EN BANC
G.R. No. 242082, June 15, 2021
SER JOHN PASTRANA, VIVIAN VERIDIANO DACANAY, AND NORLYN TOMAS, Petitioners, v. COMMISSION ON AUDIT, Respondent.
G.R. No. 242083
MARY JANE G. YSMAEL, Petitioner, v. COMMISSION ON AUDIT, Respondent.
D E C I S I O N
DELOS SANTOS, J.:
Before the Court are Petitions for Certiorari1 under Rule 64 in relation to Rule 65 of the Rules of Court assailing the Decision2 No. 2015-004 dated January 28,2015 and the Resolution3 No. 2018-201 dated January 30, 2018 of the Commission on Audit (COA) and the Decision4 No. 2012-003 of COA-National Government Sector-Cluster B (NGS-Cluster B) dated February 9, 2012. The COA affirmed Notice of Disallowance No. 2011001-151 (10)5 (subject ND) dated January 6, 2011 disallowing the payment of Collective Negotiation Agreement (CNA) incentives to the officials and employees of the Land Registration Authority (LRA) for calendar year (CY) 2009.
Designated as employees' representatives to the consultative committee were petitioner Pastrana, Vivian Dacanay (petitioner Dacanay), Norlyn Tomas8 (petitioner Tomas), and Cheryl Morales. Maryjane Ysmael (petitioner Ysmael), Chief Administrative Officer, General Services Division, was also named as the employees' representative to the consultative committee.9
a) the guidelines/criteria to be followed in the grant of the CNA incentive; b) the total amount of unencumbered savings at the end of the year which were realized out of cost-cutting measures identified in the CNAs and its supplement and which were the results of the joint efforts of labor and management; c) the apportionment of such savings; and d) the individual amount of the CNA incentive to be granted to the employee concerned based on the established guidelines/criteria.
WHEREFORE, premises considered, the instant appeal is hereby DENIED for lack of merit and the ND No. 2011-001-151(10) dated January 6, 2011 is hereby affirmed.22chanRoblesvirtualLawlibraryThe COA-NGS-Cluster 8 opined that the charging of the CNA incentive against the allotment for MOOE under the Special Account in the General Fund or Fund 151 of the LRA is illegal. It underscored that Fund 151 is limited by the Special Budget submitted by the LRA to the DBM in view of Section 35, Chapter 5, Book VI of Executive Order (EO) No. 292 otherwise known as Administrative Code of 1987. However, in this case, the CNA incentive was not among the proposed expenditures requested by the LRA and released by the DBM. The COA-NGS-Cluster B stated that Fund 151 was established for specific purposes other than the payment of the CNA incentive.23
WHEREFORE, premises considered, the instant petition for review is hereby DISMISSED for having been filed out of time. Accordingly, National Government Sector-Cluster B Decision No. 2012-003 dated February 9, 2012, which affirmed Notice of Disallowance No. 2011-001-151(10) dated January 6, 2011, on the payment of collective negotiation agreement incentives to officials and employees of the Land Registration Authority amounting to P30, 180,000.00, is final and executory.27chanRoblesvirtualLawlibraryGabay ng LRA Inc. filed a Motion for Reconsideration28 of the Decision dated January 28, 2015 of the COA Proper which was partly granted in a Resolution29 dated January 30, 2018, the dispositive portion of which reads:chanroblesvirtualawlibrary
WHEREFORE, premises considered, the Motion for Reconsideration of Gabay ng Land Registration Authority (LRA), Inc., represented by its President, Mr. Ser John Pastrana, in behalf of the members of the employees' union, is hereby PARTLY GRANTED. Accordingly, Commission on Audit Decision No. 2015-004 dated January 28, 2015 and Notice of Disallowance No. 2011-001-151(10) dated January 6, 2011, on the payment of Collective Negotiation Agreement Incentives to LRA officials and employees, in the total amount of P30,180,000.00, are AFFIRMED with MODIFICATION. The payees who received the disallowed incentives in good faith need not refund the same. However, the recommending, certifying, and approving officers named liable for the disallowance shall remain liable therefor.The COA Proper granted the request of Gabay ng LRA Inc. to relax the application of procedural rules to serve substantial justice. It reiterated its ruling that the grant of CNA incentive to LRA employees violated existing laws and regulations. It ratiocinated that although PSLMC Resolution No. 4 allows the grant of CNA incentive to government personnel, such grant should comply with the requirement on funding source under DBM Circular No. 2006-1, such that the CNA incentive must be sourced solely from savings from released MOOE allotments for the year under review.31
