Singson v. Commission on Audit
REITERATIONFacts
The Antecedents: Petitioners, who were members of the Board of Directors and officials of the Bangko Sentral ng Pilipinas (BSP), received Representation and Transportation Allowance (RATA) from the Philippine International Convention Center, Inc. (PICCI), a government corporation whose sole stockholder is the BSP. This RATA was granted pursuant to Monetary Board (MB) Resolution No. 15 dated January 5, 1994, as amended by MB Resolution No. 34 dated January 12, 1994, in addition to their ₱1,000.00 per diem for each meeting attended. The total RATA received from January 1996 to December 1998 amounted to ₱1,565,000.00. Procedural History: The PICCI Corporate Auditor issued a Notice of Disallowance, disallowing the RATA payments on the grounds of double payment of RATA, violation of Section 8, Article IX-B of the Constitution, and violation of PICCI By-Laws and the Government Accounting and Auditing Manual. Petitioners sought reconsideration, which was denied. The Corporate Audit Office I affirmed the disallowance, stating that PICCI By-Laws prohibit compensation other than per diems and that the BSP board resolution granting RATA lacked procedural compliance. The Commission on Audit (COA) affirmed the disallowance, ruling that the RATA payment was not valid and violated NCC No. 67. The COA denied the motion for reconsideration. The Petition: Petitioners filed a petition for certiorari before the Supreme Court, assailing the COA's decision and resolution, arguing grave abuse of discretion in finding violations of by-laws, NCC No. 67, and in directing refund despite their good faith.
Issue(s)
Whether the respondent COA committed grave abuse of discretion in finding that the petitioners violated PICCI's By-Laws when Section 30 of the Corporation Code authorizes stockholders to grant compensation to directors. Whether the respondent COA committed grave abuse of discretion in finding that the payment of RATA to BSP officials who are members of the PICCI Board violated Item No. 4 of National Compensation Circular (NCC) No. 67, and whether such payment constitutes prohibited double compensation. Whether the respondent COA committed grave abuse of discretion in directing the Auditor to enforce refund of the payments to the petitioners who are directors, considering their presumption of good faith.
Ruling
The petition is DISMISSED. The Decision No. 2002-081 of the Commission on Audit and its Resolution No. 2003-115 are AFFIRMED WITH MODIFICATION. Petitioners need not refund the Representation and Transportation Allowance (RATA) they received.
Ratio Decidendi
On the issue of violation of PICCI By-Laws and Section 30 of the Corporation Code: The Court affirmed the COA's finding that the petitioners' right to compensation as members of the PICCI Board of Directors is limited to the per diem of ₱1,000.00 for every meeting attended, as stipulated in Section 8 of the PICCI By-Laws. This provision, in consonance with Section 30 of the Corporation Code, restricts compensation to per diems, unless otherwise provided by the by-laws or by a vote of the stockholders. The BSP Monetary Board Resolution, while potentially amending the by-laws, failed to comply with the procedural requirements under Section 48 of the Corporation Code. Therefore, the RATA granted was not valid compensation under the PICCI By-Laws. On the issue of violation of NCC No. 67 and double compensation: The Court clarified that NCC No. 67 prohibits the dual collection of RATA by a national official from the budgets of more than one national agency. In this case, the RATA from PICCI was not from another national agency, and the BSP Monetary Board Resolution was a valid corporate act. The Court held that the grant of ₱1,500.00 RATA to petitioners as PICCI Directors, in addition to their RATA from BSP and their ₱1,000.00 per diem, does not constitute double compensation prohibited by Section 8, Article IX-B of the Constitution. This is because RATA is an allowance to defray expenses, distinct from salary, and the constitutional proscription applies to additional, double, or indirect compensation unless specifically authorized by law, which was not the case here in terms of prohibited double compensation. On the issue of refund and good faith: The Court took into consideration the good faith of the petitioners. They acted under the honest belief that they were legally entitled to the RATA pursuant to the BSP Monetary Board Resolution. Citing previous rulings, the Court held that when parties act in good faith and have received benefits under the honest belief that they were due, refund should not be countenanced. Therefore, despite the disallowance of the RATA as a valid form of compensation under the PICCI By-Laws, the petitioners were not required to refund the amounts received from 1996 to 1998.
Main Doctrine
While directors' compensation is limited to per diems as provided by the PICCI By-Laws, the receipt of Representation and Transportation Allowance (RATA) by directors, even if they also receive RATA from their mother agencies, does not constitute double compensation prohibited by the Constitution, especially when granted in good faith pursuant to a Monetary Board Resolution.