Philippine Deposit Insurance Corporation v. Commission on Audit
NEW DOCTRINEFacts
The Antecedents: The Philippine Deposit Insurance Corporation (PDIC) sought condonation of an audit disallowance of P440,068.62 paid to former Finance Secretary Roberto de Ocampo, representing Business Policy Development and Enforcement Expenses (BPDEE) and Christmas gift checks for the years 1994-1996. The disallowance was based on the ground that it constituted additional compensation in violation of constitutional and statutory provisions against multiple positions. Procedural History: The disallowance was affirmed by the Commission on Audit (COA) in several decisions and resolutions. PDIC's appeal to the Supreme Court in G.R. No. 155317 was affirmed with finality. Despite a Final Order of Adjudication (FOA) issued for enforcement, PDIC condoned the amount of P413,866.62, invoking its power to condone under its charter. The COA referred the matter to the Office of the Solicitor General (OSG) for appropriate action against PDIC officials for non-compliance. PDIC sought reinstatement of its right to appeal, claiming it did not receive notice of the disallowance of the condonation and was deprived of its right to be heard. The Petition: PDIC filed a petition with the Supreme Court seeking to set aside COA Decision No. 2006-0051, which denied its request to permit the condonation of the audit disallowance, alleging grave abuse of discretion and violation of its right to due process.
Issue(s)
Whether the COA committed grave abuse of discretion when it disallowed the condonation of an audit disallowance. Whether PDIC was denied due process. Whether PDIC's authority to condone under its charter can be invoked to condone an audit disallowance already affirmed by the Supreme Court.
Ruling
The petition is DISMISSED. The COA did not commit grave abuse of discretion. PDIC was not denied due process. The audit disallowance affirmed by the Supreme Court cannot be condoned.
Ratio Decidendi
On whether the COA committed grave abuse of discretion when it disallowed the condonation of an audit disallowance: The Supreme Court held that there was no grave abuse of discretion. The disallowance of the amounts disbursed to former Finance Secretary Roberto De Ocampo had been affirmed by the Court with finality in G.R. No. 155317. As a final and executory judgment, it was immutable and unalterable, and only execution was left. PDIC's attempt to condone the disallowed amount, despite the finality of the Supreme Court's decision, was an attempt to circumvent the execution of the judgment. The Court emphasized the principle that what is prohibited directly is also prohibited indirectly (Quando aliquid prohibitur ex directo, prohibitur et per obliquum). Allowing condonation would be tantamount to sanctioning the indirect violation of the prohibition against double compensation and the final Supreme Court decision. On whether PDIC was denied due process: The Court found no denial of due process. Due process simply demands an opportunity to be heard, which PDIC was not denied. PDIC fully participated in the proceedings concerning the audit disallowance until it was upheld by the Supreme Court. Furthermore, PDIC was given an opportunity to defend the validity of its exercise of its authority to condone when it raised the issue in its letter to the COA dated January 31, 2005. The COA's resolution of this issue in the negative, after hearing PDIC, satisfied the requirements of due process. On whether PDIC's authority to condone under its charter can be invoked to condone an audit disallowance already affirmed by the Supreme Court: The Court ruled that PDIC's authority to condone, as provided in Section 8, paragraph 12 of its charter, does not extend to condoning an audit disallowance that has already been affirmed by the Supreme Court with finality. The Court clarified that PDIC's authority to condone applies only to ordinary receivables, penalties, and surcharges and must be submitted to the COA for review. Moreover, the authority is circumscribed by the phrase "to protect the interest of the Corporation," which does not include the power to condone a liability arising from a violation of law, much less the Constitution. To allow condonation in this case would be to allow an indirect violation of the constitutional prohibition against double compensation and the final judgment of the Supreme Court.
Main Doctrine
An audit disallowance that has been affirmed by the Supreme Court with finality can no longer be the subject of condonation, as doing so would be tantamount to sanctioning the indirect violation of the prohibition against double compensation and the final Supreme Court decision. The principle of res judicata bars further review of the validity of the disallowance.