Philippine Health Insurance Corporation v. Commission on Audit
REITERATIONFacts
The Antecedents: The PhilHealth Board of Directors (BOD) passed resolutions approving the entitlement of its members to Extraordinary and Miscellaneous Expenses (EME) and later, Institutional Meeting Expenses (IME), intended to cover expenses incurred in the performance of official functions. These were charged against Representation Expenses and Committee Meeting Expenses accounts, exceeding the General Appropriations Act (GAA) limitations. Procedural History: The Commission on Audit (COA) issued an Audit Observation Memorandum (AOM) noting the irregular charging of EME to other accounts and the reimbursement of expenses to individuals not entitled to EME. Subsequently, a Notice of Disallowance (ND) was issued disallowing IME payments totaling ₱2,965,428.59 for lack of legal basis. PhilHealth's appeals to the COA-Corporate Government Sector (CGS) and COA Proper were denied, the latter on the ground of being filed out of time. The Petition: PhilHealth filed a petition for review on certiorari with the Supreme Court, assailing the COA's decision and resolution, alleging grave abuse of discretion for denying their appeal on procedural grounds instead of merits.
Issue(s)
Whether the Commission on Audit gravely abused its discretion in denying PhilHealth's appeal on mere procedural grounds. Whether the grant of Institutional Meeting Expenses (IME) to the members of the PhilHealth Board of Directors (BOD) for 2010 was with legal basis. Whether the members of the BOD who received the disallowed IME are liable to refund the same.
Ruling
The petition is denied. The Decision No. 2015-093 dated April 1, 2015, and Resolution dated December 15, 2015, of the Commission on Audit, disallowing the Institutional Meeting Expenses for 2010 paid to members of the Board of Directors of Philippine Health Insurance Corporation in the total amount of ₱2,965,428.59, are affirmed.
Ratio Decidendi
On the procedural issue of the reglementary period: The Court found no merit in PhilHealth's argument that the six-month reglementary period to file an appeal should be interpreted using the "calendar month" definition from Primetown. The Court clarified that Primetown dealt with the computation of a "year," whereas the present case concerns the computation of a "month." Under both the Civil Code and the Administrative Code, a month is understood to be equivalent to 30 days. Therefore, six months is equivalent to 180 days. PhilHealth received the Notice of Disallowance on July 27, 2012, and filed its appeal to the COA-CGS on January 24, 2013. Counting 180 days from July 27, 2012, the last day to file the appeal was January 23, 2013. Thus, PhilHealth's appeal was filed out of time, and the COA correctly denied it on procedural grounds. On the substantive issue of the legal basis for IME: The Court held that Republic Act No. 7875 (RA 7875), as amended, does not authorize the grant of additional compensation, allowances, or benefits to the members of the PhilHealth BOD beyond the per diems explicitly provided for in Section 18(d). The principle of expressio unius est exclusio alterius applies, meaning the express mention of per diems excludes other forms of compensation. For ex officio members, receiving additional compensation would violate constitutional prohibitions against holding multiple government positions and receiving double compensation, as their services are already covered by their principal office's compensation. For appointive members, the law does not grant PhilHealth the authority to provide allowances other than per diems. The Court distinguished this from statutes that expressly allow additional benefits, citing RA No. 9286 as an example. On the issue of good faith and refund liability: The Court ruled that the defense of good faith does not lie for both ex officio and appointive members. For ex officio members, the patent disregard of existing laws, jurisprudence, and COA directives amounts to gross negligence, negating the presumption of good faith. The Court noted that these members were aware of the limitations imposed by the GAA and existing jurisprudence. For appointive members, while they might have relied on PhilHealth's fiscal autonomy, the COA-CGS findings, unrebutted by PhilHealth, indicated that these members knew the benefits had no legal basis at the time of receipt. The Court reiterated that good faith requires honesty of intention and freedom from knowledge of circumstances that ought to put one on inquiry, which was lacking in this case.
Main Doctrine
The grant of Institutional Meeting Expenses (IME) to members of the Philippine Health Insurance Corporation (PhilHealth) Board of Directors (BOD) for 2010 was without legal basis and thus, properly disallowed by the Commission on Audit (COA). The BOD exceeded its authority in granting such allowances beyond the per diems explicitly provided by law, and the principle of good faith does not apply to excuse the refund of disallowed benefits in this case.