gr_209712_2021

INTING, J.:

This resolves the Petition for Certiorari1 under Rule 64 in relation to Rule 65 of the Rules of Court assailing the Commission on Audit (COA) Commission Proper (COA Proper) Decision2 dated November 15, 2010 (Original COA Proper Decision) and the Resolution3 dated September 27, 2013. The assailed issuances upheld Notice of Disallowance (ND) No. BMHI-04-002-(03)4 dated November 4, 2004 and Supplemental ND No. BMHI-2008-0085 dated March 26, 2008 which disallowed the Annual Gift Checks (AGCs)6 paid by Bases Conversion and Development Authority (BCDA) Management and Holdings, Inc. (BMHI) amounting to P2,158,000.00 and P754,000.00,7 respectively, and held the payees, certifying and approving officers, liable therefore. The Antecedents BCDA was created pursuant to Republic Act No. 72278 to act as the lead instrumentality tasked to facilitate the conversion of the Clark and Subic military reservations and extensions into alternative productive uses.9 Herein petitioners10 are employees of BMHI, a subsidiary of BCDA.11 On September 18, 2003, the BCDA Board of Directors (Board) approved Resolution No. 2003-09-186 authorizing the payment of 2003 AGCs.12 The Guidelines on the Grant of the AGCs13 provide as follows: 1.

COVERAGE 1.1 Annual gift checks shall be granted to all BCDA regular plantilla personnel and contractual officers and employees including the members of the Board, office-based consultants and those on detail from other government agencies rendering full time service to BCDA and who are in the service as of 30 September 2003. 1.2 The gift check shall be equivalent to at least P35,000.00 net of tax. 1.3 x x x 1.4 For this purpose, services rendered continuously by employees of BMHI, the BCDA Manpower Services provider, office-based consultants performing BCDA functions who were subsequently hired by BCDA prior to 30 September 2003 are considered actual service in BCDA.14 (Italics supplied.) On the strength of their parent company's Board Resolution No. 2003-09-186 and guidelines, BMHI management released the AGCs to its employees and the members of the Board, through Disbursement Voucher (DV) Nos. 2003-09-13015 and 2003-09-13116 dated September 23, 2003, amounting to P2,569,000.00 and P343,000.00, respectively.

The payment was approved by Isaac S. Puno III (Puno), BMHI President. It was also certified by Rowena B. Tanagon (Tanagon), Department/Unit Head, and Glorificacion M. Nocos (Nocos), Accounting Department Head, as follows: (a) that the "expenses/advances [are] necessary, lawful and incurred under [her] direct supervision" and (b) that "supporting documents [are] complete and proper, and cash [is] available,"

respectively.17 On March 31, 2004, the COA, relative to the payment of AGCs through Corazon V. Españo, Audit Team Supervisor, issued Audit Observation Memorandum No. (AOM) 2004-0518 addressed to Puno. According to the COA, the Department of Budget and Management (DBM) prescribes that year-end and other fringe benefits, such as the AGCs, are personnel benefits granted in addition to salaries, or paid only when basic salary is also paid.

The members of the BMHI Board are not entitled to these benefits because they are not salaried government officials.19 In this regard, the COA requested Puno/BMHI to explain why the subject payment to non-salaried personnel should not be disallowed in audit.20 Thereafter, the COA evaluated the matters raised in the AOM, together with relevant supporting documents. Consequently, the COA Legal and Adjudication Office-Corporate (LAO-C), through Rogelio D. Tablang, Director IV, issued ND No. BMHI-04-002-(03)21 dated November 4, 2004 disallowing the P2,158,000.00 of the total P2,912,000.00 paid for AGCs, computed as follows: