Case Summary (G.R. No. 244193)
Applicable Law
The case is primarily governed by COA Circular No. 2006-001, which outlines the rules for disbursement of EME for government-owned and controlled corporations (GOCCs) and government financial institutions (GFIs). The constitutional basis invoked is Article IX(D) of the 1987 Philippine Constitution, which outlines the authority of the COA to promulgate auditing rules and regulations.
Background Facts
TransCo, established under Republic Act No. 9136 (or EPIRA), is responsible for the national electrical transmission system. In 2010, TransCo disbursed significant amounts as EME to its officials based on the General Appropriations Act. Subsequently, a Notice of Disallowance was issued by suspicious auditors due to insufficient supporting documentation for those expenses, specifically the absence of receipts in violation of COA Circular No. 2006-001.
COA's Initial Findings
The COA initially affirmed the disallowance after the matter was escalated following an appeal by TransCo. The COA clarified that mere certifications, as presented by TransCo to support the reimbursement claims, did not meet the necessary documentation standards as they lacked evidence of actual disbursements.
Court's Ruling
The Supreme Court ruled partly in favor of TransCo, emphasizing that the burden of proof lies with TransCo to demonstrate compliance with COA's requirements for EME reimbursement, specifically that claims must be supported by receipts or other evidence of expenditure. The Court reiterated that the absence of such documentation justified the COA’s disallowance.
Good Faith Defense
The Court examined the good faith argument posited by TransCo officials, arguing that they believed they were compliant with the auditing rules. The Court recognized the presumption of good faith attributed to public officers but highlighted that this presumption does not excuse compliance with clear legal standards. It noted that the officials’ actions were a result of bad judgment rather than ill intent and, therefore, they should not be liable to return the disallowed amount.
Liability of Passive Recipients
The ruling also outlined that all passive recipients—including approving/certifying officers—are liable to return disallowed expenses unless they can prove the funds were received for services rendered. The Court noted the principles of unj
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Case Citation
- 889 Phil. 1170 EN BANC
- G.R. No. 244193, November 10, 2020
Parties Involved
- Petitioner: National Transmission Corporation (TransCo)
- Respondents: Commission on Audit (COA) and COA Chairperson Michael G. Aguinaldo
Background of the Case
- A certification not substantiating "the paying out of an account payable" or disbursement fails as a valid document for reimbursement of extraordinary and miscellaneous expenses (EME) for officials of government-owned and controlled corporations (GOCCs).
- COA has the authority to disallow EME disbursements if they contravene COA Circular No. 2006-001.
Procedural History
- The case originated from a Notice of Disallowance (ND) issued on June 1, 2011, disapproving EME payments to TransCo officials amounting to ₱1,841,165.44.
- TransCo appealed the ND to COA Corporate Government Sector (COA-CGS), which initially lifted the disallowance but was later disapproved by the COA in Decision No. 2017-115 on April 26, 2017.
- The COA upheld the ND, asserting that a mere certification cannot support a claim for EME reimbursement as it does not meet the requirements set forth in COA Circular No. 2006-001.
Facts of the Case
- TransCo, established under Republic Act No. 9136 (EPIRA), is responsible for the electrical transmission functions of the National Power Corporation.
- In 2010, TransCo disbursed EME to its officials based on the General Appropriations Act (RA 9970).
- The COA’s disallowance cited that EME payments were made on a commutable basis and lacked necessary receipts.
Ruling of the COA-CGS
- The appeal to COA-CGS initially resulted in a