Philippine Charity Sweepstakes Office v. Commission on Audit
REITERATIONFacts
The Antecedents: In November 2010, the Philippine Charity Sweepstakes Office (PCSO) Laguna Provincial District Office (LPDO) granted several monetary benefits to its personnel, including a Christmas Bonus equivalent to three months' basic salary, a Weekly Draw Allowance, a Staple Food Allowance, Hazard Pay, and a Cost of Living Allowance (COLA). Upon audit, these payments were disallowed by the Audit Team Leader through three separate Notices of Disallowance (NDs) totaling P1,601,066.89. The disallowances were based on the lack of legal basis, as the benefits were purportedly derived solely from a Collective Negotiation Agreement (CNA) between the PCSO and its employees' union, and in the case of COLA, it was argued that it had already been integrated into the basic salary by Republic Act No. 6758 (Salary Standardization Law). Procedural History: Following the issuance of the Notices of Disallowance, the PCSO-LPDO failed to file an appeal within the prescribed period, leading to a Notice of Finality of Decision. However, upon a claim of inadvertence and citing a supposed post facto approval from the Office of the President, the PCSO sought reconsideration. The Commission on Audit (COA) Assistant Commissioner granted this request, allowing the appeal to be considered. The COA Regional Office affirmed the disallowances. The PCSO then filed a petition for review with the COA Proper, which initially dismissed it for being out of time but later reconsidered and resolved the case on its merits. The COA Proper affirmed the disallowances, ruling that the PCSO Charter did not grant absolute authority to the PCSO Board to fix benefits and that the alleged post facto approval was invalid. The employee-recipients were, however, excused from returning the amounts received in good faith, with liability placed on the approving/certifying officers. The Petition: The petitioners, including officials of the PCSO, filed a Petition for Certiorari under Rule 64, in relation to Rule 65, of the Rules of Court, assailing the decision and resolution of the COA Proper. They argued that the COA Proper erred in dismissing their petition for review for being filed out of time, contending that since their late appeal was initially allowed, the petition should have been decided on the merits. Regarding the disallowed benefits, they maintained that the PCSO Board had the power to grant them under RA No. 1169, supported by a post facto presidential approval, and that disallowing them would violate the principle of non-diminution of benefits. They also claimed that the approving officers acted in good faith and should not be held liable for returning the disallowed amounts. The core of their argument was that the COA committed grave abuse of discretion in upholding the disallowances and in holding the approving officers liable.
Issue(s)
Whether the COA Proper erred in dismissing the petition for review for being filed out of time. Whether the PCSO Board has the authority to grant the disallowed benefits. Whether the alleged post facto approval from the Office of the President validates the disallowed benefits. Whether the disallowance of the benefits violates the principle of non-diminution of benefits. Whether the approving/certifying officers are liable to return the disallowed amounts.
Ruling
The petition is dismissed. The Decision and Resolution of the Commission on Audit are affirmed with modification. Petitioners are solidarily liable to return the net disallowed amount. The Commission on Audit is directed to compute the correct amount of the disallowed benefits to be returned.
Ratio Decidendi
On the timeliness of the petition for review: The Court held that the COA Proper did not err in dismissing the petition for review for being filed out of time, as the relaxation of procedural rules requires valid reasons. However, the COA did relax its rules by allowing the appeal on the merits, and the arguments on the merits were sufficiently discussed and considered. On the authority of the PCSO Board to grant benefits: The Court reiterated that the PCSO Board's power to fix salaries and benefits is not absolute and is subject to pertinent civil service and compensation laws. RA 1169 does not grant unbridled authority, and the PCSO must observe laws relating to disbursement of public funds. Previous rulings have established that the PCSO Board's power is subject to review by the Department of Budget and Management (DBM). On the alleged post facto approval: The Court consistently rejects post facto approval to justify disallowed disbursements. The letter from the Office of the President was found to be vague and did not specifically approve all past grants. Furthermore, the benefits in question were granted after the period covered by the alleged approval, rendering it invalid. On the principle of non-diminution of benefits: The Court found no merit in this argument, as the PCSO failed to prove that the disallowance resulted in a diminution of benefits. The principle of non-diminution applies only if employees were incumbents and receiving the benefits as of July 1, 1989, and if the benefits were not integrated into standardized salary rates. Practice, no matter how long, cannot give rise to vested rights if contrary to law. On the liability of approving/certifying officers: The Court affirmed the disallowance of the benefits. While recipients may be excused from returning amounts received in good faith, approving and certifying officers who acted with gross negligence are solidarily liable to return the net disallowed amount. The Court found the petitioners to be grossly negligent for failing to observe clear legal provisions regarding the disbursement of benefits, thus they cannot claim good faith or benefit from equitable exceptions. They are liable under Section 43 of the Administrative Code.
Main Doctrine
Approving and certifying officers who are grossly negligent in approving disallowed benefits are solidarily liable to return the net disallowed amount, even if recipients are excused from returning the amounts received in good faith. Post facto approval cannot validate benefits granted in violation of law.