Juan v. Commission On Audit

ROSARIO, J.:

At bench are four (4) Petitions for Certiorari1 assailing the Decision No. 2015-3872 and Resolution No. 2017-4523 of the respondent Commission on Audit (COA). The antecedents: ERC Educational Allowance and the Notice of Disallowance The Energy Regulatory Commission (ERC) is a government regulatory agency created under Republic Act (RA) No. 9136. Under Section 39 of RA No. 9136,4 the compensation and other emoluments for ERC officials and personnel were exempted from the coverage of RA No. 6758 or the Salary Standardization Act.

In 2010, the ERC granted educational allowance at the rate of P35,000.00 per personnel or P7,433,834.00 in total. The ERC released the allowance in three (3) tranches, to wit: 1. First tranche - released in February 2010 at P5,000.00 per personnel.5 2.

Second tranche - released in March 2010 at P5,000.00 per personnel.6 3. Third tranche - released in May 2010 at P25,000.00 per personnel.7 The above educational allowance was granted on top of the Collective Negotiation Agreement (CNA) incentive given to each ERC personnel in the amount of P35,000.00 per individual. On post audit, however, the grant of educational allowance was disallowed.

On August 3, 2011, the COA audit team leader and supervising auditor in the ERC issued Notice of Disallowance (ND) No. 2011-002-101-(10)8 against the P7,433,834.00 grant on the ground of lack of legal basis. In particular, the ND faulted the grant of educational allowance for the following: 1. Violation of Section 17 (Restriction on the Use of Government Funds), General Provisions, of the General Appropriations Act of CY 2010 which states that no government funds shall be utilized to, among others, pay for honoraria and other allowances except those authorized by law; 2.

Violation of item (9) of the Joint Resolution No. 4, s. 2009 of the Senate and House of Representative, approved by President Macapagal-Arroyo on 17 June 2009, to wit: "(9) Exempt Entities - x x x That any increase in the existing salary rates as well as the grant of new allowances, benefits, and incentives, or increase in the rates thereof shall be subject to the approval of the President, upon recommendation of the DBM x x x." 3.

No legal basis or Presidential authorizations on the grant of the allowances per letter-reply dated July 11, 2011 of Director Myrna S. Chua, Organization, Position Classification and Compensation Bureau, Department of Budget and Management, to the letter dated May 23, 2011 of the undersigned.9 As for the persons liable for the disallowed amount, the ND implicated 15 ERC officials and employees who supposedly either approved or made certifications that were necessary for the release of the educational allowance.10 These officials and employees are:11 Name Position 1 Zenaida G. Cruz-Ducut ERC Chairperson 2 Zenaida V. Fortuna Officer-in-Charge (OIC) of Finance Division 3 Ellen C.

Ebcas OIC of Finance and Administrative Service (FAS) 4 Luzviminda Cabalbag Finance and Management Officer II 5 Ana Maria T. Jaramillo Budget Officer III 6 Francis Saturnino C. Juan Executive Director III 7 Isabelo Joseph P. Tomas II OIC of Office of the General Counsel and Secretariat (OGCS) 8 Mariano D. Garcia Attorney IV 9 Noel J. Salvanera Director III of Legal Service (LS) 10 Sharon O. Montañer Planning Officer V 11 Josefina N. Buensuceso Information Officer V 12 Francisco Jose S. Villa Director III of Planning Information Services (PIS) 13 Floresinda G. Baldo-Digal12 OIC of Regulatory Operations Service (ROS) 14 Debora Anastacia T. Layugan Director III of Market Operations Service (MOS) 15 Maria Corazon C. Gines Director III of Consumer Affairs Service (CAS) Appeals The ERC officials implicated in the ND appealed the ND before the COA National Government Sector - Cluster A (COA-NGS).

They contended that the ERC's grant of educational allowance was legal and justified under Memorandum Circular (MC) No. 174, s. of 2009 of former President Gloria Macapagal-Arroyo. The COA-NGS, however, denied this appeal in its Decision No. 2012-01313 dated September 28, 2012.

The ERC officials then appealed the COA-NGS Decision with the COA proper. On December 21, 2015, the COA rendered Decision No. 2015-38714 denying the appeal of the ERC officials for being filed out of time. Undeterred, the ERC officials filed a motion for reconsideration.

