EN BANC
G.R. No. 238882, January 05, 2021
JUAN B. NGALOB, IN HIS CAPACITY AS VICE-CHAIRMAN OF THE REGIONAL DEVELOPMENT COUNCIL - CORDILLERA ADMINISTRATIVE REGION [RDC-CAR] AND FORMER REGIONAL DIRECTOR OF THE NATIONAL ECONOMIC AND DEVELOPMENT AUTHORITY-CORDILLERA ADMINISTRATIVE REGION (NEDA-CAR), HERMINIA B. SAMUEL, IN HER CAPACITY AS REGIONAL ACCOUNTANT, PATERNO C. LABOY, IN HIS CAPACITY AS FORMER CHIEF ADMINISTRATIVE OFFICER, AND ALL PAYEES IN THE PAYROLL (AS RECIPIENTS OF THE YEAR-END INCENTIVES), Petitioners, v. COMMISSION ON AUDIT, Respondents.
D E C I S I O N
LOPEZ, J.:
This Petition for Certiorari1 under Rule 64, in relation to Rule 65, of the Revised Rules of Court implores this Court to review respondent Commission on Audit's (COA) Decision No. 2016-3352 dated November 9, 2016 and Resolution No. 2017-4913 dated December 28, 2017.
Ngalob appealed the NDs to the COA-CAR Director. In separate Letters9 dated August 15, 2011, Ngalob explained that under the General Appropriations Act (GAA) of 2007, P15,000,000.00 was allocated for the RDC-CAR to pursue social preparation of the CAR into an autonomous region. As this task was not among the regular functions of the RDC under Executive Order (EO) No. 325, the RDC-CAR considered it as a special project or an extra work, the undertaking of which entitles its officials and employees to honoraria under Department of Budget and Management (DBM) Circular No. 2007-210 and Section 46(e)11 of RA No. 952412 (2009 GAA) and Section 49(e)13 of RA No. 997014 (2010 GAA). Ngalob also claimed that in the determination of the grant, the RDC-CAR was guided by factors laid down in DBM Circular No. 2007-2 such as the nature of work assignments, the level of difficulty of the duties assigned, the extent of productivity, and quality of performance in terms of completed and accepted deliverables in accordance with the timeframes set per project. Finally, Ngalob averred that the incentives were legally sourced from the budget allocated in the 2007 GAA in accordance with DBM Circular No. 2007-2.
Name Position/Designation Nature of Participation in the Transaction Juan B. Ngalob Regional Director Approved the payment of Staff Incentive Herminia B. Samuel Reg'l Accountant Certified that supporting documents are complete and proper Paterno C. Laboy Chief Admin. Officer Certified that charges are necessary and lawful and supporting documents are valid, proper and legal All payees in the payroll Benefited as payees
WHEREFORE, the herein appeal is denied and the disallowances under ND No. 11-001-101(09) and ND No. 11-005-101(10) dated April 13, 2011 and June 21, 2011, respectively, are AFFIRMED.24Aggrieved, Ngalob filed a Petition for Review25 before the COA Proper, reiterating the same arguments. In addition, Ngalob invoked good faith and social justice in favor of labor to sustain the grant of the incentives.
