Rotoras v. Commission on Audit
MODIFICATIONFacts
1. The Antecedents: Various state universities and colleges (SUCs) approved resolutions granting additional honoraria to their governing board members for attending board meetings. These honoraria, ranging from P3,000.00 to P5,000.00, were in addition to the P2,000.00 mandated by existing regulations and were sourced from the SUCs' special trust funds, primarily derived from tuition fees. The Commission on Audit (COA) subsequently disallowed these payments, asserting that the special trust funds could only be used for instruction, research, extension, or similar programs and projects, and that the governing boards' functions did not fall within these categories. The COA also noted that members of governing boards were only entitled to per diems and reimbursement of necessary expenses, not additional honoraria. 2. Procedural History: Following the disallowances by various audit team leaders, the Philippine Association of State Universities and Colleges, on behalf of 21 SUCs, appealed to the COA. The COA's Legal and Adjudication Office-National denied the appeal, affirming the disallowances. This decision was further affirmed by the COA En Banc in its November 3, 2011 Decision. Motions for reconsideration filed by the SUCs were subsequently denied by the COA En Banc on February 14, 2014. Aggrieved, Ricardo E. Rotoras, as president of the Philippine Association of Universities and Colleges, filed a Petition for Certiorari with the Supreme Court. 3. The Petition: Petitioner Ricardo E. Rotoras, through a Petition for Certiorari under Rule 64 of the Rules of Court, assails the COA's decisions. He argues that Republic Act No. 8292 empowers governing boards to grant honoraria from the SUCs' income, asserting that board meetings are directly related to instruction, research, and extension programs. Petitioner also invokes Section 36(10) of the Corporation Code, which allows for the extension of benefits to directors. Furthermore, he contends that the COA gravely abused its discretion in finding bad faith, as the governing boards relied on existing laws, implementing rules, and opinions from the Office of the Solicitor General. The petition seeks to overturn the COA's disallowance of the honoraria and the order for the members to refund the amounts received.
Issue(s)
Whether or not the COA's Decision had become final and executory against petitioner. Whether or not the COA correctly disallowed the additional honoraria for members of the governing boards of SUCs. Whether or not the members of the governing boards of SUCs should be ordered to refund the amounts they had received.
Ruling
The Petition for Certiorari is DISMISSED. The Decision and Resolution of the Commission on Audit are AFFIRMED. The members of the governing boards of the state universities and colleges shall return the disallowed benefits. Their obligation to return shall not be solidary.
Ratio Decidendi
On the finality of the COA Decision: The Court noted that petitioner filed his Motion for Reconsideration 31 days after the deadline, rendering the COA Decision final and executory against him. However, the Court also observed that the COA gave due course to petitioner's motion despite the procedural infirmity, rendering the issue of finality moot. The Court cited Lumayna v. Commission on Audit in support of this procedural observation. On the disallowance of additional honoraria: The Court affirmed the COA's disallowance, holding that the special trust funds of SUCs, derived from tuition fees and other charges, are strictly for instruction, research, extension, or similar programs or projects, as provided in Section 4(d) of Republic Act No. 8292. The Court applied the principle of ejusdem generis, stating that "other programs/projects" must be of the same nature as instruction, research, and extension. The Court found that the policymaking functions of the governing boards, while important, are not directly academic activities similar to those performed by teachers and students, and thus, their meetings do not fall within the allowed uses of special trust funds. The Court also cited Benguet State University v. Commission on Audit to support the interpretation of "other programs/projects." On the refund of disallowed benefits: The Court ruled that members of the governing boards who approved the disallowed honoraria must refund the amounts received. The defense of good faith is unavailable because their act of approving honoraria for themselves was self-serving and a plain violation of explicit provisions of law. The Court emphasized that reliance on Solicitor General opinions did not absolve them, as these opinions failed to consider the specific limitations on the use of special trust funds under R.A. 8292. The Court invoked the principle of unjust enrichment, stating that allowing them to retain the disallowed benefits would be against equity and good conscience, and they should be considered trustees of these funds for the benefit of the government, citing Government Service Insurance System v. Commission on Audit and Dubongco v. Commission on Audit.
Main Doctrine
The special trust fund of a state university or college shall only be used for instruction, research, extension, or similar programs or projects. Members of governing boards and officials who approved an allowance or benefit that has been disallowed are obliged to return what they have received, and the defense of good faith is no longer available to them.