The Prosecution and Litigation Office, Legal Services Sector, this Commission, is hereby directed to forward the case to the Office of the Ombudsman for investigation and filing of appropriate charges, if warranted, against the persons liable for the transaction.30chanRoblesvirtualLawlibrary
Section 103. General liability for unlawful expenditures. - Expenditures of government funds or uses of government property in violation of law or regulations shall be a personal liability of the official or employee found to be directly responsible therefor.Based on the above provision, an official or employee shall be personally liable for unauthorized expenditures if the following requisites are present: ( 1) there must be an expenditure of government funds or use of government property; (2) the expenditure is in violation of law or regulation; and (3) the official is found directly responsible therefor.43
It is clear from the foregoing that the determination of the extent of personal liability of public officers in disallowance cases essentially calls for the identification of the reason behind the disallowance.44 A person can be held liable under a notice of disallowance when it is shown that he or she is directly responsible for the transaction characterized as illegal, irregular, unnecessary, excessive, extravagant, or unconscionable.45 Thus, the validity of the disallowance must necessarily have to be determined first before the extent of the public officer's personal liability can be ascertained. If the Court finds that the COA committed grave abuse of discretion amounting to lack or excess of jurisdiction in issuing the notice of disallowance and sets aside said notice, there is no longer any civil liability/obligation to return to speak of.
SECTION 19. DETERMINATION OF PERSONS LIABLE FOR AUDIT DISALLOWANCES OR CHARGES
19.1. The liability of public officers and other persons for audit disallowances shall be determined on the basis of: (a) the nature of the disallowance; (b) the duties, responsibilities or obligations of the officers/persons concerned; (c) the extent of their participation or involvement in the disallowed transaction; and (d) the amount of losses or damages suffered by the government thereby. (Underscoring supplied)
The payment of the CNA incentive was correctly disallowed in audit. |
5.0. Policy GuidelinesThe rule is that to justify the grant of the CNA incentive, it is not enough that savings are attained by the concerned NGA, LGU, SUC, GOCC, or GFI, as the case may be. It must be clearly demonstrated that the savings from which the payment of the CNA incentive was sourced are: first, derived from the released MOOE allotments; and second, generated out of the cost-cutting measures specified in the CNA and its supplements. Further, since it is exclusively sourced from the savings generated from cost-cutting measures and systems improvement, the amount/rate of the CNA incentive must not have been previously agreed upon in the CNA or fixed in its supplements.
xxxx 5.6. The amount/rate of the individual CNA Incentive: xxxx 5.6.1. Shall not be pre-determined in the CNAs or in the supplements thereto since it is dependent on savings generated from cost-cutting measures and systems improvement, and also from improvement of productivity and income in GOCCs and GFIs; xxxx 5.7. The CNA Incentive for the year shall be paid as a one-time benefit after the end of the year, provided that the planned programs/activities/projects have been implemented and completed in accordance with the performance targets for the year.
