Johanson v. Villafuerte
REITERATIONFacts
The Antecedents: The underlying dispute concerns the disbursement of P1,412,839.00 by the Provincial Government of Camarines Sur for additional allowances to barangay officials and other personnel in fiscal year 2015. This disbursement was authorized by Sangguniang Panlalawigan Ordinance No. 039 and Resolution No. 516. The Commission on Audit (COA) Audit Group LGS-C, Province of Camarines Sur, issued an Audit Observation Memorandum (AOM) noting that the payment to barangay officials violated Budget Circular No. 63, and the necessity of allowances to other selected officials could not be ascertained due to incomplete documentation. Procedural History: Following the AOM, the COA issued Notice of Disallowance (ND) No. 2016-002-100(2015) disallowing the P1,412,839.00 and holding respondent, then Governor Miguel Luis R. Villafuerte, and others liable. Respondent filed a petition for certiorari under Rule 65 of the Rules of Court before the Regional Trial Court (RTC) of Pili, Camarines Sur. The RTC, in its decision dated April 25, 2019, partially granted the petition, affirming the disallowance but absolving respondent of personal liability due to the absence of malice or bad faith. Petitioners, the COA auditors, then filed the present petition for review on certiorari with the Supreme Court. The Petition: The petitioners are seeking a review on certiorari under Rule 45 of the Rules of Court, assailing the RTC's decision. They argue that the RTC erred in taking cognizance of the petition for certiorari, as the proper remedy to assail a COA notice of disallowance is through an appeal within the COA's administrative process, culminating in a petition for certiorari to the Supreme Court, not the RTC. Petitioners also contend that the grant of allowances violated Section 468(1) of R.A. No. 7160 and that respondent should be held solidarily liable. The core issue before the Supreme Court is whether the RTC had jurisdiction to entertain the petition for certiorari against the COA's Notice of Disallowance.
Issue(s)
Whether a petition for certiorari is the proper mode of review to assail a Notice of Disallowance by the COA. Whether the grant of additional allowance to barangay health workers, barangay officials, barangay tanods, day care workers and barangay nutrition scholars violated Section 468(1)(XI) of R.A. No. 7160. Whether respondent is solidarily liable for the disallowed amount.
Ruling
The Supreme Court granted the petition, set aside the RTC decision, and reinstated Notice of Disallowance No. 2016-002-100(2015) as originally worded. The Court held that the RTC erred in taking cognizance of the petition for certiorari due to lack of jurisdiction, rendering its decision void.
Ratio Decidendi
On the propriety of the remedy: The Supreme Court reiterated that a petition for certiorari under Rule 65 is not the proper remedy to assail a Notice of Disallowance (ND) issued by a Commission on Audit (COA) Auditor. The established procedure requires the aggrieved party to exhaust administrative remedies by appealing to the COA Director, then to the Commission Proper, before resorting to judicial review. This procedural framework is anchored on Section 7, Article IX-A of the Constitution and Section 50 of P.D. No. 1445, which vest the Supreme Court with exclusive certiorari jurisdiction over COA decisions. The RTC, therefore, lacked subject matter jurisdiction to entertain the petition for certiorari filed by the respondent. Consequently, the RTC's decision was void for having been rendered without jurisdiction. The Court emphasized that the COA, as an independent constitutional commission, has exclusive authority to define the scope of its audit and promulgate accounting and auditing rules. Its auditors are empowered to issue NDs, which are considered audit decisions. While these decisions may involve questions of law, the procedural rules established by the COA and P.D. No. 1445 mandate an internal appeal process within the COA itself before any judicial recourse can be taken. The RTC's general jurisdiction to issue writs of certiorari, as provided in B.P. 129, must yield to the specific constitutional and statutory provisions granting exclusive certiorari jurisdiction to the Supreme Court over COA decisions. Therefore, the RTC erroneously took cognizance of the case. On the violation of Section 468(1)(XI) of R.A. No. 7160: The provided text does not contain any ratio decidendi related to whether the grant of additional allowance to barangay health workers, barangay officials, barangay tanods, day care workers and barangay nutrition scholars violated Section 468(1)(XI) of R.A. No. 7160. Therefore, I cannot provide a corresponding ratio for this issue. On the finality of the Notice of Disallowance: The Court held that the Notice of Disallowance No. 2016-002-100(2015) became final and immutable when the respondent failed to file an appeal in accordance with the COA Rules within the prescribed six-month period. The respondent's resort to a petition for certiorari with the RTC, a court without jurisdiction, did not toll the period for appeal. It is a settled rule that the perfection of an appeal within the reglementary period is jurisdictional, and failure to do so renders the decision final and unappealable. Once a decision becomes final and executory, it is immutable and unalterable.
Main Doctrine
A petition for certiorari under Rule 65 of the Rules of Court is not the proper remedy to assail a Notice of Disallowance issued by a Commission on Audit (COA) Auditor. The aggrieved party must exhaust administrative remedies by appealing to the COA Director, then to the Commission Proper, before resorting to judicial review by filing a petition for certiorari with the Supreme Court under Rule 64 in relation to Rule 65.