Leycano v. Commission on Audit
REITERATIONFacts
The Antecedents: Petitioner Manuel Leycano, Jr., then Provincial Treasurer of Oriental Mindoro and a member of the Provincial School Board (PSB), was appointed to the PSB's Inspectorate Team tasked with monitoring PSB projects. In 1995, checks were issued to private contractors for repair, rehabilitation, and construction projects funded by the Special Education Fund (SEF). A Special Audit Team of the Commission on Audit (COA) audited these projects and issued Notices of Disallowance, holding petitioner and others liable for signing Certificates of Inspection, falsely attesting to 100% completion of projects that were found to be incomplete or inexistent. Procedural History: Petitioner appealed the Notices of Disallowance to the COA, arguing he should be excluded from liability. The Regional Director initially modified the findings, excluding petitioner based on subsequent corrections by contractors. However, a re-inspection by a Technical Audit Specialist still found deficiencies totaling ₱1,039,339.57. The COA, by Decision No. 2002-129, denied petitioner's appeal, finding no sufficient justification to exclude him from liability, though it reduced the disallowance amount. The Petition: Petitioner challenges the COA's decision through a Petition for Certiorari, alleging that the COA committed reversible error in the interpretation/application of law and acted with grave abuse of discretion in appreciating the facts and evidence.
Issue(s)
Whether the COA committed reversible error in the interpretation/application of the law and acted with grave abuse of discretion amounting to excess of jurisdiction in the appreciation of the facts and evidence presented. Whether petitioner, as a member of the PSB Inspectorate Team, can be held liable for the disallowed expenditures despite not being an "accountable officer" by nature of his duties. Whether the doctrine in Arias v. Sandiganbayan is applicable to petitioner's situation. Whether the COA erred in issuing the Notices of Disallowance without first issuing a Certificate of Settlement and Balances (CSB) and a Notice of Suspension.
Ruling
The petition is DISMISSED. The COA Decision No. 2002-129 dated July 18, 2002, is affirmed.
Ratio Decidendi
On the alleged error of the COA: The Court did not explicitly address this issue in the provided text. However, the subsequent rulings implicitly address the COA's actions, finding no reversible error or grave abuse of discretion. On the liability of petitioner as a member of the Inspectorate Team: The Court held that while petitioner was not an "accountable officer" as defined in Section 101 of P.D. No. 1445, he could still be held liable by the COA under its broad constitutional mandate to audit all government accounts and expenditures. Furthermore, Section 340 of the Local Government Code (LGC) explicitly states that officers who are not accountable by nature of their duties may be held similarly accountable through their participation in the use or application of local government funds. Since the Inspectorate Team's inspection was a necessary precursor to payment, signing the Certificate of Inspection meant participating in the use of funds. Petitioner's attestation to 100% completion despite deficiencies constituted an irregularity, making him liable for the resulting loss to the government. On the applicability of the Arias v. Sandiganbayan doctrine: The Court ruled that the Arias doctrine, which allows heads of offices to rely on subordinates in certain circumstances, is not applicable to petitioner. Firstly, petitioner was acting in his capacity as a member of the Inspectorate Team, not as Provincial Treasurer, and the inspection function is not part of a treasurer's enumerated duties under Section 470 of the LGC. Therefore, he was not acting as a "head of office" in this context. Secondly, exceptional circumstances existed that should have alerted petitioner. The fact that Acceptance Reports from DECS officials were issued prior to the Inspectorate Team's assessment and certification indicated an anomaly, which should have prompted him to exercise greater circumspection before signing the Certificate of Inspection, thus barring the application of the Arias doctrine. On the procedural requirements for disallowance: Petitioner's contention that the COA erred by not issuing a Certificate of Settlement and Balances (CSB) and a Notice of Suspension prior to the Notices of Disallowance was dismissed. The Court explained that the CSB is a summary of audit findings and its absence did not prejudice petitioner, who was duly notified by the Notices of Disallowance. A Notice of Suspension is for deferring action pending compliance with requirements, which was not applicable here as petitioner was held liable for his positive act of certifying incomplete projects, not for non-compliance or deficiency in documentation. The disallowance was based on the actual certification of incomplete projects.
Main Doctrine
Members of an Inspectorate Team, even if not strictly 'accountable officers' by nature of their duties, may be held liable by the Commission on Audit (COA) for irregular expenditures of government funds if their participation in such irregularity can be established, particularly when they attest to the completion of projects without proper inspection, thereby participating in the use or application of funds.