6.0. Procedural Guidelines
6.1. An Employees' Organization - Management Consultative Committee or a similar body composed of designated representatives from the management and the accredited employees' organization shall review the agency's financial records and report of operations at the end of the fiscal year, and shall arrive at a consensus on the following items: 6.1.1. The guidelines/criteria to be followed in the grant of the CNA Incentive; 6.1.2. The total amount of unencumbered savings at the end of the year which were realized out of cost-cutting measures identified in the CNAs and supplements thereto, and which were the results of the joint efforts of labor and management; 6.1.3. The apportioned amounts of such savings shall cover the following items: "Fifty percent (50%) for CNA Incentive Thirty percent (30%) for improvement of working conditions and other programs and/or to be added as part of the CNA Incentive, as may be agreed upon in the CNA Twenty percent (20%) to be reverted to the General Fund for the national government agencies or to the General Fund of the constitutional commissions, state universities and colleges, and local government units concerned, as the case may be;" or for GOCCs and GFIs, the twenty percent (20%) is to be retained and "to be used for the operations of the agency to include among others, purchase of equipment critical to the operations and productivity improvement programs" 6.1.4. The individual amount of the CNA Incentive to be granted to the employees concerned based on the established guidelines/criteria. Such agreements shall be incorporated in a written resolution to be signed by the representatives of both parties and noted by the agency head. This resolution shall serve as basis for accounting and auditing purposes. xxxx
7.0. Funding Source
7.1. The CNA Incentive shall be sourced solely from savings from released Maintenance and Other Operating Expenses (MOOE) allotments for the year under review, still valid for obligation during the year of payment of the CNA, subject to the following conditions: 7.1.1. Such savings were generated out of the cost cutting measures identified in the CNAs and supplements thereto; 7.1.2. Such savings shall be reckoned from the date of signing of the CNA and supplements thereto; 7.1.3. Such savings shall be net of the priorities in the use thereof such as augmentation of amounts set aside for compensation, bonus, retirement gratuity, terminal leave benefits, old-age pension of veterans and other personnel benefits authorized by law and in special and general provisions of the annual General Appropriations Act, as well as other MOOE items found to be deficient. Augmentation shall be limited to the actual amount of deficiencies incurred; and xxxx 7.4. NGAs shall submit to DBM a report on the utilization of savings for the payment of the CNA Incentive. (Emphases supplied)
Special ProvisionsThe first LRA special provision expressly provides that its implementation is subject to the following conditions: (1) the submission of a special budget pursuant to Section 35,55 Chapter 5, Book VI of EO 292, otherwise known as the Administrative Code of 1987; and (2) the issuance of the guidelines by the DBM in accordance with the President's Veto Message.56
1. Use of Income. In addition to the amounts appropriated herein, Two Hundred Twenty Six Million Two Hundred Ninety Nine Thousand Pesos (P226,299,000) for MOOE and Forty Two Million Pesos (P42,000,000) for Capital Outlays shall be sourced from the twenty (20%) percent of the land registration fees/collections of the Register of Deeds and Land Registration Authority pursuant to P.D. No. 1529, subject to the submission of a Special Budget pursuant to Section 35, Chapter 5, Book VI of E.O. No. 292.
(CONDITIONAL IMPLEMENTATION - President's Veto Message, March 12, 2009, page 1259, R.A. No. 9524)54 (Underscoring supplied)
Petitioners are liable for the return of the disallowed amount. |
Good faith is essentially a state of mind at a fixed point in time that purports "honesty of intention, and freedom from knowledge of circumstances which ought to put the holder upon inquiry; an honest intention to abstain from taking any unconscientious advantage of another, even through technicalities of law, together with absence of all information, notice, or benefit or belief of facts which render transaction unconscientious." It has been a valid defense of public officials against the return of disallowed benefits or allowances based on the principle that public officials are entitled to the presumption of good faith when discharging their official duties.65chanRoblesvirtualLawlibraryBut the presumption is overturned when there is a clear showing of bad faith, malice, or gross negligence66 pursuant to Section 38 (1) of the Administrative Code of 1987, viz.:chanroblesvirtualawlibrary
Section 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.Settled is the rule that the patent disregard of several case laws and COA directives amounts to gross negligence.67 In Casal v. Commission on Audit,68 the Court found the approving officials liable for the refund of the incentive award due to their complete disregard of the issuances of the President and the directives of the COA. The officials' failure to observe the issuances amounted to gross negligence, which is inconsistent with the presumption of good faith.69
[N]egligence characterized by the want of even slight care, or by acting or omitting to act in a situation where there is a duty to act, not inadvertently but willfully and intentionally, with a conscious indifference to the consequences, insofar as other persons may be affected. It is the omission of that care that even inattentive and thoughtless men never fail to give to their own property. It denotes a f1agrant and culpable refusal or unwillingness of a person to perform a duty. In cases involving public officials, gross negligence occurs when a breach of duty is flagrant and palpable.70chanRoblesvirtualLawlibraryPetitioners Pastrana, Dacanay, and Tomas were the duly designated representatives in the Employees' Organization-Management Consultative Committee as provided in Administrative Order No. 2009-16.71 They took part in the review of the LRA's financial records and operations at the end of the fiscal year. They were expected to reach an agreement with the LRA management outlining the guidelines for the grant of the CNA incentive and determining the total amount of unencumbered savings, the appportionment of such savings, and the individual amount of the CNA incentive to be granted to the employees. They knew fully well that the agreement must be contained in a written resolution and signed by them and the management's representatives. But there was no such consensus alleged and presented in this case. The guidelines for the grant of the CNA incentive and the authorization for the release of the individual amount thereof were reflected in separate documents signed by Administrator Ulep alone. To Our mind, the lack of consensus among the members of the Employees' OrganizationManagement Consultative Committee even lends support to the COA's finding that the amount of the CNA incentive pegged at P15,000.00 per employee was predetermined and thus violative of Item 5.6.1. of the DBM Circular No. 2006-1. As aptly pointed out by the COA, the deliberate disregard of the existing policy and procedural guidelines negates their claim of good faith.