WHEREFORE, premises considered, the petition is hereby DENIED for lack of merit. Accordingly, Commission on Audit - Cordillera Administrative Region Decision No. 2012-35 dated August 31, 2012 and ND Nos. 11-001-101-(09) dated April 13, 2011 and 11-005-101-(10) dated June 21, 2011 on the payment of year-end incentives to Regional Development Council officials and National Economic and Development Authority - Cordillera Administrative Region employees for calendar years 2009 and 2010 in the amounts of [P]1,095,000.00 and [P]1,080,000.00, respectively, are AFFIRMED.27 (Emphasis in the original.)Ngalob's motion for reconsideration was likewise denied in the COA Proper Decision No. 2017-491:28
WHEREFORE, premises considered, the Motion for Reconsideration of Mr. Juan B. Ngalob, former Vice Chairman, Regional Development Council (RDC) - Cordillera Administrative Region (CAR), and Regional Director, National Economic and Development Authority (NEDA) - CAR, et al., is hereby DENIED for lack merit. Accordingly, Commission on Audit (COA) Decision No. 2016-335 dated November 9, 2016, which denied the Petition for Review of COA-CAR Decision No. 2012-35 dated August 31, 2012 and affirmed Notice of Disallowance Nos. 11-001-101(09) dated April 13, 2011 and 11-005-101(10) dated June 21, 2011, on the payment of year-end incentives to RDC officials and NEDA CAR employees for calendar years 2009 and 2010, in the amounts of [P]1,095,000.00 and [P]1,088,000.00, respectively, is AFFIRMED.Hence, this Petition, raising the following issues:
The Prosecution and Litigation Office, Legal Services Sector, this Commission, is directed to forward the records of the case to the Office of the Ombudsman for investigation and filing of appropriate charges considering the possible violation of the provisions of the Revised Penal Code against the approving officers.29
(1) | Whether the COA acted with grave abuse of discretion upholding the disallowance; and |
(2) | Whether the COA acted with grave abuse of discretion affirming petitioners' liability. |
Moreover, paragraph 4.5 of DBM Circular No. 2007-2 was emphatic in requiring that:cralawred
- title of the project;
- objectives of the project, including the benefits to be derived therefrom;
- outputs or deliverables per project component;
- project timetable;
- skills and expertise required;
- personnel assigned to the project and the duties and responsibilities of each;
- expected deliverables per personnel assigned to the project per project component at specified timeframes; and
- cost by project component, including the estimated cost for honoraria for each personnel based on man-hours to be spent in the project beyond the regular work hours; personnel efficiency should be a prime consideration in determining the man-hours required.
Similar conditions for the grant of honoraria to officials and employees assigned to special projects are imposed in the 2009 and 2010 GAAs, i.e., aside from the special project entailing rendition of additional work over and above their regular workload, the special project should be "reform-oriented or developmental, contribute[s] to the improvement of service delivery and enhancement of the performance of the core functions of the agency, and ha[s] specific timeframes and deliveries for accomplishing objectives and milestones set by the agency for the year; x x x."35
4.5 Payment of honorarium shall be made only upon completion and acceptance by the agency head of the deliverable per project component. (Emphasis supplied.)
E. The Rules on ReturnThe civil liability of approving or certifying officers provided under Sections 3847 and 39,48 Chapter 9, Book I of the Administrative Code of 1987, and the treatment of such liability as solidary under Section 43,49 Chapter 5, Book VI of the same Code, are grounded upon the manifest bad faith, malice, or gross negligence of public officers, who have in their favor the presumption of good faith and regularity in the performance of official duty.50 On the other hand, the payees' obligation in a disallowed transaction is grounded upon the civil law principles of solutio indebiti51 and unjust enrichment.52 Thus, while the officers' good faith or bad faith is determinative of their liability, such state of mind is immaterial with regard to the recipients' obligation to return in disallowance cases. By way of exception, the recipients do not incur liability to refund when they can prove their entitlement to what they received as a matter of fact and law because in such situation, there is no undue payment and the government incurs no loss. Additionally, certain justifications that may excuse a recipient's liability to return may be recognized such as undue prejudice, social justice considerations, and other bona fide exceptions depending on the purpose and nature of the disallowed amount relative to the attending circumstances.53x x x x
2. If a Notice of Disallowance is upheld, the rules on return are as follows:
- Approving and certifying officers who acted in good faith, in regular performance of official functions, and with the diligence of a good father of the family are not civilly liable to return consistent with Section 38 of the Administrative Code of 1987.
- Approving and certifying officers who are clearly shown to have acted in bad faith, malice, or gross negligence are, pursuant to Section 43 of the Administrative Code of 1987, solidarily liable to return only the net disallowed amount which, as discussed herein, excludes amounts excused under the following sections 2c and 2d.
- Recipients - whether approving or certifying officers or mere passive recipients - are liable to return the disallowed amounts respectively received by them, unless they are able to show that the amounts they received were genuinely given in consideration of services rendered.
- The Court may likewise excuse the return of recipients based on undue prejudice, social justice considerations, and other bona fide exceptions as it may determine on a case to case basis.
| Very truly yours, |
(SGD) EDGAR O. ARICHETA | |
Clerk of Court |
Endnotes:
1Rollo, pp. 23-45.
2Id. at 87-92.
3Id. at 50-54.
4Id. at 55-56.
5Id. at 57-58.
6Id. at 59.
7Id. at 60.
