Teves v. Commission on Audit
REITERATIONFacts
1. The Antecedents: The National Power Corporation (NPC) Board of Directors, through Board Resolution No. 2009-52, authorized the payment of Employee Health and Wellness Program and Related Financial Assistance (EHWPRFA) to its qualified officials and employees. This benefit, amounting to P5,000.00 monthly and released quarterly, was subsequently disallowed by the Commission on Audit (COA) in Notice of Disallowance (ND) No. NPC-11-004-10. The disallowance was based on the finding that the EHWPRFA was a new benefit that lacked the prior approval of the Office of the President, as required by Memorandum Order No. 20 dated June 25, 2001. 2. Procedural History: The petitioners, the NPC Board of Directors, appealed the Notice of Disallowance to the COA Corporate Government Sector—Cluster 3, which affirmed the disallowance in a Decision dated December 27, 2013. Subsequently, the petitioners filed a petition for review before the COA proper. In its Decision dated February 16, 2017, the COA upheld the disallowance, ruling that the EHWPRFA was a new benefit and that its grant required presidential approval, rendering the doctrine of qualified political agency inapplicable. A subsequent Resolution dated March 15, 2018, partially granted the motion for reconsideration, absolving passive recipients from refunding the disallowed amount due to good faith, but maintained the liability of those who authorized or approved the grant. 3. The Petition: The petitioners filed a Petition for Certiorari under Rule 64 of the Revised Rules of Court, assailing the COA's February 16, 2017 Decision and March 15, 2018 Resolution. They argue that the COA committed grave abuse of discretion in ruling that the EHWPRFA was a new benefit and that it required presidential approval. Petitioners contend that the EHWPRFA is merely an expansion of existing wellness benefits and that presidential approval was implicitly secured through the presence of the Department of Budget and Management Secretary, who is a member of the NPC Board, invoking the doctrine of qualified political agency. The COA, in its comment, reiterated that the EHWPRFA was a new benefit requiring presidential approval, and that the alter ego doctrine does not apply to ex officio positions.
Issue(s)
Whether the COA committed grave abuse of discretion amounting to a lack or excess of jurisdiction in ruling that EHWPRFA was a new benefit. Whether the COA committed grave abuse of discretion amounting to a lack or excess of jurisdiction in ruling that the grant of EHWPRFA needed Presidential approval.
Ruling
The petition is without merit. The Supreme Court affirmed the COA's disallowance of the EHWPRFA but modified the ruling regarding the refund liability of passive recipients. The Court held that all recipients, including passive ones, are liable to refund the disallowed amount.
Ratio Decidendi
On the issue of whether EHWPRFA was a new benefit: The Court found that the EHWPRFA was indeed a new benefit and not merely an increase in existing benefits. The Employee Health and Wellness Program and Related Financial Assistance (EHWPRFA) was a straight-up cash benefit of P5,000.00 monthly, released quarterly. This differed significantly from the benefits under the NPC Star Program (Circular No. 2006-04) and the Enhanced Comprehensive Health Benefit Program (CHBP) under Circular No. 2000-55, which primarily consisted of reimbursements for medical, dental, and optical expenses, medical assistance for dreaded diseases, annual physical examinations, and annual executive check-ups. The EHWPRFA was a cash grant given to employees regardless of their health condition, unlike the limited medical assistance under CHBP. Therefore, it could not be considered a mere augmentation of existing benefits. On the issue of whether Presidential approval was required: The Court ruled that the grant of EHWPRFA required Presidential approval. Memorandum Order (M.O.) No. 20 and Administrative Order (A.O.) No. 103, both in effect at the time, mandated the suspension of new or additional benefits and required Presidential approval for any increase in salary or compensation for government-owned or controlled corporations (GOCCs). Even if the EHWPRFA were considered an increase of existing benefits, it still fell under the purview of these directives. The Court emphasized that these issuances did not limit their application to entirely new benefits but also encompassed increases to existing ones. Thus, the augmentation of benefits enjoyed by NPC employees necessitated the imprimatur of the President. The Court held that the doctrine of qualified political agency was inapplicable to the acts of cabinet secretaries sitting as members of the NPC Board of Directors in an ex officio capacity. The doctrine posits that department secretaries are alter egos of the President, and their acts are presumed to be those of the President. However, this doctrine does not extend to acts performed by cabinet members by virtue of their office or function, as in their ex officio capacity. The DBM Secretary's membership in the National Power Board was by operation of law (R.A. No. 9136), not by direct appointment from the President. Therefore, the DBM Secretary's assent to the EHWPRFA grant as a board member did not constitute Presidential approval. The Court clarified that requiring Presidential approval in such instances does not create an absurd situation, as the Budget Secretary, acting ex officio, is not the President's alter ego in that specific capacity.
Main Doctrine
The grant of new or additional benefits to government-owned or controlled corporations (GOCCs) requires prior approval from the President, and the doctrine of qualified political agency does not apply to acts performed by cabinet secretaries in their ex officio capacity as members of a GOCC's board of directors. Passive recipients of disallowed benefits are liable to refund the amounts received under the principle of unjust enrichment, regardless of good faith.