| Very truly yours, |
(SGD) MARIFE M. LOMIBAO-CUEVAS | |
Clerk of Court |
Endnotes:
1Rollo (G.R. No. 242082), pp. 3-22; rollo (G.R. No. 242083), pp. 3-26.
2Rollo (G.R. No. 242082), pp. 43-45.
3 Id. at 46-55.
4 Id. at 34-42.
5 Id. at 23-33.
6 Id. at 5-6, 72.
7 Id. at 99.
8 Also referred to as Norilyn Tomas in some parts of the rollo.
9Rollo (G.R. No. 242082), p. 99.
10Rollo (G.R. No. 242083), p. 107.
11 Id. at 108-110.
12Rollo (G.R. No. 242082), p. 23.
13 Grant of Collective Negotiation Agreement (CNA) Incentive.
14Rollo (G.R. No. 242082), pp. 27-28.
15 Authorizing the Grant of Collective Negotiation Agreement (CNA) Incentive to Employees in Government Agencies; signed on December 27, 2005.
16 Grant of Collective Negotiation Agreement (CNA) Incentive for National Government Agencies, State Universities and Colleges and Local Government Units; approved on November 14, 2002.
17Rollo (G.R. No. 242082), p. 24.
18Rollo (G.R. No. 242083), p. 104.
19Rollo (G.R. No. 242082), pp. 30-31.
20 Id. at 78-83.
21 Id. at 34-42.
22 Id. at 42.
23 Id. at 38-39.
24 Id. at 40-42.
25 Id. at 84-98. LRA filed a motion for reconsideration, herein treated as a petition for review before the COA.
26 Id. at 43-45.
27 Id. at 44.
28 Id. at 56-66.
29 Id. at 46-55.
30 Id. at 53-54.
31 Id. at 49-51.
32 Id. at 52-53.
33 Id. at 8.
34 Id. at 9-10.
35 Id. at 10-12.
36Rollo (G.R. No. 242083), p. 11.
37 Id. at 13.
38Rollo (G.R. No. 242082), p. 231.
39Rollo (G.R. No. 242083), pp. 285-286.
40Rollo (G.R. No. 242082), unpaginated.
41 Id. at 8.
42 Government Auditing Code of the Philippines; approved on June 11, 1978.
43Sambo v. Commission on Audit, 811 Phil. 344, 354 (2017).
44 See Separate Concurring Opinion of Associate Justice Marvic Mario Victor F. Leonen in Madera v. Commission on Audit, G.R. No. 244128, September 8, 2020.
45 Catu-Lopez v. Commission on Audit, G.R. No. 217997, November 12, 2019.
46 Section 3 of PSLMC Resolution No. 4, S. 2002.
47Rollo (G.R. No. 242083), p. 84.
48Rollo (G.R. No. 242082), p. 73.
49 In Montejo v. Commission on Audit (G.R. No. 232272, July 24, 2018), the Court agreed with the pronouncement of the COA En Banc that the Department of Science and Technology (DOST) could have easily proven that the payment of the CNA incentive was solely sourced from the savings generated from the cost-cutting measures conducted by showing a comparative statement of DBMapproved level of operating expenses and actual operating expenses. The Court sustained the disallowance of the grant/release of the CNA Incentives to the officials and employees of the DOST for failure to comply with the directive of DBM Budget Circular No. 2006-1.
50Rollo (G.R. No. 242083), p. 85.
51 Item 5.7 of DBM Circular No. 2006-1.
52 Item 6.1 of DBM Circular No. 2006-1.
53 Republic Act No. 9524; approved on March 12, 2009.
54 GAA 2009 Archives, <https://www.dbm.gov.ph/index.php/dbm-publications/general-appropriationsact-gaa/167-publications/general-appropriations-act-gaa/496-general-appropriations-act-gaa-archives> last accessed July 27, 2021.
