Oñate v. Commission on Audit
MODIFICATIONFacts
The Antecedents: In June 2009, Dr. Wenifredo T. Oñate (Dr. Oñate), acting as President of the Camarines Norte State College (CNSC), entered into a retainership contract with Atty. Alex A. Arejola. The contract, authorized by the CNSC Board of Trustees through Board Referendum No. 2, s. 2009, engaged Atty. Arejola as legal counsel for one year at a monthly fee of P10,000.00 plus appearance fees. The Office of the Solicitor General (OSG) eventually granted a retroactive deputation for Atty. Arejola on July 8, 2010. However, the CNSC only requested the written concurrence of the Commission on Audit (COA) on May 27, 2010, which was less than a week before the contract's expiration. Procedural History: On December 2, 2010, the COA denied the request for concurrence in Legal Retainer Review (LRR) No. 2010-158, citing violations of COA Circular No. 86-255 and COA Circular No. 95-011. Consequently, on February 15, 2011, the COA issued a Notice of Disallowance for the amount of P184,649.25. The COA later issued Decision No. 2014-126, which affirmed the disallowance and ruled that the payment was the personal liability of Dr. Oñate, as the official who secured and benefited from the services. The Petition: Dr. Oñate filed a petition for certiorari under Rule 64, in relation to Rule 65, of the Rules of Court, seeking to reverse the COA's decision. He argued that he should not be held solely liable for the refund of the disallowed amount. He contended that he acted in good faith and was armed with the necessary approval from the CNSC Board of Trustees when he entered into the contract with Atty. Arejola.
Issue(s)
Whether the Commission on Audit (COA) committed grave abuse of discretion in disallowing the payment for private legal services because the mandatory requirement of prior COA concurrence was not met. Whether Dr. Wenifredo T. Oñate should be held solely liable for the disallowed amount, considering the authorization from the CNSC Board of Trustees.
Ruling
The petition is GRANTED. The Supreme Court AFFIRMED the disallowance but MODIFIED the liability. Dr. Wenifredo T. Oñate, the CNSC Board of Trustees, and other officials found liable in the Notice of Disallowance are held personally and solidarily liable for the reimbursement. The COA is directed to order the Board of Trustees to file a memorandum or attend a hearing to present evidence that may exempt them from liability.
Ratio Decidendi
On Issue 1: The Supreme Court (SC) ruled that the Commission on Audit (COA) correctly disallowed the payment because the mandatory requirement of prior COA concurrence was not met. Under COA Circular No. 95-011, public funds cannot be used for private legal counsel unless the written conformity of the Office of the Solicitor General (OSG) and the written concurrence of the COA are secured first. The Court emphasized that this rule is absolute and that partial compliance or honest mistake due to ignorance of the law is not a valid defense. Applying the doctrine in Polloso v. Hon. Gangan, the Court held that the purpose of this requirement is to curtail the unauthorized and unnecessary disbursement of public funds. Since the CNSC only sought COA concurrence days before the contract expired, the expenditure was properly classified as illegal. On Issue 2: The Court held that Dr. Oñate should not be the only person held liable for the refund. Evidence showed that he was authorized by the CNSC Board of Trustees through Board Referendum No. 2, s. 2009, to enter into the contract. Under Section 103 of Presidential Decree (P.D.) No. 1445 and Section 43, Chapter V, Book VI of the Administrative Code, every official or employee authorizing or taking part in an illegal expenditure is solidarily liable. Therefore, the members of the Board of Trustees who granted the authority without requiring COA concurrence must also be held accountable. The Court modified the COA's ruling to reflect that the liability is personal and solidary among Dr. Oñate, the Board, and the other officials named in the Notice of Disallowance. This ensures that all parties responsible for the unlawful release of public funds are held to the same standard of accountability.
Main Doctrine
The Supreme Court (SC) reaffirms that the Office of the Solicitor General (OSG) is the primary law office of the Government, and its agencies or instrumentalities cannot hire private counsel without strict adherence to the dual requirements of OSG/OGCC (Office of the Government Corporate Counsel) conformity and Commission on Audit (COA) concurrence. This rule is absolute and intended to prevent the unnecessary expenditure of public funds. Any official who authorizes such payments in violation of these regulations assumes personal liability. Furthermore, such liability is solidary among all officials who participated in or authorized the illegal expenditure, including the members of the governing board who approved the hiring.