Paguio v. Commission on Audit
REITERATIONFacts
1. The Antecedents: Petitioners, officers and board members of the Pagsanjan Water District (PAGWAD), a government-owned and controlled corporation, received various benefits and allowances in 2009 and 2010. These included extra year-end financial assistance, additional extra year-end financial assistance, medical allowance, anniversary bonus, productivity enhancement incentive, communication allowances, and loyalty awards, authorized through several board resolutions. On May 10, 2012, the Commission on Audit (COA) issued Notice of Disallowance (ND) No. 2012-100-001(09 & 10), disallowing these disbursements totaling P283,965.00 for lack of legal basis, citing violations of Presidential Decree (PD) No. 198, as amended, COA Resolution No. 2004-006, and Department of Budget and Management (DBM) regulations, as the benefits were granted without the required approval from the Local Water Utilities Administration (LWUA). 2. Procedural History: The petitioners received the Notice of Disallowance on May 23, 2012. They filed an appeal memorandum with the COA Regional Office No. IV-A (ROIV-A) on November 14, 2012, arguing that the Board of Directors was authorized to grant these benefits under PD No. 198, as amended by Republic Act (RA) No. 9286, and citing various LWUA issuances. The COA ROIV-A, in its Decision No. 2014-35 dated April 15, 2014, denied the appeal, affirming the disallowance. The COA ruled that Executive Order (EO) No. 7 and LWUA Memorandum Circular No. 015-10 suspended the grant of such benefits, and LWUA Memorandum Circular No. 015-12 further suspended disbursements pending higher authority approval. Petitioners received this decision on April 23, 2014. They then filed a Petition for Review with the COA Proper on April 30, 2014, which was dismissed in COA Decision No. 2015-190 dated April 13, 2015, for being filed out of time. A subsequent motion for reconsideration was also denied by COA Resolution dated December 23, 2015. 3. The Petition: This Petition for Certiorari under Rule 64, in relation to Rule 65 of the Rules of Court, seeks to annul the COA's Decision No. 2015-190 and Resolution dated December 23, 2015. The petitioners argue that the COA Proper committed grave abuse of discretion in dismissing their Petition for Review for being filed out of time. They also contend that the COA erred in sustaining the Notice of Disallowance. The petitioners implore the Court to exercise liberality in reviewing the COA's final and executory judgment. The core of their argument is that the LWUA issuances provided the necessary approval for the benefits, and that the COA's dismissal based on procedural technicality, despite the merits of their case, would defeat the ends of justice.
Issue(s)
Whether the COA Proper committed grave abuse of discretion in dismissing petitioners' Petition for Review for being filed out of time. Whether the COA Proper committed grave abuse of discretion in sustaining the ND No. 2012-100-001(09 & 10).
Ruling
The Petition is dismissed. The Commission on Audit Decision No. 2015-190 dated April 13, 2015 and Resolution dated December 23, 2015 are affirmed. Petitioners, as approving and certifying officers, are solidarily liable to return the disallowed amounts.
Ratio Decidendi
On the issue of grave abuse of discretion in dismissing the Petition for Review for being filed out of time: The Court held that the COA Proper did not commit grave abuse of discretion. The 2009 Revised Rules of Procedure of the COA prescribed a period of six months or 180 days from receipt of the ND to appeal an auditor's decision to the regional director up to the COA Proper. Petitioners received the ND on May 23, 2012, and filed an appeal to the COA ROIV-A on November 14, 2012, within the 180-day period. They received the COA ROIV-A Decision No. 2014-35 on April 23, 2014, giving them five remaining days to file an appeal to the COA Proper, which would be until April 28, 2014. However, they filed their Petition for Review before the COA Proper on April 30, 2014, two days late, without any explanation. Section 51 of P.D. No. 1445 states that a decision of the Commission, if not appealed in accordance with its rules, shall be final and executory. The doctrine of immutability of judgment dictates that a judgment that lapses into finality becomes immutable and unalterable, and may no longer be modified in any respect. Thus, no grave abuse of discretion can be imputed against the COA for dismissing the petition for being filed beyond the reglementary period. The Court reiterated that procedural rules should be respected, and liberality in their application is only for the most compelling reasons, which were not present in this case. The petitioners' general averments of social justice concepts and "grievous effect" on their families did not constitute a strong substantial justice consideration to warrant deviation from established rules. On the issue of grave abuse of discretion in sustaining the Notice of Disallowance (ND): Even if the Court were to resolve the case on the merits, the petitioners failed to show grave abuse of discretion. Section 13 of P.D. No. 198, as amended by R.A. No. 9286, authorizes the Board of Directors to prescribe additional allowances and benefits, but explicitly requires the approval of the Local Water Utilities Administration (LWUA) for such grants. The Court found that the PAGWAD Board of Directors did not comply with this requirement. The cited LWUA issuances, namely LWUA Resolution No. 239 and LWUA Memorandum Circular No. 011-06, which approved year-end financial assistance and cash gifts, were issued in contravention of Administrative Order (AO) No. 103 (2004), which expressly suspended the grant of new or additional benefits to GOCC officials and employees to implement austerity measures. The LWUA Board of Trustees and water district Boards of Directors cannot ignore directives from the Chief Executive. Furthermore, LWUA Memorandum Circular No. 004-11, cited by petitioners, pertained to the release of 2010 benefits, not the 2009 benefits in question. The Inter-Office Memorandum from the LWUA Legal Department regarding medical allowances was merely a recommendation and not a definitive approval, and it did not cover other disallowed benefits. Therefore, the disallowance of the benefits for lack of legal basis was proper.
Main Doctrine
The Commission on Audit (COA) did not commit grave abuse of discretion in dismissing a petition for review for being filed out of time, as the doctrine of immutability of judgment mandates that a decision that lapses into finality becomes immutable and unalterable. Furthermore, the disallowance of benefits granted to Board Members of a Water District was sustained due to lack of legal basis and non-compliance with required approvals, as well as violations of austerity measures and specific directives.