55SECTION 35. Special Budgets for Lump-Sum Appropriations. - Expenditures from lump-sum appropriations authorized for any purpose or for any department, office or agency in any annual General Appropriations Act or other Act and from any fund of the National Government, shall be made in accordance with a special budget to be approved by the President, which shall include but shall not be limited to the number of each kind of position, the designations, and the annual salary proposed for which an appropriation is intended. This provision shall be applicable to all revolving funds, receipts which are automatically made available for expenditure for certain specific purposes, aids and donations for carrying out certain activities, or deposits made to cover to cost of special services to be rendered to private parties. Unless otherwise expressly provided by law, when any Board, head of department, chief of bureau or office, or any other official, is authorized to appropriate, allot, distribute or spend any lump-sum appropriation or special, bond, trust, and other funds, such authority shall be subject to the provisions of this section.
In case of any lump-sum appropriation for salaries and wages of temporary and emergency laborers and employees, including contractual personnel, provided in any General Appropriation Act or other Acts, the expenditure of such appropriation shall be limited to the employment of persons paid by the month. by the day, or by the hour.
56 President's Veto Message, March 12, 2009, page 1259, R.A. No. 9524:
III. ITEMS FOR CONDITIONAL IMPLEMENTATION
I likewise observe several special and general provisions that should be covered by appropriate guidelines. While Congress may have a laudable intentions in espousing these provisions, it is nonetheless imperative to subject their implementation to certain conditions for consistency with existing policies. Accordingly, I hereby declare that the execution of the following provisions shall be subject to the issuance of guidelines by the appropriate agency of the Executive Department pursuant to Sections 1 and 17, Article VII of the 1987 Constitution.
x x x
E. USE OF INCOME
x x x
2. DOJ-LAND REGISTRATION AUTHORITY (LRA), Special Provision No. 1, "Use of Income", page 513.
The increase in the amounts provided under this special provision effectively allows the LRA to use income in excess of the amounts appropriated in its budget. Said increase should be subject to additional programming. Thus, the implementation of this special provision is subject to guidelines to be issued by the DBM. <https://www.dbm.gov.ph/wpcontent/uploads/GAA/GAA2009/Pveto/pveto.pdf> last accessed July 27, 2021.
57 See Concurring Opinion of Associate Justice Marvic Mario Victor F. Leonen in Belgica v. Ochoa, 721 Phil. 416, 655-705 (2013).
58 Id. at 692.
59 Glossary of Terms, <https://www.dbm.gov.ph/wp-content/uploads/BESF/BESF2013/Glossary.pdf> last accessed July 27, 2021.
60Rollo (G.R. No. 242082), p. 28.
61 Id. at 35.
62 G.R. No. 244128, September 8, 2020.
63 Id.
64 G.R. No. 244193, November 10, 2020.
65 Id.
66 See Torreta v. Commission on Audit, G.R. No. 242925, November 10, 2020.
67Tetangco, Jr. v. Commission on Audit, 810 Phil. 459, 467 (2017).
68 538 Phil. 634 (2006).
69Technical Education and Skills Development Authority v. Commission on Audit, 729 Phil. 60, 76 (2014).
70De Guzman v. Commission on Audit, G.R. No. 245274, October 13, 2020.
71Rollo (G.R. No. 242082), p. 99.
72Rollo (G.R. No. 242083), p. 13.
73 Id. at 10.
74 SECTION 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.
75Madera v. Commission on Audit, supra note 62.
76 See separate Concurring Opinion of Senior Associate Justice Estela M. Perlas-Bernabe in Madera v. Commission on Audit, supra note 62.
77Rollo (G.R. No. 242082), pp. 46-55.