8Id. at 59-60.
9Id. at 61-63 and 64-66.
10 "Guidelines on the Grant of Honoraria Due to Assignment in Government Special Projects."
11 SEC. 46. Honoraria. - The respective agency appropriations for honoraria shall only be paid to the following:x x x x
(e) Officials and employees assigned to special projects, subject to the following conditions:
(i) Said special projects are reform-oriented or developmental, contribute to the improvement of service delivery and enhancement of the performance of the core functions of the agency, and have specific timeframes and deliveries for accomplishing objectives and milestones set by the agency for the year; and
(ii) Such assignment entails rendition of work in addition to, or over and above, their regular workload. In these instances, rate of honoraria shall depend on the level of responsibilities, nature of work rendered, and extent of individual contribution to produce the desired outputs: PROVIDED, That total honoraria received from all special projects shall not exceed twenty-five percent (25%) of the annual basic salaries; x x x.
12 AN ACT APPROPRIATING FUNDS FOR THE OPERATION OF THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES FROM JANUARY ONE TO DECEMBER THIRTY-ONE, TWO THOUSAND NINE, AND FOR OTHER PURPOSES; approved on March 12, 2009.
13 SEC. 49. Honoraria. - The respective agency appropriations for honoraria shall only be paid to the following:x x x x
(e) Officials and employees assigned to special projects, subject to the following conditions:
(i) Said special projects are reform-oriented or developmental, contribute to the improvement of service delivery and enhancement of the performance of the core functions of the agency, and have specific timeframes and deliveries for accomplishing objectives and milestones set by the agency for the year; and
(ii) Such assignment entails rendition of work in addition to, or over and above, their regular workload. In these instances, rate of honoraria shall depend on the level of responsibilities, nature of work rendered, and extent of individual contribution to produce the desired outputs: PROVIDED, That total honoraria received from all special projects shall not exceed twenty-five percent (25%) of the annual basic salaries; x x x.
14 AN ACT APPROPRIATING FUNDS FOR THE 0PERMION OF THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES FROM JANUARY ONE TO DECEMBER THIRTY-ONE, TWO THOUSAND AND TEN, AND FOR OTHER PURPOSES; approved on January 1, 2010.
15 "Providing for a Regional Development Council in the Cordillera Administrative Region and for other Purposes;" approved on July 30, 2001.
16 "Creating the Cordillera Administrative Region, Appropriating Funds Therefor and for other Purposes;" approved on July 15, 1987.
17 Executive Order (EO) No. 220, Section 3 (c); signed on July 15, 1987.
18 SEC. 8. No elective or appointive public officer or employee shall receive additional, double, or indirect compensation, unless specifically authorized by law, nor accept without the consent of the Congress, any present, emolument, office, or title of any kind from any foreign government.
Pensions or gratuities shall not be considered as additional, double, or indirect compensation. (Emphasis supplied.)
19Rollo, pp. 67-68.
20Id. at 132-137.
21 "Reorganization of the Regional Development Councils Repealing Executive Order No. 308, Series of 1987, as amended by Executive Order Nos. 318, (S. of 1988), 347 (S. of 1989), 455 (S. of 1991) and 505 (S. of 1992);" approved on April 12, 1996.
22Supra note 11.
23Supra note 13.
24Rollo, p. 137.
25Id. at 77-86.
26Id. at 87-92.
27Id. at 91.
28Id. at 50-54.
29Id. at 52-53.
30Maritime Industry Authority v. Commission on Audit, 750 Phil. 288, 331 (2015).
31 "Guidelines on the Grant of Honoraria to the Governing Boards of Collegial Bodies," May 8, 2007.
32 EO No. 292 (1987).
33 EO No. 292 (1987), Book VI, Chapter 1, Section 2(13).
34 EO No. 292 (1987), Chapter 1, Book VI, Section 2(12).
35 Republic Act (RA) No. 9524, Section 46(e)(i); and RA No. 9970, Section 49(e)(i). (Emphasis supplied.)
36 4.7. For rating purposes, the project management shall formulate a performance evaluation plan that is transparent and fair, and considers timeliness, quality of outputs, and other applicable work efficiency determinants.
37 RA No. 9524, Section 46(e); RA No. 9970, Section 49(e)(ii); and DBM Circular No. 2007-2, paragraph 4.9.
38Rollo, p. 58.
