Cadiao v. Commission on Audit
REITERATIONFacts
The Antecedents: The case concerns a Notice of Disallowance (ND) issued by the Commission on Audit (COA) for P2,950,000.00, representing financial assistance granted to the Liga ng mga Barangay, Antique Chapter, for the payment of insurance premiums for its Punong Barangays. The disallowance was based on the grounds that the insurance coverage was already provided by the Government Service Insurance System (GSIS) under Republic Act No. 7160, that the funds were not a proper charge to the 20% development fund as per DILG-DBM Joint Memorandum Circular No. 1, s. 2005, and that the Sangguniang Panlalawigan (SP) lacked the authority to provide such group insurance. Procedural History: The disallowance was issued by the Audit Team Leader and Supervising Auditor on June 8, 2011. Certain SP members appealed their inclusion as liable parties to the COA Regional Office (COA RO), which excluded them and another member, citing their lack of participation or dissenting votes. The COA RO's decision was subject to automatic review by the Commission Proper. The Commission on Audit (COA) affirmed the COA RO's decision in part but denied the petitioner's subsequent motion for reconsideration, holding her liable. The petitioner then filed the instant petition for certiorari with the Supreme Court. The Petition: The petitioner, Rhodora J. Cadiao, then Vice-Governor of Antique and presiding officer of the SP, seeks to nullify the COA's decision and resolution holding her liable for the disallowed amount. She argues that her participation was limited to her role as presiding officer, that she did not vote for or against the resolution, and merely attested to its passage. She contends that as presiding officer, she was not required to vote unless there was a tie, and since no tie occurred, she should not be held liable. The petition asserts that the COA acted with grave abuse of discretion in including her among the persons liable, as her signature attested to the regularity of official functions and not to personal endorsement of the transaction's propriety without any showing of bad faith, malice, or gross negligence.
Issue(s)
Whether the Commission on Audit acted with grave abuse of discretion in holding petitioner Rhodora J. Cadiao liable for the disallowed amount, considering her role and participation. Whether petitioner's appeal to the Commission on Audit was timely filed.
Ruling
The petition is meritorious. The Supreme Court GRANTED the petition, REVERSED, and SET ASIDE the Decision and Resolution of the Commission on Audit, absolving petitioner Rhodora J. Cadiao from liability for the disallowed amount.
Ratio Decidendi
On the issue of liability and grave abuse of discretion: The Court ruled that petitioner, as the Vice-Governor and presiding officer of the Sangguniang Panlalawigan (SP), should not be held liable because Section 49 of Republic Act No. 7160 (Local Government Code) explicitly states that the presiding officer votes only to break a tie, which did not occur in this case. The Court emphasized that liability is determined by the nature of the disallowance, duties, responsibilities, and extent of participation, and that her mere signature, without bad faith, malice, or gross negligence, does not create liability. There was no showing that she was ill-motivated or personally profited from the transaction. The Court concluded that the COA committed grave abuse of discretion in holding petitioner personally liable, as their reliance solely on her attestation and statements as presiding officer, without considering the specific voting outcome and the absence of a tie, was an arbitrary exercise of power. On the timeliness of the appeal: The Court held that petitioner's appeal was timely. The decision of the COA Regional Office (RO) was subject to automatic review by the Commission Proper (COA) because it modified the original Notice of Disallowance (ND) by excluding certain individuals from liability. As the COA RO's decision was not yet final and executory, the subsequent motion for reconsideration filed by the petitioner was not superfluous. This aligns with the principle that decisions subject to automatic review do not attain finality until reviewed by the higher body.
Main Doctrine
A presiding officer, such as a Vice-Governor acting as the presiding officer of a Sanggunian, cannot be held liable for a disallowed transaction solely by reason of attesting to the passage of a resolution, especially when the resolution received the required affirmative votes and there was no tie to break, absent any showing of bad faith, malice, or gross negligence.