78 G.R. No. 252198, April 27, 2021.
79 Section 16.3 of the 2009 Rules and Regulations on the Settlement of Accounts; approved on September 15, 2009.
PERLAS-BERNABE, J.:
WHEREFORE, premises considered, the Motion for Reconsideration of Gabay ng Land Registration Authority (LRA), Inc., represented by its President Mr. Ser John Pastrana, in behalf of the members of the employees' union, is hereby PARTLY GRANTED. Accordingly, Commission on Audit Decision No. 2015-004 dated January 28, 2015 and Notice of Disallowance No. 2011-001-151 (10) dated January 6, 2011 on the payment of Collective Negotiation Agreement Incentives to LRA officials and employees, in the total amount of P30,180,000.00, are AFFIRMED with MODIFICATION. The payees who received the disallowed incentives in good faith need not refund the same. However, the recommending, certifying, and approving officers named liable for the disallowance shall remain liable therefor.Particularly, petitioners insist that they should not be held civilly liable for the disallowance by reason of their good faith participation in the disallowed transaction as approving/certifying officers.5
xxxx4 (Emphases and underscoring supplied)
We note that the following matters were no longer raised in this Petition: (1) Corpuz's exemption from solidary liability; and (2) the recipients' absolution from liability. As such, the COA Resolution dated December 27, 2017 is considered final and immutable insofar as they are concerned. We further note that the SWD Board of Directors, who were not included in the original ND, but made liable in the COA Resolution dated December 27, 2017 and are yet to be included in a Supplemental ND, are not represented in the present Petition. Consequently, this resolution shall be limited to the disposition of the civil liabilities of the SWD approving and certifying officers.10 (Emphases and underscoring supplied)This approach to the civil liability of payee-recipients was definitively upheld and edified in the April 27, 2021 case of Securities and Exchange Commission v. Commission on Audit11 (SEC) which is now the controlling ruling on the matter. In SEC, the Court decided not to delve into the civil liability of payee-recipients for their improper receipt of counterpart contributions to the provident fund based on the recognition that they were already excused from liability by the COA, which absolution was not questioned before the Court:chanroblesvirtualawlibrary
[The COA-Proper] excused the SEC employees from refunding the amount they each received from the counterpart contribution of the SEC to the provident fund; but held the approving, certifying and authorizing officers solidarily liable for the total disallowance.Thus, in view of the latest shift in jurisprudence and considering that similar payee-recipients in this case had likewise been absolved at the COA level, the issue of the latter's civil liability should not anymore be touched upon by the Court. To do so would, as explained in Ancheta, would run contrary to the doctrine of immutability of judgments. Besides, it is doubtful that the Court could acquire certiorari jurisdiction over the issue of the payee-recipients' civil liability, much more subserve due process considerations, since when they were already absolved by the COA, they are not anymore parties at the Court's level.
x x x
xxx. We are confronted by the fact that the COA [Proper] had already absolved the SEC payees-recipients from civil liability. Their absolution has not been questioned in the present petition.12 (Emphases and underscoring supplied)
Section 16. DETERMINATION OF PERSONS RESPONSIBLE/LIABLEMeanwhile, the consequence of respecting the payee-recipients' absolution at the COA level is that the amounts respectively received by them should already be removed from the equation when determining the civil liability of the approving/certifying officers who are parties at the Court's level. In a sense, this is an application of the concept of the "net disallowed amount," which term was originally intended to refer to "the total disallowed amount minus the amounts excused to be returned by recipients"15 based on the exceptions found in Madera's Rules 2c and 2d16 but may as well apply to amounts excused to be returned by recipients on account of the COA's discretion not to anymore exact civil liability from certain parties.
x x x
16.3 The liability of persons determined to be liable under an ND/NC shall be solidary and the Commission may go against any person liable without prejudice to the latter's claim against the rest of the persons liable. (Emphasis supplied)
Yet, we apply Rule 2d of the Rules of Return on ground of undue prejudice and, per Abellanosa, "to prevent a clear inequity arising from a directive to return".On the contrary, if the approving/certifying officers who had likewise received disallowed amounts are not in good faith (or in other words, acted in bad faith, with malice, or are grossly negligent), then they cannot avail of the equitable exception under Rule 2d because equity should not be accorded to a party in bad faith or who is grossly negligent. They should thus be allowed to individually return the amounts they respectively received.
