Chozas v. Commission on Audit
REITERATIONFacts
The Antecedents: The Board of Regents (BoR) of the Bulacan State University (BulSU) authorized the grant of an Accomplishment Incentive Award to its officials, faculty, and non-academic personnel, totaling P37,876,296.57. This award was subsequently disallowed by the Commission on Audit (COA) through Notice of Disallowance (ND) Nos. 13-001-164(12) to 13-042-164(12). The COA found the award to be irregular and lacking legal basis, citing violations of the Constitution, Republic Act No. 6758 (Salary Standardization Law), and relevant COA Circulars. Procedural History: Following the disallowance, separate appeals were filed by BulSU officials and employees with the COA Regional Office III, which upheld the disallowance and ordered the refund of the disallowed benefits. The petitioners-employees then filed a Petition for Review with the COA, which was denied in COA Decision No. 2016-096, affirming the disallowance. Separately, the Petition for Review filed by the petitioners-officials was dismissed by the COA in Decision No. 2017-326 for being filed out of time, though the COA also noted that the grant of the award contravened existing rules. The Petition: Both sets of petitioners filed Petitions for Certiorari under Rule 64, in relation to Rule 65, of the Rules of Court, seeking to nullify the COA's decisions. The petitioners-employees argued that the COA erred in disallowing the award and ordering a refund, asserting the BoR's authority under R.A. No. 8292 to use the Special Trust Fund (STF) for such incentives and claiming good faith. The petitioners-officials additionally challenged the dismissal of their Petition for Review due to tardiness. The COA, in its comments, urged dismissal on both procedural and substantive grounds, emphasizing the lack of legal basis for the award and the procedural lapses.
Issue(s)
Whether the COA committed grave abuse of discretion in affirming the disallowance of the Accomplishment Incentive Award and whether the Accomplishment Incentive Award could be validly disbursed from the Special Trust Fund (STF) of BulSU. Whether the Petition for Review filed by the petitioners-officials was filed within the reglementary period. Whether the non-filing of a motion for reconsideration by petitioners-employees should be excused. Whether the petitioners-employees and petitioners-officials are liable to refund the disallowed amounts.
Ruling
The Supreme Court denied the petitions for certiorari for lack of merit and affirmed the decisions of the Commission on Audit. The Court held that the Accomplishment Incentive Award was illegally disbursed, and all recipients are liable to refund the amounts received.
Ratio Decidendi
On the issue of grave abuse of discretion and the legality of the Accomplishment Incentive Award: The Court affirmed the COA's disallowance, holding that the COA, as the guardian of public funds, has the constitutional mandate to disallow unauthorized expenditures. The release of the Accomplishment Incentive Award by the BulSU officers had no legal basis. The Special Trust Fund (STF) under R.A. No. 8292 is explicitly for expenditures pertaining to instruction, research, and extension, or other programs/projects directly related thereto. The Accomplishment Incentive Award did not fall under these categories; it was not part of any specific academic program or project. The Court applied the principle of ejusdem generis to interpret the phrase "other programs/projects" as referring only to those akin to instruction, research, or extension. Therefore, the grant of the award was an ultra vires act, rendering the distribution unlawful. On the issue of the petitioners-officials' appeal period: The Court found that the Petition for Review filed by the petitioners-officials before the COA was indeed filed beyond the reglementary period. The COA Rules of Procedure mandate that an appeal to the Commission Proper must be filed within the time remaining of the six-month period from the receipt of the Notice of Disallowance (ND). The petitioners-officials received the NDs in March 2013 and filed their Petition for Review in May 2014, 231 days after receiving the NDs, which clearly exceeded the six-month period. Their attempt to file earlier on March 21, 2014, was also flawed as it was addressed to the Regional Office instead of the Commission Secretariat and lacked proof of payment of docket fees. Consequently, the decision of the COA Regional Director had attained finality. On the issue of the non-filing of a motion for reconsideration by petitioners-employees: The Court excused the petitioners-employees' failure to file a motion for reconsideration against COA Decision No. 2016-096, citing exceptions to the rule. The issues raised in their Petition for Certiorari were the same as those raised before the COA, making a motion for reconsideration potentially useless. Furthermore, the Court noted the necessity of addressing the issues for stability in public service and the serious implications on the administration of the executive department. On the liability of recipients to refund: The Court held that as a natural consequence of the finding that the allowances and benefits were illegally disbursed, all recipients are obligated to restore the amounts to the government coffers. This is based on the principle of unjust enrichment under Article 22 of the Civil Code. The Court reiterated that the defense of good faith is no longer available for approving officers, and even for rank-and-file recipients, the obligation to return is limited to what they actually received. The recipients are considered trustees of the disallowed amounts, as it is against equity and good conscience for them to retain funds disbursed without legal basis.
Main Doctrine
The Commission on Audit (COA) has the constitutional mandate to disallow unauthorized and unlawful release of allowances and benefits by government entities. The Special Trust Fund (STF) of state universities and colleges, as defined under R.A. No. 8292, can only be used for expenditures pertaining to instruction, research, and extension, or other programs/projects directly related thereto, and not for general incentive awards. Recipients of illegally disbursed funds are obligated to return the amounts received due to unjust enrichment.