Case Summary (G.R. No. 250089)
Background of the Case
PhilHealth, created under R.A. No. 7875, is a government-owned and controlled corporation responsible for administering the national health insurance program in the Philippines. The COA determined that PhilHealth disbursed significant allowances and benefits to its officials and employees in 2012 totaling P56,577,286.88, which were subsequently disallowed due to lack of legal basis and absence of necessary approvals.
COA Findings
The COA, upon conducting a routine audit, issued ND No. 2013-01(12), disallowing numerous benefits provided by PhilHealth, including Shuttle Service Allowance, Medical Mission and Critical Allowance, Birthday Gift, and others, due to non-compliance with statutory provisions requiring prior approval from the President for such allowances. The COA clarified that even if fiscal autonomy was granted, it did not grant absolute discretion to approve compensation independently.
Petitioner’s Arguments
PhilHealth appealed the ND, contending that its fiscal autonomy allowed it to determine compensation and allocation of benefits independently. PhilHealth cited executive communications from former President Gloria Macapagal-Arroyo recognizing this autonomy and argued that the benefits were granted in good faith based on board resolutions previously accepted.
COA's Ruling on the Appeal
The COA rejected PhilHealth's appeal, affirming its ND, asserting that the issuance of benefits still required presidential approval as enforced by P.D. No. 1597. The COA emphasized that their audit authority was fundamental in ensuring appropriate use of public funds and concluded that the lack of required approvals rendered the allowances illegal and subject to disallowance.
Legal Analysis
The Supreme Court upheld the findings of the COA, asserting that the nature of PhilHealth as a GOCC necessitates conformance with national guidelines on compensation, including adherence to P.D. No. 1597 and R.A. No. 6758, which clearly outline the requirements for the issuance of allowances and benefits.
Liability of PhilHealth Officials
The decision highlighted that while recipients of the disallowed allowances would generally be presumed to act in good faith, this could be overridden by sufficient evidence of negligence, malice, or a lack of due diligence. Approving officers were found jointly liable for gross negligence for failing to observe
...continue readingCase Syllabus (G.R. No. 250089)
Case Background
- The case involves a Petition for Certiorari filed by the Philippine Health Insurance Corporation (PHIC) against the Commission on Audit (COA) and its Chairperson, Michael G. Aguinaldo.
- The petition challenges COA Decision No. 2015-421 dated December 28, 2015, which affirmed Notice of Disallowance No. 2013-01(12) issued on May 13, 2013. This notice disallowed certain allowances and benefits granted to PHIC personnel for the year 2012, totaling PHP 56,577,286.88.
- The COA en banc also denied PHIC's Motion for Reconsideration on September 19, 2019, citing lack of merit.
Relevant Entities
- Philippine Health Insurance Corporation (PHIC): A government-owned and controlled corporation established under Republic Act No. 7875, responsible for the national health insurance program.
- Commission on Audit (COA): A constitutional body with the authority to audit government accounts, ensuring the lawful disbursement of public funds.
Summary of Disallowed Benefits
- The disallowed allowances and benefits include:
- Shuttle Service Allowance: PHP 5,591,660.84
- Medical Mission and Critical Allowance: PHP 264,635.52
- Birthday Gift: PHP 1,568,176.22
- Welfare Support Allowance: PHP 7,245,698.73
- Educational Assistance: PHP 10,716,329.17
- Subsistence Allowance: PHP 1,958,863.65
- Laundry Allowance: PHP 195,886.35
- Christmas Package: PHP 9,544,117.21
- Productivity Incentive Allowance: PHP 10,971,130.24
- Gratuity Gift (for contractor): PHP 706,500.00
- Special Events Gift (for contractor): PHP 99,632.35
- Product Completion Incentive (for contractor): PHP 51,744.00
- Efficiency Gift (for contractor): PHP 72,000.00
- Grocery Allowance: PHP 3,795,956.30
Petitioner's Argument
- PHIC contended that the allowances were lawful under the fiscal autonomy provided by Section 16(n) of R.A. No. 7875, which allows it to fix compensation without interference from executive orders or regulations.
- PHIC claimed that its fiscal independence was confirmed by former President Gloria Macapagal-Ar