Bilibli v. Commission on Audit
REITERATIONFacts
The Antecedents: The National Commission on Indigenous Peoples (NCIP) authorized the forging of a Memorandum of Agreement (MOA) with the Ateneo de Manila University (ADMU) for a Masters in Public Management Scholarship Program for 24 NCIP officials and employees. The NCIP Board approved Resolution No. 084-2012 authorizing the MOA and Resolution No. 088-2012 realigning P13,690,090.88 of its unutilized 2011 budget, allocating P3,095,829.25 for the scholars' tuition, miscellaneous, and transportation expenses. Procedural History: A post-audit by the Commission on Audit (COA) resulted in Audit Observation Memorandum No. 2013-02(12), citing irregularities in the scholarship grant, including lack of appropriation, absence of fund certification, and the availability of similar programs from state universities. Subsequently, Notice of Disallowance No. 2013-001 was issued for P1,462,358.04, representing 50% of the tuition and miscellaneous fees paid to ADMU. The grounds included lack of an approved Annual Procurement Plan, awarding the contract without an approved budget or public bidding, scholars being overqualified, and failure to refute the audit observation. The COA Audit Team identified the liable officers and the scholars/payee. On appeal, the COA-National Government Sector (NGS) Cluster 1 affirmed the disallowance but excluded the NCIP scholars and ADMU from liability, citing good faith and lack of failure in document submission, respectively. The COA En Banc affirmed the disallowance, ruling that the scholarship program was not part of the 2012 budget and thus could not be funded by reprogrammed funds. It directed the issuance of a Supplemental Notice of Disallowance against officers who approved Resolution No. 084-2012. The Petition: Petitioners, officers of the NCIP, sought a writ of certiorari, arguing that the COA gravely abused its discretion. They contended that the "Training and Scholarship Services" was part of the NCIP's 2011 budget and that augmentation from savings was proper. They also claimed to have acted in good faith, relying on certifications of necessity and validity of supporting documents. Zenaida Brigida Pawid also raised a prejudicial question regarding a Supplemental Notice of Disallowance.
Issue(s)
Whether the COA gravely abused its discretion in affirming the Notice of Disallowance. Whether the petitioners are liable to refund the full disallowed amount.
Ruling
The petition is GRANTED IN PART. The assailed Decision No. 2016-483 of the Commission on Audit is REVERSED and SET ASIDE IN PART. Petitioners Gladys Minerva N. Bilibli, Darrow P. Odsey and Zenaida Brigida H. Pawid are EXCUSED FROM returning the disallowed amount of P1,462,358.04.
Ratio Decidendi
On the issue of whether the COA gravely abused its discretion in affirming the Notice of Disallowance: The Court held that while a motion for reconsideration is generally a prerequisite to a petition for certiorari, it relaxed this rule in the interest of substantial justice. The core of the disallowance stemmed from the NCIP's scholarship program not being part of its approved 2012 budget. The Court reiterated that augmentation of funds is permissible only for items already included in the General Appropriations Act (GAA). Citing Section 60 of RA 10147 (FY 2011 GAA), the Court emphasized that "a non-existent program, activity, or project" cannot be funded by augmentation from savings. The NCIP's scholarship program, having been disapproved by the Department of Budget and Management (DBM) for FY 2012, was deemed a non-existent item in the approved budget. Therefore, its funding through realignment of unutilized funds from 2011 was without legal basis. The Court found that the COA did not commit grave abuse of discretion in sustaining the Notice of Disallowance. On the issue of whether petitioners are liable to refund the full disallowed amount: The Court applied the Rules on Return laid down in Madera v. COA. It acknowledged that the petitioners, as approving and certifying officers, acted in violation of clear and explicit rules, thus failing the presumption of good faith and potentially being liable for gross negligence. However, the Court noted that the COA-NGS Cluster 1 had already excused the NCIP scholars and ADMU from returning the amounts received. Citing Abellanosa v. COA and Pastrana v. COA, the Court explained that when recipients are excused from returning disallowed amounts, the net disallowed amount for which approving/certifying officers are liable is reduced. In this case, since the entire disallowed amount received by the payees had been excused at the COA level, the solidary liability of the petitioners was reduced to zero. Furthermore, the Court considered the ultimate benefit of the disbursement to the NCIP and the indigenous peoples it serves, falling under Madera's Rule 2d which allows excusing return based on undue prejudice, social justice considerations, and other bona fide exceptions. Thus, the petitioners were excused from returning the disallowed amount.
Main Doctrine
Augmentation of funds is permissible only for items already included in the General Appropriations Act; a non-existent program cannot be funded by savings. While approving officers may be liable for bad faith or gross negligence for violating clear rules, they may be excused from returning disallowed amounts if the recipients have already been absolved, especially when the disbursement ultimately benefited the agency and served social justice considerations.