Bugna v. Commission on Audit
REITERATIONFacts
The Antecedents: The underlying dispute concerns the disallowance of Economic Crisis Assistance (ECA) and Monetary Augmentation of Municipal Agency (MAMA) allowances granted to municipal employees of Mondragon, Northern Samar. These allowances were authorized by Resolution No. 53 and Resolution No. 55, respectively, passed by the Sangguniang Bayan on December 10, 2012, and funded by Ordinance No. 07. Subsequently, on February 20, 2014, the Audit Team Leader issued Notices of Disallowance (ND) No. 14-001-101 (2012), ND No. 14-002-101 (2012), and ND No. 14-003-101 (2012) for amounts totaling P2,866,139.54, citing violations of Republic Act No. 6758 and Civil Service Commission Resolution No. 02-0790. Procedural History: Petitioners, including municipal officials, appealed the notices of disallowance to the COA Regional Office No. VIII, which denied their appeal on July 14, 2015. Petitioners then filed a Notice of Appeal to the COA Proper on August 12, 2015. On December 28, 2017, the COA Proper issued a Decision dismissing the appeal for being filed out of time, a ruling affirmed by a subsequent Resolution on January 29, 2020, after the petitioners' motion for reconsideration was denied. The COA found that the appeal to the Regional Office was filed 267 days after receipt of the NDs and that the ECA and MAMA lacked sufficient basis. The Petition: Petitioners filed the instant petition for certiorari under Rule 64 in relation to Rule 65 of the Rules of Court, seeking to set aside the COA's Decision and Resolution. They invoke good faith, arguing that the allowances had been customarily granted and that they had no prior disallowances. They contend that illegality does not automatically imply a failure to exercise ordinary diligence. The core issue presented to the Supreme Court is whether the COA committed grave abuse of discretion in denying the appeal and upholding the disallowances, particularly in light of the petitioners' defense of good faith and reliance on local ordinances and resolutions.
Issue(s)
Whether the Commission on Audit (COA) committed grave abuse of discretion in denying the appeal filed by petitioners for being filed out of time. Whether the COA committed grave abuse of discretion in upholding the notices of disallowances issued against the grant of the Economic Crisis Assistance (ECA) and Monetary Augmentation of Municipal Agency (MAMA) to municipal employees, and whether the petitioners are liable for the disallowed amounts.
Ruling
The Supreme Court PARTIALLY GRANTED the petition, AFFIRMED with MODIFICATION the COA Decision and Resolution, and found the petitioners ABSOLVED from civil liability for the disallowed amount.
Ratio Decidendi
On the issue of the timeliness of the appeal: The Court acknowledged that the petition should have been dismissed outright for being filed out of time, as the petitioners failed to comply with the reglementary period and did not provide justification for the delay. The right to appeal is statutory and its perfection within the prescribed period is mandatory and jurisdictional. However, the Court invoked its equity jurisdiction to set aside technicalities and serve the demands of substantial justice, particularly in cases involving disallowances of public funds. The Court noted that this case was intertwined with a prior petition questioning a COA decision concerning similar disallowances in the same municipality, thus warranting an exception to the strict rule on timeliness to ensure consistency with prevailing jurisprudence. On the issue of the disallowances and petitioners' liability: While the Court upheld the propriety of disallowing the ECA and MAMA for lack of legal support, it found that the petitioners, as approving and certifying officers, acted in good faith and should be excused from returning the disallowed amounts. The Court applied the rubrics laid down in Madera v. Commission on Audit, which distinguish between officers acting in good faith and those acting in bad faith, malice, or gross negligence. The Court found that the petitioners acted in good faith based on several circumstances: (1) the noble intention behind the allowances as financial assistance during a period of economic hardship and after a typhoon; (2) the customary grant of such allowances over the years without prior disallowance, leading them to believe they were lawful; and (3) their reliance on the Sangguniang Bayan Resolutions and Ordinance, which had not been invalidated. The Court emphasized that mistakes committed without a clear showing of malice, gross negligence, or dishonest purpose are not actionable. Consequently, the petitioners were absolved from civil liability under Section 38 of the Administrative Code of 1987. The Court also noted that the payees had already been excused from returning the amounts by the COA Proper, and this was maintained due to undue prejudice and social justice considerations.
Main Doctrine
While the right to appeal is statutory and must be strictly followed, the Court may exercise its equity jurisdiction to set aside technicalities and afford substantial justice, especially when the disallowance of public funds is involved and the approving officers acted in good faith.