Abejo v. Commission on Audit
CLARIFICATIONFacts
The Antecedents: From 2008 to 2011, the Inter-Country Adoption Board (ICAB) granted Collective Negotiations Agreement (CNA) Incentives to its employees pursuant to Department of Budget and Management Budget Circular (DBM BC) No. 2006-1 and their Collective Negotiations Agreement. Section 5.7 of DBM BC No. 2006-1 stipulated that CNA Incentives should be a one-time benefit paid after the end of the year, provided planned programs were implemented. DBM BC No. 2011-5, issued on December 26, 2011, restricted the grant of CNA Incentives to P25,000.00 per qualified employee. Prior to this, there was no fixed limit. In 2011, ICAB made an initial payment of CNA Incentives on November 28, 2011, and a final payment on December 23, 2011, after determining that all programs were implemented. These payments were made twice and exceeded the P25,000.00 ceiling set by DBM BC No. 2011-5. Procedural History: On post-audit, the audit team observed that ICAB paid CNA Incentives twice for 2011, contrary to DBM BC No. 2006-1, and the amount exceeded the P25,000.00 ceiling under DBM BC No. 2011-5. Petitioner Bernadette Lourdes B. Abejo, Executive Director of ICAB, explained that they could not have foreseen the issuance of DBM BC No. 2011-5 before the year ended. Notice of Disallowance (ND) No. 2012-002-101-(11) dated February 28, 2012, was issued, disallowing the excess grant of CNA Incentives amounting to P236,500.00. Petitioner, along with other officers and payees, was found liable. Petitioner appealed the ND. The COA – National Government Sector, through Director Cora Lea A. Dela Cruz, affirmed the ND in Decision No. 2015-020 dated December 14, 2015. On further appeal, the COA Proper, under Decision No. 2020-127 dated January 27, 2020, also affirmed the disallowance. The Petition: Petitioner Bernadette Lourdes B. Abejo sought affirmative relief from the Supreme Court via a petition for certiorari under Rule 64 of the Rules of Civil Procedure. She charged the COA with grave abuse of discretion amounting to excess or lack of jurisdiction. She essentially reiterated her arguments that DBM BC No. 2011-5 was issued after the payments were made, the P25,000.00 limit did not apply under DBM BC No. 2006-1, payments were made in good faith after determining sufficient savings and project completion, and she was not negligent in approving the payments.
Issue(s)
Did the Decision No. 2020-127 dated January 27, 2020 of the Commission on Audit (COA) Proper validly disallow the payment of Collective Negotiations Agreement (CNA) Incentives to the qualified employees of the Inter-Country Adoption Board (ICAB) in the amount of P236,500.00? Is petitioner, as approving authority, solidarily liable to refund the disallowed amount? Is petitioner, as recipient of the Collective Negotiations Agreement (CNA) Incentive, personally liable to return the alleged excess amount she had received?
Ruling
The Supreme Court AFFIRMED with MODIFICATION the Decision No. 2020-127 dated January 27, 2020, of the Commission on Audit. Petitioner Bernadette Lourdes B. Abejo is ABSOLVED from solidary liability to return the entire disallowed amount, as well as from personal liability to return the excess amount she received under Notice of Disallowance No. 2012-002-101-(11) dated February 28, 2012.
Ratio Decidendi
On Issue 1: The Supreme Court held that the disallowance was valid. The ICAB violated Section 5.7 of DBM BC No. 2006-1, which requires CNA Incentives to be a one-time benefit paid after the end of the year. Petitioner approved double payments of CNA Incentives in November and December 2011, both before the year ended. Had the ICAB waited, it would have been informed of DBM BC No. 2011-5, which set the P25,000.00 limit, thus avoiding overpayment. The Court noted that DBM BC No. 2011-5 was relevant for determining the extent of overpayment, but the violation of DBM BC No. 2006-1's conditions for payment independently warranted disallowance. Therefore, the ICAB's violations of both DBM BC Nos. 2006-1 and 2011-5 justified the disallowance of the excessive payment of CNA Incentives. On Issue 2: The Supreme Court ruled that petitioner, as approving authority, is not solidarily liable to return the entire disallowed amount in the absence of malice, bad faith, or gross negligence. Citing Madera, et. al. v. COA, the Court reiterated that approving officers who acted in good faith, in regular performance of official functions, and with the diligence of a good father of the family are not civilly liable. The Court found that petitioner's failure to observe DBM BC No. 2006-1 did not rise to the level of gross negligence, which requires a conscious indifference to consequences. The Court drew a parallel to Montejo v. Commission on Audit, where a similar erroneous interpretation of DBM BC No. 2006-1 in 2011 was excused due to the absence of clarificatory jurisprudence at the time. Petitioner honestly believed that the savings could be used for CNA Incentives after project completion, which, though erroneous, was not indicative of gross negligence. On Issue 3: The Supreme Court held that petitioner, as a recipient, is not personally liable to return the excess amount she received. Applying the refined Rules on Return from Abellanosa v. COA, the Court stated that for amounts to be genuinely given in consideration of services rendered, two requisites must concur: (a) the benefit has a proper basis in law but is disallowed due to merely procedural irregularities, and (b) it has a clear, direct, and reasonable connection to the actual performance of the payee-recipient's official work. The Court found that the grant of CNA Incentives has a proper basis in law (DBM BC Nos. 2006-1 and 2011-5) and was disallowed due to procedural irregularities (misinterpretation of payment timing). Furthermore, CNA Incentives have a direct connection to performance, as they are paid from savings generated by cost-cutting and systems development, and require prior implementation and completion of planned programs. Thus, the conditions for excusing the return of the excess amount received by petitioner were met.
Main Doctrine
The Supreme Court clarified the Rules on Return for disallowed amounts, particularly regarding the liability of approving officers and recipients. Approving officers are absolved from solidary liability if they acted in good faith, without malice or gross negligence, even if their interpretation of regulations was erroneous, especially in the absence of clarificatory jurisprudence. For recipients, disallowed amounts may be excused if they were genuinely given in consideration of services rendered, provided the benefit had a proper legal basis but was disallowed due to merely procedural irregularities, and it had a clear, direct, and reasonable connection to the actual performance of the payee-recipient's official work and functions.