiting the disbursement of a Productivity Enhancement Incentive (PEI) to Iloilo City employees for the year 2009, amounting to ₱46,424,328.24. The COA initially disallowed the PEI due to violations of budgetary rules, specifically under Section 325(a) of Republic Act No. 7160 (Local Government Code), which limits personal service expenditures.
Legislative Framework
The disallowance was based on two ordinances enacted on December 16, 2009, which facilitated the release of the PEI. However, the audit revealed that the amount appropriated exceeded the city's allowable limit for personal services.
Notice of Disallowance
On August 12, 2010, COA issued a Notice of Disallowance (ND) citing two primary reasons:
- Iloilo City had exceeded its personal services spending cap of 45%.
- The reversion of the calamity fund to pay for the PEI violated the implementing rules of RA 8185, which stipulates that such funds could only revert to the unappropriated surplus for reappropriation in the following budget year.
Appeal and Initial Rulings
Mayor Mabilog appealed the disallowance arguing good faith in the grant of PEI and claimed sufficient funding was availed without impacting city welfare. However, the COA Regional Office upheld the ND, emphasizing adherence to budgetary constraints outlined in Administrative Order No. 276 and relevant DBM (Department of Budget and Management) circulars.
COA Proper Decision
The COA Proper affirmed the regional office's ruling, dismissing various arguments made by petitioners regarding errors in computing personal services limitations and legality of fund reversion. The COA found that the city had indeed exceeded its allocated personal services cap, confirming the application of the limitation to PEI grants.
Petitioner's Arguments
Petitioners raised issues of the COA committing grave abuse of discretion in not recognizing legitimacy of PEI payments, asserting it was detrimental to employees, and claiming lack of good faith due to the complexity of the funding circumstances was misjudged.
Court's Ruling
The Court found that the COA had not committed any grave abuse of discretion. The Court maintained that administrative entities like the COA possess significant expertise, thus their factual determinations are generally upheld unless evidence of misjudgment is presented.
Legal Standards Applied
The ruling focused on clear legal limitations established in RA 7160 and relevant circulars, which collectively govern the financial operations of local government units with the aim to ensure financial sustainability and accountability. The Court underscored that adherence to explicit budgetary
...continue readingCase Syllabus (G.R. No. 248977)
Case Overview
- The case involves a petition for certiorari filed under Rule 64, in relation to Rule 65 of the Rules of Court, challenging the decision and resolution of the Commission on Audit (COA) regarding the disallowance of the Productivity Enhancement Incentive (PEI) granted to the employees of Iloilo City for calendar year 2009.
- The total amount disallowed was ₱46,424,328.24, which was deemed in violation of existing budgetary laws and regulations.
Background of the Case
- On December 16, 2009, the Sangguniang Panlungsod of Iloilo City enacted Ordinance Nos. 2009-095 and 2009-096, which facilitated the grant of PEI to city officials and employees.
- Ordinance No. 2009-095: Approved Supplemental Budget No. 9 for ₱43,465,085.68, including ₱31,431,648.00 from the Calamity Fund, which was reallocated for PEI payments.
- Ordinance No. 2009-096: Authorized the realignment of ₱31,028,321.00 from Personal Services (PS) Savings for additional PEI funding.
- The city officials and employees received PEI amounting to ₱30,000.00 each.
- An audit led to the issuance of Notice of Disallowance (ND) No. 10-001-100-(09) on August 12, 2010, disallowing the PEI payments.
Grounds for Disallowance
- The disallowance was based on two main grounds:
- PS Limitation: Only ₱3,228,671.76 was available for costs chargeable against the PS Savings, violating Section 325(a) of Republic Act No. 7160.
- Improper Use of Calamity Fund: The reversion of ₱31,431,648.00 from the Calamity Fund contravened the Implementing Rules and Regulations of RA 8185, which mandated that unexpended balances should be reverted only for reappropriation in the succeeding budget year.