39 October 30, 2001.
40 COA Circular No. 2002-002 (2002), Volume III, Chapter 1 Section 7(a) and (b).
41 DBM Circular No. 2007-2, par. 5.1.
42 DBM Circular No. 2007-510, par. 6.1.
43 See Nazareth v. Han. Villar, et al., 702 Phil. 319, 338 (2013).
44 SEC. 57. Personal Liability of Officials or Employees for Payment of Unauthorized Personal Services Cost. - No official or employee of the national government, LGUs, and GOCCs shall be paid any personnel benefits charged against the appropriations in this Act, other appropriations laws or income of the government, unless specifically authorized by law. Grant of personnel benefits authorized by law but not supported by specific appropriations shall also be deemed unauthorized.
The payment of any unauthorized personnel benefit in violation of this section shall be null and void. The erring officials and employees shall be subject to disciplinary action under the provisions of Section 43, Chapter 5 and Section 80, Chapter 7, Book VI of EO No. 292, and to appropriate criminal action under existing penal laws. (Emphasis supplied.)
45 SEC. 58. Personal Liability of Officials or Employees for Payment of Unauthorized Personal Services Cost. - No official or employee of the National Government, GOCCs and LGUs, shall be paid any personnel benefits charged against the appropriations in this Act, other appropriations laws or income of the government, unless specifically authorized by law. Grant of personnel benefits authorized by law but not supported by specific appropriations shall also be deemed unauthorized.
The payment of any unauthorized personnel benefit in violation of this section shall be null and void. The erring officials and employees shall be subject to disciplinary action in accordance with Section 43, Chapter 5 and Section 80, Chapter 7, Book VI of EO No. 292, and to appropriate criminal action under existing penal laws. (Emphasis supplied.)
46 G.R. No. 244128, September 8, 2020.
47 SEC. 38. Liability of Superior Officers. - (1) A public officer shall not be civilly liable for acts done in the performance of his official duties, unless there is a clear showing of bad faith, malice or gross negligence.x x x x
(3) A head of a department or a superior officer shall not be civilly liable for the wrongful acts, omissions of duty, negligence, or misfeasance of his subordinates, unless he has actually authorized by written order the specific act or misconduct complained of.
48 SEC. 39. Liability of Subordinate Officers. - No subordinate officer or employee shall be civilly liable for acts done by him in good faith in the performance of his duties. However, he shall be liable for willful or negligent acts done by him which are contrary to law, morals, public policy and good customs even if he acted under orders or instructions of his superiors.
49 SEC. 43. Liability for Illegal Expenditures. - Every expenditure or obligation authorized or incurred in violation of the provisions of this Code or of the general and special provisions contained in the annual General or other Appropriations Act shall be void. Every payment made in violation of said provisions shall be illegal and every official or employee authorizing or making such payment, or taking part therein, and every person receiving such payment shall be jointly and severally liable to the Government for the full amount so paid or received.
Any official or employee of the Government knowingly incurring any obligation, or authorizing any expenditure in violation of the provisions herein, or taking part therein, shall be dismissed from the service, after due notice and hearing by the duly authorized appointing official. If the appointing official is other than the President and should he fail to remove such official or employee, the President may exercise the power of removal.
50Blaquera v. Alcala, 356 Phil. 678, 765 (1998).
51 CIVIL CODE, Art. 2154. If something is received when there is no right to demand it, and it was unduly delivered through mistake, the obligation to return it arises.
52 CIVIL CODE, Art. 22. Every person who through an act of performance by another, or any other means, acquires or comes into possession of something at the expense of the latter without just or legal ground, shall return the same to him.
53Madera v. Commission on Audit, supra note 46.
54 (1) Certificates of Availability of Funds pursuant to Section 40 of the Administrative Code, (2) in-house or Department of Justice legal opinion, (3) that there is no precedent disallowing a similar case in jurisprudence, (4) that it is traditionally practiced within the agency and no prior disallowance has been issued, [or] (5) with regard the question of law, that there is a reasonable textual interpretation on its legality. Id.
55Tetangco, et al. v. Commission on Audit, 810 Phil. 459, 467 (2017); Metropolitan Works and Sewerage System v. Commission on Audit, 821 Phil. 117, 140 (2017).
56 769 Phil. 327, 346 (2015).