De Jesus v. Commission on Audit
REITERATIONFacts
The Antecedents: For years, officials and employees of the Local Water Utilities Administration (LWUA) received a rice subsidy, initially P200.00 bi-monthly and later increased to P350.00 monthly. This benefit continued even after the effectivity of Republic Act No. 6758 (Salary Standardization Law), with the LWUA Board of Trustees further increasing the subsidy to P600.00 per month in 1991. The LWUA Corporate Auditor, however, disallowed payrolls for these rice allowances disbursed between 1991 and 1994, citing provisions of R.A. No. 6758 and its implementing rules, as well as prior administrative issuances. Procedural History: The disallowances by the LWUA Corporate Auditor were appealed to the Commission on Audit (COA). Petitioners in G.R. No. 127515, LWUA officials, appealed the disallowance of P4,160,400.00 for 1993 and P1,647,400.00 for January to April 1994. Petitioner in G.R. No. 127544, the LWUA Administrator, appealed the disallowance of P2,059,700.00 for 1991 to 1992. The COA, in its Decision No. 96-650 dated November 21, 1996, sustained the disallowances, ruling that DBM Corporate Compensation Circular No. 10 (DBM-CCC No. 10) was the basis for the disallowance and that LWUA failed to submit required documentation for the transition allowance. The two petitions were consolidated before the Supreme Court. The Petition: Two separate petitions for certiorari and review on certiorari were filed with the Supreme Court, both assailing COA Decision No. 96-650. The core arguments of the petitioners center on the ineffectiveness of DBM-CCC No. 10 due to lack of publication in the Official Gazette, as previously declared by the Supreme Court in De Jesus v. Commission on Audit. Petitioners contend that Section 12 of R.A. No. 6758, which allows the continuation of allowances received by incumbents as of July 1, 1989, not integrated into standardized rates, should govern. They argue that the rice subsidy falls under this provision and that the COA erred in relying on an unpublished circular and in disregarding the principle of non-diminution of pay. The Office of the Solicitor General, in its manifestation, supported the petitioners' position, asserting that DBM-CCC No. 10 was superseded by R.A. No. 6758 and was ineffective due to non-publication.
Issue(s)
Whether DBM Corporate Compensation Circular No. 10 (DBM-CCC No. 10) is valid and enforceable. Whether the rice allowances granted to LWUA officials and employees are authorized under Republic Act No. 6758 (R.A. No. 6758). Whether the disallowance of the rice allowances by the Commission on Audit (COA) is proper.
Ruling
The petitions are GRANTED. The assailed COA Decision No. 96-650 is SET ASIDE.
Ratio Decidendi
On the validity and enforceability of DBM-CCC No. 10: The Court reiterated its ruling in De Jesus v. COA, holding that DBM-CCC No. 10 is ineffective for failure to comply with the publication requirement in the Official Gazette or a newspaper of general circulation. The Court emphasized that administrative circulars intended to enforce or implement existing laws, especially those that tend to deprive government workers of allowances, must undergo the requisite publication to be effective and enforceable. Without such publication, the circular cannot be considered a valid basis for disallowing disbursements. On the authorization of rice allowances under R.A. No. 6758: The Court found that the second sentence of Section 12 of R.A. No. 6758 expressly authorizes the continued grant of additional compensation, whether in cash or in kind, being received by incumbents as of July 1, 1989, which has not been integrated into the standardized salary rates. The rice subsidy in question was received by LWUA officials and employees as of July 1, 1989, and was not integrated into the standardized salary rates. Therefore, its continuous grant is protected under the principle of non-diminution of pay. On the propriety of the disallowance by the COA: The Court ruled that the COA erred in disallowing the rice allowances. The disallowance was primarily based on DBM-CCC No. 10, which was declared ineffective. Furthermore, the COA's reliance on Memorandum Order No. 177 (M.O. No. 177) and its implementing rule, DBM-CBC No. 15, was misplaced. The Court clarified that Section 2 of M.O. No. 177 did not require DBM, Office of the President, or legislative authorization for allowances authorized solely by governing boards. Moreover, the procedural requirements under DBM-CBC No. 15 were rendered moot by the effectivity of R.A. No. 6758, as the disallowances occurred after R.A. No. 6758 was already in effect. The only requirements for the continuous grant of allowances under Section 12 of R.A. No. 6758 are incumbency as of July 1, 1989, and non-integration into standardized salary rates.
Main Doctrine
The disallowance of rice allowances granted to incumbents of the Local Water Utilities Administration (LWUA) as of July 1, 1989, which were not integrated into the standardized salary rates, is set aside. The grant of such allowances is authorized under the second sentence of Section 12 of Republic Act No. 6758, provided the employee is an incumbent as of July 1, 1989, and the allowance was not consolidated into the standardized salary rates. Furthermore, DBM Corporate Compensation Circular No. 10 (DBM-CCC No. 10) is declared ineffective due to lack of publication.