Pastrana v. Commission on Audit
REITERATIONFacts
1. The Antecedents: The Land Registration Authority (LRA) and its employees' union, Gabay ng LRA Inc., entered into a Collective Negotiation Agreement (CNA) that included provisions for granting incentives to officers and employees, sourced from savings from Maintenance and Other Operating Expenses (MOOE) allotments. This agreement led to the issuance of Administrative Order No. 2009-16 and a subsequent Memorandum authorizing the payment of P15,000.00 per employee as a CNA incentive for calendar year 2009. However, the payment was disallowed by the Commission on Audit (COA) due to alleged violations of existing rules and regulations regarding the source and determination of such incentives. 2. Procedural History: The payment of CNA incentives was disallowed by Audit Team Leader Lolita A. Marquez and Supervising Auditor Herminio B. Cueto through Notice of Disallowance No. 2011-001-151(10) dated January 6, 2011. Gabay ng LRA Inc. appealed this disallowance to the COA-National Government Sector-Cluster B, which affirmed the disallowance in Decision No. 2012-003. A subsequent petition for review before the COA Proper was dismissed for being filed out of time. However, a motion for reconsideration was partly granted, affirming the disallowance but excusing the payee-recipients from refunding the incentives due to good faith, while holding the recommending, certifying, and approving officers liable. 3. The Petition: Petitioners Ser John Pastrana, Vivian Veridiano Dacanay, Norlyn Tomas, and Mary Jane G. Ysmael filed petitions for Certiorari under Rule 64 in relation to Rule 65 of the Rules of Court, assailing the COA's decisions. The petitioners argued that they should not be held liable for the refund due to their good faith and limited roles in the process. Specifically, Pastrana, Dacanay, and Tomas claimed they lacked knowledge of budget formulation and their participation was limited to ensuring fair distribution, while Ysmael asserted her role was merely to certify the completeness of supporting documents. The COA, through the Office of the Solicitor General, countered that the petitioners, as representatives and officers, were presumed to know the relevant laws and regulations and actively participated in the illegal disbursement.
Issue(s)
Whether or not the Commission on Audit acted with grave abuse of discretion amounting to lack or excess of jurisdiction in finding petitioners liable for the refund of the disallowed CNA incentive. Whether petitioners Pastrana, Dacanay, and Tomas are liable for the return of the disallowed CNA incentive, considering their alleged good faith and limited participation. Whether petitioner Ysmael is liable for the return of the disallowed CNA incentive, considering her role as Chief Administrative Officer and her certification of the obligation request.
Ruling
The petitions are bereft of merit. The Court affirms with modification the decision of the Commission on Audit, holding the petitioners solidarily liable to return the net disallowed amount.
Ratio Decidendi
On the issue of whether the COA acted with grave abuse of discretion: The Court found that the COA did not act with grave abuse of discretion. The payment of the CNA incentive was correctly disallowed in audit because it violated established policies and guidelines. Specifically, the savings from which the incentive was sourced were not clearly demonstrated to have originated from cost-cutting measures as required by PSLMC Resolution No. 4, AO No. 135, and DBM Budget Circular No. 2006-1. Furthermore, the guidelines for the payment of the incentive were not embodied in a written resolution signed by both management and employee representatives, as mandated by DBM Budget Circular No. 2006-1. The LRA's special provision under the 2009 GAA also required the submission of a special budget and adherence to DBM guidelines, which were not shown to have been complied with. The release of the incentive was inconsistent with existing policies and regulations, and did not represent an efficient utilization of public funds. On the liability of petitioners Pastrana, Dacanay, and Tomas: The Court held that petitioners Pastrana, Dacanay, and Tomas are liable for the return of the disallowed amount due to gross negligence. As designated representatives in the Employees' Organization-Management Consultative Committee, they were expected to ensure compliance with guidelines for the CNA incentive, including the determination of savings and the proper documentation of agreements. Their failure to present a consensus in a written resolution, and their participation in the process where guidelines were issued solely by Administrator Ulep, demonstrated a deliberate disregard of existing policy and procedural guidelines. This conduct negates their claim of good faith and constitutes gross negligence, defined as the want of even slight care or acting with conscious indifference to consequences. On the liability of petitioner Ysmael: The Court found petitioner Ysmael liable for the return of the disallowed amount. Her assertion that she merely affixed her signature to the obligation request without verifying the supporting documents was rejected. By signing the obligation request, she certified that the charges were necessary, lawful, and supported by valid documents. Her signature indicated her cognizance of the allotment's availability and the obligation's details, and that the supporting documents were complete and satisfactory. Her failure to carefully examine these documents, which did not comply with the requirements for CNA incentive payments, amounted to gross negligence. Accepting her contention would imply that a senior officer routinely signs critical documents without due diligence, which is contrary to the expected standard of care in handling public funds. The Court applied the rules established in Madera v. Commission on Audit. While recipients who received the incentive in good faith were excused from refunding, the petitioners, as approving and certifying officers, were found to have acted with gross negligence. Therefore, they are liable for the return of the disallowed amounts. The Court clarified that while the COA had absolved the payee-recipients, the petitioners, having acted in bad faith or with gross negligence, cannot avail of equitable exceptions. They are solidarily liable to return the net disallowed amount, which is the total disallowed amount minus the amounts received by those absolved by the COA.
Main Doctrine
Public officials who act with gross negligence in the performance of their duties, particularly in disregarding established laws, rules, and regulations concerning the disbursement of government funds, are personally liable for the return of disallowed amounts, even if they were also recipients of such funds. The presumption of good faith is overturned by a clear showing of bad faith, malice, or gross negligence.