First. We are confronted by the fact that the COA En Banc had already absolved the SEC payees-recipients from civil liability. Their absolution has not been questioned in the present petition. Notably, the concerned SEC officers are also payees-recipients in their own right, hence, the absolution of civil liability by COA En Banc also applied to them. It would be highly iniquitous to let the SEC officers return the amounts they received while the rest of the SEC payees-recipients go scot free. xxx
x x x
True, it may be argued that the COA En Banc had already absolved all the payees-recipients, except the concerned SEC officers, and the only remaining point to be resolved is whether SEC officials should be held civilly liable. But, again, to order the SEC officers to return will result in an inequitable and unjust situation where the SEC officers, who are also payees-recipients, have a different civil liability while the rest of the payees-recipients are forgiven. To sanction such course of action would violate their right to equal protection.
x x x
Here, there is no substantial distinction to justify a different treatment of SEC officers, who are payees-recipients, from other payeesrecipients when it comes to individual civil liability. In fact, as payeesrecipients themselves, the SEC officers are within the same class as the SEC employees, for they all received a 15% counterpart contribution from the SEC that was sourced from its retained earnings. Verily, to hold the SEC officers individually and civilly liable amounts to undue prejudice, thus, they should be likewise exempted from such liability.
Second, it is erroneous, nay, unfair to conclude that only the SEC Officers benefited from the agency's unauthorized counterpart contributions to their provident fund accounts. For provident funds are set up in a way that all members will derive a set of benefits by reason of their membership - securing loans, grant of dividends, disability benefits, retirement benefits, and severance packages. Once the funds are put into the provident fund, they are already intermingled and become a trust fund for the benefit of all provident fund. In GERSIP Association, Inc. v. GSIS, the Court held that a provident fund is essentially an express trust.
In other words, all other provident fund members benefited from the SEC's contribution under the account of its officers, albeit indirectly. Thus, if we were to apply solutio indebiti as basis for liability, the SEC Officers should not bear the obligation to return alone; it should be shared by all provident fund members. As it was, however, these other members had already been absolved from liability. It would therefore be unfair to hold the SEC Officers liable to pay for the benefits which these other members indirectly received.
Finally, undue prejudice would also occur if the payees-recipients, including the concerned SEC officers, are made to foot an additional 15% contribution which ought to have been shouldered by the SEC itself. To repeat, payees-recipients contribute an equivalent of 3% of their monthly salary. To order them to answer for the 15% counterpart contribution of the SEC would, in effect, make their total contribution equivalent to 18% of their monthly salary. Under Section 43 of the General Provisions of GAA 2010, salary deductions for provident funds, among others, is allowed so long as an employee's total take home pay will not fall below Php3,000.00. By ordering payees-recipients to return, and in effect increasing their provident fund contributions to 18%, low-ranked employees may already have a take home pay of less than Php3,000.00.18chanRoblesvirtualLawlibrary
BOOK I - SOVEREIGNTY AND GENERAL ADMINISTRATIONThe fact that the civil liability of the remaining approving/certifying officers in bad faith or who are grossly negligent is solidary means that the COA can exact the full amount of the net disallowed amount from any of the approving/certifying officers, which in this situation, pertains to the total disallowed amount minus the amounts received by the payee-recipients absolved at the COA level. Again, the net disallowed amount would effectively be the amounts received by the erring approving/certifying officers as recipients themselves.
x x xCHAPTER 9
General Principles Governing Public Officers
x x x
Section 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
BOOK VI - NATIONAL GOVERNMENT BUDGETING
x x xCHAPTER 5
Budget Execution
x x x
Section 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.
x x x
Endnotes:
1 See ponencia, pp. 2-4.
2Rollo, pp. 46-55.
3 See ponencia, pp. 5-6.
4 Id. at 5.
5 See rollo, p. 9.
6 See G.R. No. 232199, December 1, 2020.
7 See G.R. No. 247228, March 2, 2021.
8 See G.R. No. 244128, September 8, 2020.
9 See G.R. No. 236725, February 2, 2021.
10 See id.
11 See G.R. No. 252198, April 27, 2021.
12 See id.
13 See Separate Opinion of Senior Associate Justice Estela M. Perlas-Bernabe in Madera v. COA.
14 Shall be known as "The 2009 Rules and Regulations on the Settlement of Accounts," approved on September 15, 2009.
15 See Separate Opinion of Senior Associate Justice Estela M. Perlas-Bernabe in Madera v. COA, supra note 8.
16 Which read:chanroblesvirtualawlibraryE. The Rules on Return17 See Madera v. COA, supra note 8.
x x x
2. If a Notice of Disallowance is upheld, the rules on return are as follows:
xxxx
c. 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. d. 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.
18 See Securities and Exchange Commission v. COA, supra note 11; citations omitted.cralawredlibrary