Abejo v. Commission on Audit
REITERATIONFacts
The Antecedents: Between January 2008 and December 2010, Bernadette Lourdes B. Abejo (Abejo), acting as the Executive Director of the Inter-Country Adoption Board (ICAB), approved the payment of Collective Negotiation Agreement (CNA) incentives and Christmas tokens to members of the ICAB and the Inter-Country Placement Committee (ICPC), totaling PHP 355,000.00. The Commission on Audit (COA) later scrutinized these payments, asserting they lacked legal basis and violated Administrative Order No. 135 and Presidential Decree No. 1597. Procedural History: On April 4, 2011, the COA issued Notice of Disallowance (ND) No. 2011-010-101-(08-10), holding Abejo solely liable for the full amount. Abejo appealed to the COA Director, arguing she acted in good faith and that the tokens were in recognition of services rendered, but the Director denied the appeal in 2016. Abejo then filed a Petition for Review with the COA Proper, which affirmed the disallowance in Decision No. 2019-347, ruling that the tokens were not authorized by the General Appropriations Act (GAA) and that Abejo, as a lawyer and head of agency, could not invoke good faith. The Petition: Abejo filed a Petition for Certiorari under Rule 64 in relation to Rule 65 before the Supreme Court, maintaining that the grant of Christmas tokens had legal basis under Republic Act No. 6686 and Department of Budget and Management (DBM) Budget Circular No. 2010-01. She further argued that she acted in good faith and should be absolved from the solidary liability to refund the disallowed amount, especially since the payees themselves were not held liable by the COA.
Issue(s)
Whether the Commission on Audit committed grave abuse of discretion in affirming the disallowance of the Christmas tokens. Whether petitioner Abejo should be held solidarily liable to return the disallowed amount of PHP 355,000.00.
Ruling
The Petition is PARTIALLY GRANTED. The Supreme Court AFFIRMED the disallowance of the PHP 355,000.00 but MODIFIED the liability, ABSOLVING Bernadette Lourdes B. Abejo from her solidary liability to return the disallowed amount.
Ratio Decidendi
On Issue 1: The Court sustained the disallowance, ruling that the payment of Christmas tokens constituted an irregular expenditure. Under Section 3 of Republic Act No. 6686, any amount granted as a Christmas bonus must be specifically included in the annual General Appropriations Act (GAA). The fundamental principle of government finance, as stated in Section 4(1) of Presidential Decree No. 1445, mandates that no money shall be paid out of the public treasury except in pursuance of an appropriation law or specific statutory authority. In this case, the petitioner failed to prove that the tokens were authorized by any appropriation law or that they were included in the ICAB's budget for the relevant years. Consequently, the COA did not abuse its discretion in classifying the expenditure as irregular and upholding the Notice of Disallowance. On Issue 2: While the disallowance was proper, the Court ruled that Abejo cannot be held liable for the refund. Applying the 'Madera Rules' and the clarification in Juan v. Commission on Audit, the solidary liability of an approving officer is limited to the 'net disallowed amount.' This is defined as the total disallowed amount minus any amounts allowed to be retained by the payees. Here, the COA's Notice of Disallowance identified the payees but held only Abejo liable; the payees were never made parties to the case nor ordered to return the funds. Because the payees are effectively excused from returning the amounts they received, the 'net disallowed amount' is reduced to zero. Furthermore, the Court applied the doctrine of stare decisis, noting a previous 2022 decision (Abejo v. COA, G.R. No. 251967) involving the same parties and similar facts where Abejo was also absolved from liability. Adherence to judicial precedent ensures certainty and stability in the law.
Main Doctrine
The doctrine of 'net disallowed amount' dictates that the civil liability of approving and certifying officers under Section 43, Book VI of the 1987 Administrative Code must correspond to the amount payees are actually required to return. If payees are absolved or excused from liability—whether by the Court's discretion or by procedural omission in the Notice of Disallowance—the solidary liability of the approving officers must be reduced by those excused amounts. This ensures that the public accountability framework does not result in an unjust enrichment of the government at the expense of the officer when the actual recipients are permitted to retain the funds.