Arcena v. Commission on Audit
REITERATIONFacts
The Antecedents: From 1995 to 1996, the Philippine Marine Corps (PMAR) undertook infrastructure projects for the relocation of its headquarters in Fort Bonifacio, Makati City, to Marine Base in Ternate, Cavite (MBT projects), with a total funding of P69,983,830.00. A subsequent audit of these projects, initiated at the request of the Office of the Ombudsman due to an ongoing investigation, revealed that the funds expended exceeded the actual as-built plans by 2.33%, amounting to P1,590,173.66. Consequently, a Notice of Disallowance (ND) was issued against Cresencio D. Arcena, as proprietor of Berlyn Construction and Development Corporation and payee-contractor for the MBT projects. Procedural History: Arcena appealed the Notice of Disallowance (ND) to the COA-Fraud and Audit Investigation Office (FAIO), which affirmed the ND. He then filed a Petition for Review with the COA Proper on March 3, 2011. The COA Proper dismissed this petition, deeming it filed out of time, as Arcena failed to state the specific date of receipt of the ND, which prevented a clear determination of the remaining period for appeal. Arcena moved for reconsideration, claiming he received the FAIO decision on October 4, 2011, but this was denied for failure to substantiate the claim and for contradicting his earlier declaration. The COA Proper's decision was further affirmed by Decision No. 2016-197. The Petition: Arcena filed the present Petition for Certiorari under Rule 64, in relation to Rule 65 of the Revised Rules of Court, assailing the COA's decisions. He argues that the COA gravely abused its discretion by dismissing his petition for review on timeliness grounds and by failing to rule on the merits. Arcena contends that the MBT projects were settled accounts, precluding further revision under Section 52 of Presidential Decree (PD) No. 1445. He also asserts that the audit team incorrectly used Sub-Allotment Advices (SAAs) as the basis for the COA Cost Estimate and that the COA failed to prove his liability for the alleged variance in audit. The COA, in its Comment, reiterates the finality of the ND and argues that Section 52 of PD No. 1445 is inapplicable, and its computation is legally sound.
Issue(s)
Whether the COA gravely abused its discretion in dismissing Arcena's petition for review due to timeliness. Whether the COA gravely abused its discretion in not ruling on the merits of Arcena's petition for review.
Ruling
The Petition for Certiorari is dismissed. The assailed Decision of the Commission on Audit, Decision No. 2015-289 dated November 24, 2015, sustaining Notice of Disallowance No. PMAR-2008-01, is affirmed.
Ratio Decidendi
On the issue of timeliness of the Petition for Review before the COA Proper: The Supreme Court affirmed the COA's dismissal of Arcena's petition for review for being filed out of time. The Court reiterated that the right to appeal is a statutory privilege that must be exercised strictly in accordance with the rules, specifically Rule VII, Section 5 of the 2009 Revised Rules of Procedure of the COA, which requires the petition to state the specific dates to show it was filed within the reglementary period. Arcena's failure to indicate the exact date of receipt of the Notice of Disallowance (ND) was a fatal procedural flaw. The Court clarified the computation of the six-month period, explaining that the time consumed in appealing from the Director's decision to the COA Proper is deducted from the remaining period. Even with the most favorable assumption for Arcena, his petition was filed beyond the prescribed period, rendering the ND and the COA rulings final and immutable. The Court emphasized that procedural rules are essential for the orderly administration of justice and should not be relaxed without a compelling reason, which was absent in this case. On the issue of whether the COA should have ruled on the merits: The Supreme Court held that since Arcena's petition for review was filed out of time, the questioned ND and the COA rulings had already attained finality. Consequently, the Court could no longer exercise its jurisdiction to modify or reverse the assailed decisions. The Court also addressed the merits of Arcena's arguments, finding them unmeritorious. Firstly, Section 52 of PD No. 1445, regarding the opening and revision of settled accounts, was not applicable because the MBT projects were not considered settled accounts at the time of the audit, as indicated by the preliminary nature of the audit reports cited by Arcena and the subsequent issuance of the ND. Secondly, the COA's computation of the excessive disbursement was based on substantial evidence and followed COA standards, utilizing data from various government agencies and industry sources to establish a reasonable cost estimate. The Court found that the total disbursements exceeded the COA's estimated cost, even with a 10% allowance, thus validating the disallowance.
Main Doctrine
The right to appeal is a statutory privilege that must be exercised strictly in accordance with the rules of procedure. Failure to comply with the procedural requirements, such as stating the specific dates of receipt of decisions to show timeliness, warrants the dismissal of the appeal. Once a decision becomes final and executory due to a belated appeal, the Court can no longer exercise its jurisdiction to modify or reverse it.