Paraiso-Aban v. Commission on Audit
REITERATIONFacts
The Antecedents: During the 11th Congress, Senate committees investigated alleged anomalous land acquisitions by the Armed Forces of the Philippines Retirement and Separation Benefits System (AFP-RSBS). The Deputy Ombudsman requested the Commission on Audit (COA) to audit AFP-RSBS transactions. A special audit team (SAT) found that AFP-RSBS purchased four parcels of land in Calamba, Laguna, from Concord Resources, Inc. for P341,343,000.00, but the deed of sale registered with the Register of Deeds (RD) indicated a price of P91,024,800.00, resulting in a discrepancy of P250,318,200.00. Procedural History: The SAT issued Audit Observation Memorandum Nos. 2005-01 and 2005-02, to which AFP-RSBS did not respond. Subsequently, Notice of Disallowance (ND) No. 2010-07-084-(1996) was issued for P250,318,200.00. Petitioner Alma G. Paraiso-Aban, then Acting Head of the Office of Internal Auditor of AFP-RSBS, was named as one of the persons liable for verifying the correctness of the payment. Petitioner appealed to the COA Proper, arguing she had no prior knowledge of the transaction, payments were made before her verification, supporting documents were complete, she did not benefit from the transaction, and she signed "verified correct" in good faith after post-audits by her subordinates. The COA en banc denied her request for exclusion from liability and her subsequent motion for reconsideration. The Petition: Petitioner filed a Petition for Certiorari under Rule 64, in relation to Rule 65, of the Rules of Court, seeking to nullify the COA's decision and resolution.
Issue(s)
Whether the Commission on Audit committed grave abuse of discretion in denying petitioner's request for exclusion from liability under the Notice of Disallowance; and whether petitioner exercised the required diligence and good faith in verifying the correctness of the payment for the land acquisition.
Ruling
The petition is dismissed for lack of merit. The Court finds no grave abuse of discretion on the part of the COA in rendering its assailed decision.
Ratio Decidendi
On the issue of grave abuse of discretion and petitioner's liability: The Court found no grave abuse of discretion on the part of the COA. The COA's audit power is a constitutional mechanism for check and balance, and its findings are generally accorded respect and finality due to its presumed expertise. The petitioner's defense that she had no knowledge of the transaction or the two versions of the deed of sale prior to her post-audit, and that payments were made before she signed "verified correct," was disregarded. The Court emphasized that internal audit is a crucial part of internal control, and it is the direct responsibility of agency heads to monitor a sound system of internal control. Petitioner admitted that her verification consisted of checking against "approved" planned purchases and budgets, without consulting independent sources like the Bureau of Internal Revenue (BIR) or the Register of Deeds (RD) to ascertain prevailing real estate prices. This failure to perform necessary personal verification, especially given the substantial amount involved and the likelihood of inflated prices, demonstrated a lack of the required diligence and good faith in safeguarding AFP-RSBS assets. The Court reiterated that public officers certifying to the correctness of expenditures must exercise the diligence of a good father of a family, and petitioner's reliance solely on subordinates' post-audits and approved budgets, without independent verification, rendered her liable for the loss incurred by AFP-RSBS. The Court concluded that petitioner neglected to exercise due care and diligence in preventing the huge loss to AFP-RSBS, as she could have easily discovered the discrepancy in the deeds of sale had she procured independent data and documents from the BIR and RD during the several months that elapsed between the payment and her verification.
Main Doctrine
Public officers who certify as to the correctness of expenditures, without performing the required due diligence and verification, are liable for audit disallowances, especially when such failure results in financial loss to the government.