Sambo v. Commission on Audit
REITERATIONFacts
The Antecedents: Quedan and Rural Credit Guarantee Corporation (QUEDANCOR), a government-owned and controlled corporation (GOCC), issued payments for Year-End Benefits (YEB), Medicine Reimbursements, Performance Bonus (PerB), and Productivity Incentive Benefit (PIB) to several employees for the Calendar Years (CYs) 2006 and 2007. The Audit Team Leader (ATL) issued a Notice of Disallowance (ND) for ₱94,913.15, citing that the payees were casual employees not entitled to such benefits, and that the medicine reimbursements lacked statutory authority. The ATL identified payees, petitioner Avila (Regional Accountant) for certifying payments, petitioner Sambo (Acting Regional Assistant Vice President) for approving payments, Federico A. Espiritu (Executive Vice-President) for issuing authorizations, and Nelson C. Buenaflor (President and CEO) for issuing the circular on medicine reimbursement, as liable. Procedural History: The ATL denied the motion for reconsideration. Petitioners and employees appealed to the COA Regional Office (RO) V, arguing they followed head office policies and acted in good faith. The Regional Director lifted the disallowance on the PerB by ₱10,000.00 due to submitted CSC-approved appointments. The COA Commission Proper, upon automatic review, partly affirmed the RO decision, lifting the disallowance on PerB for those with CSC-approved appointments but affirming the disallowance of YEB, remaining PerB, PIB, and medicine reimbursements totaling ₱31,815.50 and ₱53,097.65, respectively. The officers who authorized, certified, or approved the payments were held solidarily liable, while rank-and-file employees in good faith were exempted from refunding. A motion for reconsideration was denied. The Petition: Petitioners filed a petition for certiorari, arguing they were subordinate officers performing ministerial functions in good faith and should not be held solidarily liable. They contended that the policy-makers, Board of Directors, President, and CEO of QUEDANCOR should be primarily liable.
Issue(s)
Whether the petitioners, as subordinate officers performing ministerial functions, can be held solidarily liable for the disallowed expenditures, considering their duties and the applicable regulations. Whether the petitioners acted in good faith in approving and certifying the payments of benefits to QUEDANCOR employees, despite the lack of Civil Service Commission (CSC) approval for the employees' appointments and the violation of explicit rules and regulations.
Ruling
The petition is dismissed. The Commission on Audit Decision No. 2015-024 dated January 29, 2015, is affirmed.
Ratio Decidendi
On the issue of petitioners' liability: The Court affirmed the ruling of the Commission on Audit (COA), holding that petitioners Rhodelia L. Sambo and Loryl J. Avila, as approving and certifying officers, are solidarily liable for the disallowed expenditures. Presidential Decree No. 1445, Section 103, establishes general liability for unlawful expenditures, requiring that an expenditure be in violation of law or regulation and the official be found directly responsible. COA Circular No. 94-001 further clarifies that public officers who approve or authorize transactions involving government funds are liable for losses arising from their negligence or failure to exercise the diligence of a good father of a family. The petitioners failed to discharge their duties and exercise the required diligence, leading to irregular disbursements paid to employees whose appointments were not approved by the Civil Service Commission (CSC). QUEDANCOR, as a GOCC, is bound by civil service laws, and the CSC is the central personnel agency. The petitioners' argument that they were merely following policies and guidelines issued by QUEDANCOR's head office, and that their functions were ministerial, was rejected. On the issue of petitioners' good faith: The Court cited jurisprudence, including Casal v. COA and Dr. Velasco, et al. v. COA, which held that patent disregard of issuances from the President and directives from the COA amounts to gross negligence, making approving officers liable for refund, even if the grant was not for a dishonest purpose. The presumption of regularity in the performance of official duties must yield when an explicit rule is violated, as was the case here with Budget Circulars and National Compensation Circulars concerning eligibility for YEB, PerB, and PIB, and Section 84(1) of P.D. 1445 for medicine reimbursements. The petitioners' claim of good faith was overcome by their failure to abide by these explicit rules and regulations, particularly concerning the CSC's authority over appointments in GOCCs. The Court also noted that some of the checks for disallowed benefits were issued prior to the petitioners' query to their head office, undermining their claim of seeking guidance. Therefore, the petitioners' non-observance of existing auditing rules and regulations, coupled with the lack of CSC approval for the employees' appointments, rendered them liable.
Main Doctrine
Public officials who approve or authorize transactions involving the expenditure of government funds and uses of government properties shall be liable for all losses arising out of their negligence or failure to exercise the diligence of a good father of a family. The presumption of good faith in the performance of official duties must fail in the presence of an explicit rule that was violated, and patent disregard of issuances of the President and directives of the COA amounts to gross negligence, making approving officers liable for refund.