Bases Conversion Development Authority v. Commission on Audit
NEW DOCTRINEFacts
The Antecedents: The Bases Conversion Development Authority (BCDA), a government corporation created by R.A. 7227, was tasked with managing and converting military reservations into productive uses. Its Board of Directors was empowered to adopt a compensation and benefit scheme at least equivalent to that of the Central Bank of the Philippines (CB). Pursuant to this, the BCDA Board granted several benefits to its officers and employees: Loyalty Service Award for 1995, Children's Allowance, Anniversary Bonus for 1995, and an 8th step salary increment effective January 1995. These were funded from the BCDA's operating budget. Procedural History: State Auditor Nida M. Blanco of the Commission on Audit (COA) disallowed these benefits, deeming them excessive and/or illegal and not in accordance with the CB benefit package. The BCDA's motion for reconsideration was denied. The BCDA appealed to the COA Proper. Subsequently, the President approved a request for post-facto ratification of these benefits. In COA Decision No. 99-057, the disallowance of the Anniversary Bonus was lifted due to presidential approval, but the disallowance of the Loyalty Service Award, Children's Allowance, and 8th step salary increment was affirmed. The BCDA's motion for partial reconsideration was denied. The Petition: The BCDA filed a petition for certiorari with the Supreme Court, seeking to set aside the COA decisions for grave abuse of discretion.
Issue(s)
Whether the COA committed grave abuse of discretion in disallowing the Loyalty Service Award. Whether the COA committed grave abuse of discretion in disallowing the 8th step salary increment. Whether the COA committed grave abuse of discretion in disallowing the Children's Allowance.
Ruling
The petition is partly granted. The assailed COA Decision No. 99-057 and Resolution No. 2000-89 are modified in that the disapproval of the Children's Allowance is set aside.
Ratio Decidendi
On the Loyalty Service Award: The disallowance of the Loyalty Service Award by the COA was upheld. The Court found that the award was given to employees who had not yet rendered the required minimum of ten (10) years in government service. The grant of Loyalty Awards in government service is governed by Civil Service Commission Memorandum Circular No. 42, which mandates a minimum of ten (10) years of service before such an award can be given, with specific amounts per year thereafter. The BCDA's argument that it was merely augmenting salaries was insufficient to override the specific CSC circular. On the 8th step salary increment: The disallowance of the 8th step increment was affirmed. The Court agreed with the COA and the Department of Budget and Management (DBM) that the grant of an 8th step increment had no legal basis. DBM Circular Letter No. 7-96 dated March 4, 1996, only allowed step increments for those under Salary Grade (SG) 30-32 based on length of service. Furthermore, the BCDA's salary rates followed existing DBM classification standards and authorized salary rates for other government-owned and controlled corporations and government financial institutions, and there were no records indicating an 8th step for compensation determination. On the Children's Allowance: The disallowance of the Children's Allowance was set aside. While the BCDA granted P100.00 per child, which exceeded the CB benefit package by P70.00, the Court found this not to be excessive considering present economic actualities. The BCDA Charter allows for a compensation and benefit package higher than that of the CB, provided it is reasonable. The Court acknowledged the plea that the allowance, though perhaps not enough, would at least lighten the financial burden of employees, thus finding no cogent reason to consider it excessive or without factual or legal support.
Main Doctrine
While the Bases Conversion Development Authority (BCDA) Board has the power to grant compensation and benefits at least equivalent to that of the Central Bank of the Philippines, such grants must be reasonable and not contrary to existing DBM policies, rules, and regulations. The disallowance of Children's Allowance was set aside as it was deemed not excessive considering present economic actualities.