Silang v. Commission on Audit
REITERATIONFacts
The Antecedents: The Local Government Unit (LGU) of Tayabas, Quezon, entered into Collective Negotiation Agreements (CNAs) with the Unyon ng mga Kawani ng Pamahalaang Lokal ng Tayabas (UNGKAT), an employees' organization. Subsequently, the local Sanggunian passed ordinances appropriating funds for the payment of CNA Incentives for the years 2008 and 2009. These incentives were to be paid to the rank-and-file employees of the LGU. Procedural History: The Office of the Auditor initially issued Notices of Suspension for the 2008 CNA Incentive due to non-registration of the CNA with the Civil Service Commission (CSC) and absence of cost-cutting measures. Despite submissions to address these concerns, a Notice of Disallowance (ND) was issued for the 2008 CNA Incentive. Similarly, a ND was issued for the 2009 CNA Incentive due to similar infirmities, including UNGKAT's lack of accreditation at the time of the CNA's execution. The LGU appealed these disallowances to the COA Regional Director, who denied the appeal and sustained the NDs. The LGU then elevated the case to the COA En Banc, which affirmed the Regional Director's decision. A motion for reconsideration was denied, leading to the present petition. The Petition: The petitioners, including the LGU of Tayabas and its officials, filed a petition for certiorari under Rule 64 in relation to Rule 65 of the Rules of Court. They assail the COA En Banc's decision and resolution, arguing that the COA committed grave abuse of discretion. The core issues raised are whether the disallowance of the 2008 and 2009 CNA Incentives was proper given UNGKAT's accreditation status, whether the savings for the incentives should be reckoned from the signing date of the CNAs, and whether good faith should have been considered for the approving officers and recipients. The petitioners seek to have the disallowances overturned and to be absolved from refunding the disallowed amounts.
Issue(s)
Whether the COA En Banc committed grave abuse of discretion in affirming the disallowance of the 2008 and 2009 CNA Incentives on the ground that UNGKAT was not accredited with the CSC. Whether the COA En Banc erred in ruling that the LGU of Tayabas, Quezon's savings, to be considered as CNA Incentives, shall be reckoned from the date of signing of the CNAs. Whether the COA En Banc failed to consider good faith on the part of the management and the union in the granting of the 2008 and 2009 CNA Incentives.
Ruling
The petition is partly meritorious. The Supreme Court affirmed the disallowance of the 2008 and 2009 CNA Incentives but modified the ruling on the refund. Rank-and-file employees who received the disallowed incentives in good faith are not required to refund. However, the City Mayor, local Sanggunian members, UNGKAT officers, and members of UNGKAT's Board of Directors who participated in the negotiations are solidarity liable to refund the disallowed amounts.
Ratio Decidendi
On the issue of UNGKAT's accreditation: The Court affirmed the COA's disallowance of the 2008 and 2009 CNA Incentives. Item No. 5.1 of DBM Budget Circular No. 2006-01 explicitly requires that the employees' organization must be accredited by the CSC as the sole and exclusive negotiating agent for the purpose of collective negotiations. The records clearly showed that UNGKAT lacked this accreditation at the time the CNAs were executed on November 13, 2007, and February 4, 2008. UNGKAT was only accredited on January 14, 2009. Therefore, the CNA Incentives granted under these circumstances were invalid. On the reckoning of savings: The Court upheld the COA's ruling that savings for CNA Incentives must be reckoned from the date of signing of the CNA. Item No. 7.1.2 of DBM Budget Circular No. 2006-01 mandates that savings shall be reckoned from the date of signing of the CNA and its supplements. In this case, the MOOE savings for the 2008 CNA Incentive were computed from September 2007, which was two months prior to the first CNA's signing on November 13, 2007. This violated the said DBM circular, rendering the source of funds for the incentive invalid. On the issue of good faith: The Court found the petitioners' contention on good faith partly meritorious. As a general rule, public officials directly responsible for illegal expenditures are personally liable. However, passive recipients of disallowed benefits who received them in good faith are not required to refund. The Court ruled that the rank-and-file employees, who were mere passive recipients and had no knowledge of the irregularities, acted in good faith and need not refund. Conversely, the UNGKAT officers and Board of Directors, who participated in the negotiations despite knowing UNGKAT's lack of accreditation, and the City Mayor and Sanggunian members, who are presumed to know the requirements for valid CNA incentives, were found not to have acted in good faith. They were deemed solidarity liable for the refund.
Main Doctrine
The grant of Collective Negotiation Agreement (CNA) Incentives requires prior accreditation of the employees' organization by the Civil Service Commission (CSC) as the sole and exclusive negotiating agent, and savings for such incentives must be reckoned from the date of signing of the CNA. Public officials directly responsible for illegal expenditures are personally liable, but passive recipients who received disallowed benefits in good faith are not required to refund.