Bureau of Fisheries and Aquatic Resources Employees Union v. Commission on Audit
REITERATIONFacts
1. The Antecedents: The Bureau of Fisheries and Aquatic Resources (BFAR) Employees Union, Regional Office No. VII, Cebu City, requested a P10,000.00 Food Basket Allowance for each of its 130 employees in 1999, citing the high cost of living and referencing the Employees Suggestions and Incentive Awards System (ESIAS). This request was endorsed by the Regional Director and recommended for approval by the Director of BFAR. The Undersecretary for Fisheries and Livestock of the Department of Agriculture approved the grant, totaling P1,322,682.00, which was subsequently released to the employees. 2. Procedural History: Following a post-audit, the Commission on Audit (COA) – Legal and Adjudication Office (LAO) Regional Office No. VII disallowed the Food Basket Allowance, citing lack of legal basis and violations of the General Appropriations Act of 1999, Budget Circular No. 16, and the Salary Standardization Law. BFAR Regional Office No. VII moved for reconsideration, arguing the allowance would enhance employee welfare and that the Undersecretary's approval constituted sufficient authority. The motion was denied. The BFAR Union then appealed to the COA LAO National, which upheld the disallowance in a Decision dated April 8, 2005. A subsequent motion for reconsideration was denied by COA Resolution dated August 5, 2005. 3. The Petition: The BFAR Employees Union filed an appeal with the Supreme Court, arguing that the disallowance was unconstitutional as it contravened the State's commitment to social justice. They also contended that the Undersecretary's approval was equivalent to Presidential authority and that the allowance conformed to Section 12 of the Salary Standardization Law. The Union further argued that the Food Basket Allowance was not among the allowances integrated into standardized salary rates and that it fell under an exception to the prohibition on incentive allowances. Finally, they asserted that the allowance was permissible under the Employee Suggestions and Incentive Award System. The petition also raised the issue of whether the disallowance was final and executory due to failure to exhaust administrative remedies.
Issue(s)
Whether the grant of the Food Basket Allowance is constitutional. Whether the approval of the Department of Agriculture Undersecretary for Fisheries and Livestock constitutes sufficient authority for the grant of the allowance. Whether the Food Basket Allowance is covered by Section 12 of R.A. No. 6758 (Salary Standardization Law) and whether it falls under National Compensation Circular No. 59 as an incentive allowance. Whether the petitioner exhausted all available administrative remedies.
Ruling
The petition is DENIED. The Decision and Resolution of the Commission on Audit – Legal and Adjudication Office dated April 8, 2005 and August 5, 2005, respectively, in LAO-N-2005-119, are AFFIRMED.
Ratio Decidendi
On the constitutionality of the grant: The Court reiterated that the social justice provisions of the Constitution are not self-executing and require legislative enactment to be given effect. They serve as guidelines for legislation rather than judicially enforceable rights. Therefore, invoking these provisions alone cannot justify the grant of an allowance that lacks legal basis. The Court cited Kilosbayan, Incorporated v. Morato to support the principle that constitutional policies are not judicially enforceable rights. On the authority of the Undersecretary: The Court found that the Department of Agriculture Undersecretary for Fisheries and Livestock had no authority to grant any allowance to BFAR employees. It emphasized that Budget Circular No. 16 explicitly prohibits the grant of food, rice, gift checks, or any other form of incentives/allowances, except those specifically authorized via Administrative Order by the Office of the President. Since no such Administrative Order was issued, the Undersecretary's approval was insufficient to legitimize the allowance. On the applicability of Section 12 of R.A. No. 6758 and National Compensation Circular No. 59: The Court clarified that Section 12 of the Salary Standardization Law consolidates all allowances into standardized salary rates, with specific exceptions. The Food Basket Allowance was not found to be in the nature of an allowance to defray or reimburse expenses incurred in the performance of official functions, nor was it among the enumerated exceptions. The Court distinguished it from allowances like representation and transportation allowance (RATA) or hazard pay. The Court also rejected the argument that it fell under the catch-all proviso for "other additional compensation not otherwise specified herein as may be determined by the DBM," as it was primarily economic assistance and not related to official duties. The Court determined that the Food Basket Allowance falls under the category of "incentive allowance/fee/pay" as defined in National Compensation Circular No. 59. It noted that the allowance was justified by the petitioner as an incentive to improve employee productivity. The exceptions to this prohibition, namely those authorized under the General Appropriations Act (GAA) and Section 33 of P.D. No. 807, were not met. There was no law authorizing the Food Basket Allowance, and it did not qualify as an incentive under the Employee Suggestions and Incentive Award System described in P.D. No. 807, which pertains to specific contributions and extraordinary acts, not general economic assistance. On the exhaustion of administrative remedies: The Court pointed out that the petitioner failed to exhaust its administrative remedies by not appealing the decision of the COA Legal and Adjudication Office to the Commission on Audit proper. According to Sections 48 and 51 of Presidential Decree No. 1445, failure to appeal renders the decision of the auditor or the Commission final and executory. This procedural lapse was a significant factor in affirming the disallowance.
Main Doctrine
The grant of a Food Basket Allowance to government employees without specific legal basis, administrative order from the Office of the President, or determination by the Department of Budget and Management as an exception to the Salary Standardization Law, is illegal and subject to disallowance by the Commission on Audit. Furthermore, failure to exhaust administrative remedies renders the disallowance final and executory.