Quintero v. Commission on Audit
REITERATIONFacts
The Antecedents: The Board of Directors (BOD) of Cauayan City Water District (CCWD) passed Board Resolution No. 004, Series of 2008, upgrading the monthly salary of its General Manager (GM), Engr. Artemio A. Quintero, Jr. (Quintero), from P25,392.00 to P45,738.00, citing Section 2 of Republic Act (R.A.) No. 9286. The Department of Budget and Management (DBM) advised Quintero that while the BOD could fix the GM's compensation, it must comply with the Salary Standardization Law (SSL, R.A. No. 6758). Procedural History: On March 9, 2010, the Commission on Audit (COA) issued Notice of Disallowance (ND) No. 2010-01-101, disallowing the overpayment of Quintero's adjusted salary amounting to P364,659.50. Quintero appealed to the COA Regional Office No. II, which upheld the disallowance, stating that R.A. No. 9286 did not exempt Local Water Districts (LWDs) from the SSL and that no vested right could be derived from an upgrade made in contravention of law. The COA, in its July 18, 2014 Decision, affirmed the Regional Office's ruling, and its March 9, 2015 Resolution denied Quintero's motion for reconsideration. The Petition: Quintero filed a petition for certiorari before the Supreme Court, assailing the COA's decisions and resolutions.
Issue(s)
Whether the COA committed grave abuse of discretion in declaring that the CCWD Board has no authority to fix the salary of the General Manager and that R.A. No. 9286 is not inconsistent with the SSL. Whether the COA committed grave abuse of discretion in not recognizing that Section 23 of P.D. No. 198, as amended by R.A. No. 9286, is an exception to the SSL. Whether Engr. Artemio Quintero, Jr. should be held liable to refund the disallowed amount.
Ruling
The Supreme Court affirmed the COA's Decision dated July 18, 2014, with modification. Engr. Artemio Quintero, Jr. is absolved from refunding the amount covered by Notice of Disallowance No. 2010-01-101.
Ratio Decidendi
On the authority of the BOD to fix GM's salary and the applicability of SSL: The Court held that while Section 23 of P.D. No. 198, as amended by R.A. No. 9286, empowers the Board of Directors (BOD) of Local Water Districts (LWDs) to fix the compensation of their General Manager (GM), this authority is not absolute. The compensation fixed must conform to the standards set by the Salary Standardization Law (SSL, R.A. No. 6758). The Court reiterated its ruling in Mendoza v. COA, stating that LWDs must observe the limits provided in the SSL, as there was no express exemption clause in P.D. No. 198, as amended, similar to those found in the charters of other government-owned and controlled corporations. R.A. No. 9286 merely provided security of tenure for GMs and did not exempt LWDs from the SSL. Furthermore, R.A. No. 9286 did not implicitly repeal the SSL, as implied repeal is disfavored and requires an irreconcilable inconsistency, which was not present here. The power of the BOD to fix the salary is recognized, but it is subject to the SSL's prescribed rates. On whether R.A. No. 9286 is an exception to the SSL: The Court found no basis to consider R.A. No. 9286 as an exception to the SSL. The amendment introduced by R.A. No. 9286 to Section 23 of P.D. No. 198 focused on the security of tenure of the GM, not on exempting LWDs from salary standardization. If Congress intended an exemption, it could have expressly provided for it, as it did in the charters of other government entities. The absence of such an express provision, coupled with the consistent application of the SSL to government positions, leads to the conclusion that LWDs remain covered by the SSL. On the refund of the disallowed amount: The Court absolved Engr. Artemio Quintero, Jr. from refunding the disallowed amount based on good faith. Similar to the ruling in Mendoza v. COA, Quintero had no hand in fixing the amount of his salary; it was fixed by the BOD of CCWD. Crucially, at the time his salary increase was approved and received, there was no categorical pronouncement from the Court yet that LWDs were subject to the coverage of the SSL. Therefore, he received the disallowed salaries in good faith, exempting him from the obligation to refund.
Main Doctrine
The authority of the Board of Directors of Local Water Districts to fix the compensation of their General Manager, as granted by Section 23 of P.D. No. 198, as amended by R.A. No. 9286, is not absolute and must be exercised within the limits prescribed by the Salary Standardization Law (R.A. No. 6758). However, officers who received disallowed salary increases in good faith, prior to a clear judicial pronouncement on the matter, may be absolved from refunding the disallowed amounts.