On December 27, 2017, the COA issued Resolution No. 2017-45215 partially granting the motion for reconsideration. In the said resolution, the COA conceded that it committed a mistake in denying the appeal of the ERC officials for not being filed on time.16 After a re-appraisal of the material dates, the COA concluded that the appeal of the ERC officials from the Decision of COA-NGS was indeed filed with the commission proper within the reglementary period.17 Ultimately, however, the COA still affirmed the Decision of the COA-NGS as the former found the disallowance of ERC's educational allowance to be meritorious just the same. Anent the liability for the disallowed amount, on the other hand, the COA ruled that only the ERC officers implicated in the ND- i.e., the officials who approved, authorized or certified the payment of the educational allowance-shall be solidarily liable therefor.18 The COA absolved all ERC personnel who are mere passive recipients of the allowance in deference to the ruling in Silang v. Commission on Audit.19 The dispositive portion of the COA resolution accordingly reads: WHEREFORE , premises considered, the Motion for Reconsideration is PARTIALLY GRANTED insofar as the Petition for Review is ruled to have been timely filed.

However, [COA-NGS] Decision No. 2012-013 dated September 28, 2012, sustaining [ND No. 2011-002-101-(10)] dated August 3, 2011, on the grant of Educational Allowance, in the amount of [P]7,433,834.00, is AFFIRMED. The employees who were mere passive recipients of the benefits are exempted from refunding the disallowed amount, but the officers who approved/authorized/ certified the payment shall be solidarily liable therefor. x x x x Hence, the current four (4) petitions filed by nine (9) out of the fifteen (15) ERC officers implicated in the ND.

These petitions were docketed as follows: 1. G.R. No. 237835 - Petition filed by Francis Saturnino C. Juan, Isabelo Joseph P. Tomas II, Noel J. Salvanera, Sharon O. Montaner, Floresinda G. Baldo-Digal and Maria Corazon C. Gines (collectively, Juan et al.) 2. G.R. No. 237860 - Petition filed by Ellen C. Ebcas (Ebcas) 3.

G.R. No. 237883 - Petition filed by Luzviminda N. Cabalbag (Cabalbag) 4. G.R. No. 237884 - Petition filed by Mariano D. Garcia (Garcia) As of the writing of this Decision, no certiorari petition assailing the COA resolutions had been filed before this Court by Zenaida G. Cruz-Ducut, Zenaida Fortuna, Ana Maria T. Jaramillo, Josefina N. Buensuceso, Debora Anastacia T.

Layugan and Francisco Jose S. Villa (collectively, Cruz-Ducut et al.). The Petitions In essence, the petitions raise two issues:20 First. The three petitions21 argue that the COA committed grave abuse of discretion in sustaining ND No. 2011-002-101-(10).

They posit that the ERC's grant of educational allowance had legal basis in MC No. 174 of former President Macapagal-Arroyo which specifically enjoined all government agencies to provide to their employees, among other benefits, "scholarship programs for their children with siblings." Second. On the assumption that the disallowance of the educational allowance is proper, however, all four petitions contend that the COA still committed grave abuse of discretion when it held all ERC officers implicated in the ND solidarily liable therefor as approving or certifying officers.

Juan et al., Ebcas, Cabalbag and Garcia all ask that they be excluded from such liability in view of their supposed limited participation in the release of the educational allowance, viz : 1. Juan et al., as well as Garcia, were implicated in the ND for signing the payrolls of their respective offices:22 Name Document Nature of Participation Francis Saturnino C. Juan Payrolls under 1st, 2nd and 3rd tranches (Check Nos. 1067276, 1090176 and 1090631) (1) Approved payroll of FAS, LS, PIS, ROS, MOS CAS, Cebu and Davao; (2) Certified payroll of OCCC and IED as correct Isabelo Joseph P. Tomas II Payroll under 2nd tranche (Check No. 1090716) Certified payroll of OGCS, OEO and IA as correct Noel J. Salvanera Payrolls under 1st, 2nd and 3rd tranches (Check Nos. 1067276, 1090176 and 1090631) Certified payroll of LS as correct Sharon O. Montañer Payroll under 1st tranche (Check No. 1067276) Certified payroll of LS as correct Floresinda G. Baldo-Digal Payrolls under 1st, 2nd and 3rd tranches (Check Nos. 1067276, 1090176 and 1090631) Certified payroll of ROS as correct Maria Corazon C. Gines Payrolls under 1st, 2nd and 3rd tranches (Check Nos. 1067276, as correct 1090176 and 1090631) Certified payroll of CAS as correct Mariano D. Garcia Payroll under 3rd tranche (Check No. 1090631) Certified payroll of OGCS, OEO and IA as correct Juan et al. and Garcia argue that they cannot be held liable as approving and certifying officers because, in signing the payrolls, they merely certified to the correctness of the list of employees for their respective offices as appearing in the payrolls.23 As such, they claim that they had nothing to do with approving or certifying the legality of the disallowed educational allowance.

