Republic of the
Supreme Court
EN BANC
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RONNIE
H. LUMAYNA, |
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G.R.
No. 185001 |
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ROMEO
O. CHULANA, |
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HELEN
A. BONHAON, |
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Present: |
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PETER
G. LAHINA, JR., |
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JUANITO
O. LICHNACHAN, JR., |
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PUNO,*
C. J., |
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SAMMY
C. CHANG-AGAN, |
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QUISUMBING,* |
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BONIFACIO
L. BAICHON, |
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YNARES-SANTIAGO,** |
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REYNALDO
B. UCHAYAN, |
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CARPIO,* |
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JOHN
L. MARTIN, |
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AUGUSTA
C. PANITO, |
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CARPIO
MORALES, |
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ROSENDO
P. BONGYO, JR., |
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CHICO-NAZARIO, |
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KLARISA
MAE C. CHAWANA, |
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VELASCO,
JR., |
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Petitioners, |
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NACHURA, |
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LEONARDO-DE
CASTRO, |
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BRION,
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PERALTA, |
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- versus - |
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BERSAMIN, |
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ABAD,
JJ. |
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COMMISSION
ON AUDIT, |
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Promulgated: |
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Respondent. |
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September
25, 2009 |
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D E C I S I O N
Assailed
in this Petition for Certiorari under Rule 64 in relation to Rule 65 of
the Rules of Court is the Decision No. 2005-071[1]
dated 29 December 2005 of the Commission on Audit (COA) affirming the Notice of
Disallowance[2] of the
5% salary increase of the municipal personnel of the Municipality of Mayoyao,
Ifugao covering the period 15 February to 30 September 2002, in the amount of P895,891.50,
and requiring petitioners to refund the same.
Also assailed is the COA Decision No. 2007-040[3]
dated
On
On 13 May
2002, the Sangguniang Bayan of Mayoyao, Ifugao, (Sangguniang
Bayan) enacted Resolution No. 41, s. 2002,[6] approving
the 2002 Annual Municipal Budget, and appropriating the amount of P1,590,376.00
thereof for the salaries and benefits of 17 newly created positions in the
municipality.[7] Upon
review by the Sangguniang Panlalawigan of the Province of Ifugao
(Sangguniang Panlalawigan), the 2002 Annual Municipal Budget of
Mayoyao, Ifugao was declared operative subject to the conditions that the
creation of 17 new positions shall in no case be made retroactive and that the
filling up of such positions be made strictly in accordance with the Civil
Service rules and regulations.[8]
On P1,936,524.96[10]
from the 2002 municipal budget originally appropriated for the salaries and
benefits of the 17 new positions.[11]
On 12 July
2002, DBM issued Local Budget Circular No. 75[12]
(LBC No. 75) providing guidelines on personal services limitation, pursuant to
Section 325(a) of the Local Government Code of 1991 (LGC).
On
On
Meanwhile,
the Regional Legal and Adjudication Office (RLAO) of the COA-Cordillera
Administrative Region (COA-CAR) issued a Notice of Disallowance dated P895,891.50, representing payments for salary increases of municipal
personnel, for the period 15 February -
Helen A. Bonhain – Budget Officer
Peter G. Lahina, Jr. – Municipal Accountant
Ronnie H. Lumayna – Municipal Mayor
Romeo O. Chulana
Juanito O. Lichnachan, Jr.
Sammy C. Chang-agan
SB Members who approved
Resolution No. 94, s. 2002
Bonifacio L. Baichon
Reynaldo B. Uchayan
John L. Martin
Augusta C. Panitio
Rosendo P. Bongyo, Jr.
Klarisa Mae C. Chawana
Petitioners requested a
reconsideration, which was denied on
Hence, petitioners filed a Petition
for Review before respondent COA assailing LAO-Local Decision No.
2003-104.
On P895,891.50. The COA
held thus:
After a careful evaluation, this Commission
answers in the negative subject to the extended discussions hereunder.
Anent
the first assignment of error, the same has been judiciously passed upon in
LAO-Local Decision No. 2003-104. While
the
Anent
the second assignment of error, the same will not suffice to over-turn the
other grounds for the audit disallowance.
The fact remains that the grant of the 5% salary increase contravened
the limitation of the law as explicitly provided under item (a) of section 325 of
R.A. No. 7160.
Anent
the third assignment of error, while the Sanggguniang Panlalawigan of Ifugao,
in its resolution No. 2002-556, has declared operative the 2002 Annual Budget
of Mayoyao, the review of said Sanggunian was only limited to the provisions
stated in the said budget which contained, among others, provisions for the
funding of the 17 newly created positions and not the salary increases. Thus, the declaration of the Sangguniang
Panlalawigan of Ifugao that the 2002 annual budget was operative did not
include the grant of the 5% salary increase because the same was not actually
contained in the said budget but in SB Resolution No. 66, series of 2002.
