Tetangco v. Commission on Audit
REITERATIONFacts
The Antecedents: The Commission on Audit (COA) disallowed the Extraordinary and Miscellaneous Expenses (EMEs) of the ex officio members of the Monetary Board (MBM), finding that they were not entitled to additional EMEs beyond what was appropriated for them as cabinet members under the General Appropriations Act (GAA). This disallowance stemmed from a COA Performance Audit Report on the allocation and utilization of EMEs of the MBM. Notices of Disallowance (ND) Nos. 10-004 GF (2007-2008) and 10-004 GF (2007-2009) were issued, holding MBMs and BSP personnel, including petitioners, personally liable. Procedural History: Petitioners filed a Motion for Reconsideration and/or Appeal with the COA Director, which was denied. They then filed a Petition for Review with the COA, which was also denied in COA Decision No. 2013-227. Their subsequent Motion for Reconsideration and Supplemental Motion for Reconsideration were denied in a COA Resolution dated August 12, 2014. This led to the filing of the instant Petition for Certiorari. The Petition: Petitioners assailed the COA's resolution, alleging that the COA acted without or in excess of its jurisdiction, or with grave abuse of discretion, in disallowing the EMEs. They argued that the disallowance should not be applied retroactively, that MBMs incur expenses distinct from their principal offices, that they did not fail to exercise the highest degree of responsibility, and that the disallowance violated the equal protection clause. Petitioner Favila also argued he should not be held liable for one of the NDs as he did not participate in the approval of the EMEs covered by it.
Issue(s)
Whether the COA gravely abused its discretion in disallowing the EMEs of the ex officio MBMs. Whether the disallowance should be applied retroactively to EMEs incurred prior to the finality of COA Decision No. 2010-048. Whether the ex officio members of the Monetary Board are entitled to additional EMEs separate from those appropriated for their cabinet positions. Whether the petitioners failed to exercise the highest degree of responsibility in approving the grant of EMEs. Whether the disallowance violates the equal protection clause. Whether Petitioner Favila is solidarily liable for the disallowed EMEs.
Ruling
The Petition is DISMISSED. The Commission on Audit's Resolution dated August 12, 2014, affirming its Decision No. 2013-227 and sustaining the Notices of Disallowance Nos. 10-004 GF (2007-2008) and 10-004 GF (2007-2009), is AFFIRMED in toto.
Ratio Decidendi
On the disallowance of EMEs for ex officio MBMs: The Court affirmed the COA's disallowance, holding that ex officio members of the Monetary Board are not entitled to additional EMEs from the BSP. The Court reasoned that the ex officio position is part of their principal office as cabinet members, and they are already entitled to EMEs appropriated under the GAA for their cabinet positions. Receiving additional EMEs from the BSP would constitute double compensation, which is prohibited. The Court emphasized that the limitations imposed by law on EMEs were not observed. On the retroactivity of COA Decision No. 2010-048: The Court found that the issue of additional compensation or allowances for ex officio members was not a novel issue at the time the subject allowances were authorized. It cited previous jurisprudence, including Civil Liberties Union vs. Executive Secretary, Dela Cruz, et. al. vs. COA, and National Amnesty Commission vs. COA, which had already settled the irregularity of giving additional compensation to ex officio members. Therefore, the petitioners could not claim ignorance of the law or jurisprudence. On the entitlement to EMEs separate from principal office: The Court reiterated that the ex officio membership in the Monetary Board does not constitute a separate office but is annexed to the primary functions of the cabinet member. Consequently, receiving additional EMEs from the BSP, beyond what is appropriated for their cabinet position under the GAA, is irregular and constitutes double compensation. The Court noted that the EMEs received from the BSP appeared to be higher than their appropriations as cabinet members. On the failure to exercise the highest degree of responsibility: The Court held that the petitioners, particularly the Monetary Board members and BSP personnel involved in approving the EMEs, failed to exercise the highest degree of responsibility required of bank officials. Citing Section 2 of R.A. No. 8791 (General Banking Law of 2000) and jurisprudence like Philippine National Bank v. Rodriguez, et.al., the Court stressed that banks require employees and officials to adhere to high standards of integrity and performance. Their failure to observe existing laws, COA directives, and jurisprudence amounted to gross negligence, negating their defense of good faith. On the violation of the equal protection clause: The Court found no violation of the equal protection clause. The disallowance was based on the specific legal limitations and prohibitions against double compensation for ex officio members, not on arbitrary classification. The distinction made between cabinet members serving ex officio and other officials was justified by the constitutional and legal framework governing public office and compensation. On Petitioner Favila's liability: The Court found Petitioner Favila solidarily liable. It reasoned that his liability arose not only from his receipt of the disallowed allowances in 2008 when he was an ex officio member but also from his failure to exercise the highest degree of responsibility. As a cabinet member, he was expected to be aware of the extent of benefits he was entitled to, and the existence of the GAA limiting EMEs was a clear legal constraint. His participation in the Monetary Board meant he was expected to be abreast of laws affecting his functions.
Main Doctrine
Ex officio members of the Monetary Board are not entitled to additional Extraordinary and Miscellaneous Expenses (EMEs) from the Bangko Sentral ng Pilipinas (BSP) if they are already receiving such allowances from their respective departments as appropriated under the General Appropriations Act (GAA), as their ex officio position is considered part of their principal office and not a separate one.