To further distance himself from the disallowed allowance, Garcia also points out that he signed the payroll attributed to him merely as a substitute for the real authorized signatory thereof-Isabelo Joseph P. Tomas II (Tomas), the OIC of ERC-OGCS. Garcia claims that Tomas was indisposed and not present at the time the subject payroll was routed to their office.24 2. Ebcas, on the other hand, was implicated in the ND for signing the following documents related to the release of the second and third tranches of the educational allowance: Document Nature of Participation Obligation Request under 2nd tranche (Check No. 1090716) (1) Certified charges to appropriation/allotment as necessary, lawful and under her direct supervision; (2) Certified supporting documents as valid, proper and legal Payroll under 2nd tranche (Check No. 1090716) Certified payroll of FAS, Cebu and Davao as correct Disbursement Voucher under 2nd tranche (Check Nos. 109019-80) (1) Approved the payment, (2) certified charges to appropriation/allotment as necessary, lawful and under her direct supervision, (3) Certified supporting documents as valid, proper and legal Obligation Request under 3rd tranche (Check No. 1090631) (1) Certified charges to appropriation/allotment as necessary, lawful and under her direct supervision; (2) Certified supporting documents as valid, proper and legal Payroll under 3rd tranche (Check No.

1090631) Certified payroll of FAS, Cebu and Davao as correct Obligation Request under 3rd tranche (Check Nos. 1090664-65) (1) Certified charges to appropriation/allotment as necessary, lawful and under her direct supervision; (2) Certified supporting documents as valid, proper and legal Ebcas calls attention to the fact that she had absolutely no participation in the release of the first tranche of the educational allowance. She argues that since her participation only came after the first tranche of the educational allowance was released, she cannot properly be considered as an officer that "approved" the said allowance.25 3.

Lastly, Cabalbag was implicated in the ND for signing the following documents related to the release of the first and third tranches of the educational allowance: Document Nature of Participation Obligation Request under 1st tranche (Check No. 1067276) (1) Certified charges to appropriation/allotment as necessary, lawful and under her direct supervision; (2) Certified supporting documents as valid, proper and legal Payroll under 1st tranche (Check No. 1067276) Certified payroll of FAS, Cebu and Davao as correct Disbursement Voucher under 1st tranche (Check Nos. 1067278-79) (1) Approved the payment, (2) certified charges to appropriation/allotment as necessary, lawful and under her direct supervision, (3) Certified supporting documents as valid, proper and legal Disbursement Voucher under 3rd tranche (Check Nos. 1090664-65) Approved the payment Cabalbag asks for absolution on the ground that she was a mere subordinate who merely acted on behalf of her superior.

She claimed that she only signed the documents related to the release of the first and third tranches of the educational allowance on behalf of or upon the instruction of her superior Ebcas who, through the latter's secretary, told her to sign the said documents in view of Ebcas' absence. Cabalbag professes that it was Ebcas-the OIC of ERC-FAS-who was supposedly the real authorized signatory of the documents that she signed.26 OUR RULING We grant the petitions in part. I The ERC's grant of educational allowance was properly disallowed for lack of legal basis.

Hence, we affirm COA Resolution No. 2017-452 insofar as it upheld ND No. 2011-002-101-(10). A. MC No. 174 Does Not Authorize the Grant of Educational Allowance Contrary to petitioner's submission, the educational allowance granted by the ERC cannot be justified as a scholarship program under MC No. 174. The full text of the circular reads: MEMORANDUM CIRCULAR NO.

174 ENJOINING ALL GOVERNMENT AGENCIES, INCLUDING GOVERNMENT OWNED AND CONTROLLED CORPORATIONS, STATE UNIVERSITIES AND COLLEGES TO SUPPORT THE PHILIPPINE GOVERNMENT EMPLOYEES ASSOCIATION'S PUBLIC SECTOR AGENDA WHEREAS, the Government recognizes the important role of government employees in nation building. WHEREAS, it is necessary that the needs of government employees, especially in the face of the present global economic crisis, be addressed in a manner that will improve and promote their social and economic welfare. In view thereof, all government agencies, including Government Owned and Controlled Corporations, State Universities and Colleges are hereby enjoined to provide the following to their employees: shuttle service financial subsidy and other heeded support to make the Botika ng Bayan more accessible to them