Anent
the 4th assignment of error, the disallowance is not based solely on
the results of the favorable review of the Sangguniang Panlalawigan of Ifugao
since there are other grounds which would justify and uphold the disallowance. [19]
Petitioners filed a Motion for
Reconsideration but it was denied by respondent COA on
Hence, this petition[21] under Rule 64 of the Rules of Court raising
the
following issues:
1.
RESOLUTION NO. 66, S. 2002 ADOPTING A 5% INCREASE IN
THE SALARY OF THE PERSONNEL OF LGU MAYOYAO PURSUANT TO DBM LBC 74, AND
RESOLUTION NO. 94, S. 2002 PROVIDING THE FUND TO IMPLEMENT THE FORMER ARE VALID
EXERCISES OF LOCAL LEGISLATIVE PREROGATIVE BY THE SANGGUNIANG BAYAN OF MAYOYAO,
IFUGAO. THERE IS SUFFICIENT PROOF THAT
THE BUDGET OF THE
2.
THE PERSONAL SERVICES ALLOCATION FOR THE MUNICIPALITY
OF MAYOYAO, IFUGAO FOR FY 2002 WAS COMPUTED IN ACCORDANCE WITH DBM LBC 74 IN
RELATION TO DBM LBC 69 WHICH WERE THE CIRCULARS IN EFFECT AT THE TIME THE
BUDGET OF THE LGU FOR FY 2002 WAS REVIEWED, APPROVED AND DECLARED OPERATIVE BY
THE SANGGUNIANG PANLALAWIGAN OF THE PROVINCE OF IFUGAO THROUGH RESOLUTION NO.
2002-556. SOON THEREAFTER DBM LBC 75 WAS ISSUED WITH A CLEAR EFFECTIVITY CLAUSE
EXEMPTING FROM ITS OPERATION BUDGETS WHICH HAVE ALREADY BEEN REVIEWED PRIOR TO
ITS ISSUANCE. NOTICE OF DISALLOWANCE (ND) NO. 03-006 DATED
3. PUBLIC OFFICERS ENJOY THE PRESUMPTION OF REGULARITY OF PERFORMANCE OF OFFICIAL FUNCTIONS AND DUTIES. FOR THIS REASON AND MORE, THE HONORABLE SUPREME COURT UPHELD CERTAIN NOTICES OF DISALLOWANCE ISSUED BY THE HONORABLE COMMISSION TO CERTAIN GOVERNMENT AGENCIES BUT DECLINED TO LET THE PERSONS LIABLE THEREFORE TO REFUND THE AMOUNT DISALLOWED ON THE GROUND OF GOOD FAITH. IN RESOLUTION NO. 2004-1185 OF THE SANGGUNIANG PANLALAWIGAN OF IFUGAO RECOGNIZED THE GOOD FAITH OF LGU MAYOYAO AND THE NOBLE INTENTIONS OF THE OFFICERS THEREOF TO GIVE THE EMPLOYEES A DECENT PAY. THE HONORABLE COMMISSION ON AUDIT, THEREFORE GRAVELY ABUSED ITS DISCRETION, WHEN IT FAILED TO CONSIDER THE GOOD FAITH OF THE OFFICERS WHO APPROVED THE QUESTIONED RESOLUTIONS AND DEMANDED THE REFUND BY HEREIN PETITIONERS OF THE WHOLE AMOUNT DISALLOWED THEREIN EVEN IF THE SAID AMOUNTS WERE ALREADY RECEIVED BY THE EMPLOYEES.[22]
The
foregoing boils down to the core issue of whether the COA committed grave abuse
of discretion in affirming the disallowance of the amount of P895,891.50,
representing the 5% salary increase of the personnel of the municipality of
Mayoyao for the period 15 February to 30 September 2002, and in ordering
petitioners to refund the same.
We first
dispense with the procedural issue of whether the petition was timely filed.
Respondent,
through the Office of the Solicitor General, argues that the petition should be
dismissed outright for being filed beyond the reglementary period to appeal.[23] Respondent maintains that since petitioners
received a copy of Decision No. 2005-071 on
On the
other hand, petitioners allege that this argument on belated filing is
misplaced considering that respondent COA already gave due course to their
Motion for Reconsideration, the resolution of which was embodied in its
Decision No. 2007-040. At any rate,
petitioners argue that their failure to file the Motion for Reconsideration
with respondent COA on
Petitioners’
contention has merit. Records show that
COA gave due course to the Motion for Reconsideration without stating in its
Decision No. 2007-040[26] that
it was filed out of time. For this
reason, we find that the issue of whether the petitioners timely filed the Motion
for Reconsideration has become moot.
Going now to the merits of the case, petitioners contend
that Resolution Nos. 66 and 94, s. 2002, are valid exercise of legislative
prerogative in accordance with DBM LBC No. 74, which gave them the authority to
grant a maximum of 5% salary adjustment to personnel in the LGU effective 1 July
2001. Petitioners cite as basis
Resolution No. 2002-556 of the Sangguniang Panlalawigan which declared
as operative the 2002 Annual Budget of the
Petitioners also claim that the amount allocated in the
2002 municipal budget for personal services is within the allowable limits
prescribed by law. In declaring that the
municipality exceeded the personal services limitation set by law, respondent
COA based its finding on a computation using the rates prescribed in LBC No.
75, and not LBC No. 74, in relation to LBC No. 69, on which the municipality
based its computation. Petitioners
further explain that when the municipality enacted Resolution No. 94, s. 2002,
re-aligning the amount appropriated for the 17 newly created positions to the
5% salary increase of the municipal personnel, it did so with the understanding
that the 17 newly created positions were vacated and/or abolished. Thus, the re-alignment of the aforesaid
amount was done without decreasing the whole amount originally earmarked for
personal services.
Claiming
good faith, petitioners insist that Resolution No. 66, s. 2002 was enacted on
We
PARTIALLY GRANT the petition.
The COA disallowed
the amount of P895,891.50 on the ground that the 5% salary increase
exceeded the total allowable appropriations of the municipality for personal
services provided by law, specifically Section 325(a)[27]
of the LGC. It based its finding on the
recomputation made by Ms. Virginia B. Farro, Provincial Budget Officer of
Ifugao, which showed that the Annual Budget of the municipality exceeded the
personal services limit by P3,944,568.05.[28]
According to the COA, the municipality’s budget adopted the salary rates under
LBC No. 69 instead of the salary rates prescribed under LBC No. 74 which is the
applicable circular in this case.[29]
As regards petitioners’ reliance on
Resolution No. 2002-556 of the Sangguniang Panlalawigan, the COA
in its Decision No. 2005-071 made it clear that the review of the 2002
municipal budget by the Sangguniang Panlalawigan was only limited
to the provisions stated in the said budget which contained, among others,
provisions for the funding of the 17 newly created positions, and not its
re-alignment to the 5% salary increase. Consequently, the declaration by the Sangguniang
Panlalawigan in the said Resolution that the 2002 municipal budget was
operative did not include the grant of the 5% salary increase, as the same was
not contained in the said budget but in Resolution No. 66, s. 2002.[30]
We find
that the COA correctly affirmed the disallowance of the amount of P895,891.50.
At the outset, it must be stressed
that factual findings of administrative bodies charged with their specific
field of expertise, are afforded great weight by the courts, and in the absence
of substantial showing that such findings were made from an erroneous
estimation of the evidence presented, they are conclusive, and in the interest
of stability of the governmental structure, should not be disturbed.[31]
In this case, the assailed Decisions
of the COA clearly presented the factual findings and adequately explained the
legal basis for disallowing the said amount. Indeed, as computed by Ms. Virginia Farro, the
Provincial Budget Officer of Ifugao, the annual budget of Mayoyao for 2002
exceeded the limit for personal services as prescribed in Section 325(a) of the
LGC by P3,944,568.05. Further, it
was established that the grant of the increase through the adoption of higher
salary class schedule is not among the list of items and activities whereby the
limitation for personal services may be waived pursuant to LBC No. 75. Finally, the municipality adopted the salary
rates under LBC No. 69 and not the salary rates under LBC No. 74. No grave abuse of discretion amounting to
lack or excess of jurisdiction can thus be attributed to respondent COA. Grave abuse of discretion exists where an act
of a court or tribunal is performed with a capricious or whimsical exercise of
judgment equivalent to lack of jurisdiction, or where the power is exercised in
an arbitrary or despotic manner by reason of passion or personal hostility
which must be so patent and gross as to amount to an invasion of positive duty
or to a virtual refusal to perform the duty enjoined or to act at all in
contemplation of law — mere abuse of discretion is not enough.[32]
However, we find that petitioners
should not be ordered to refund the disallowed amount because they acted in
good faith.
In Abanilla v. Commission on Audit,[33]
the Board of Directors of the Metropolitan Cebu Water District (MCWD) issued
several resolutions giving benefits and privileges to its personnel which
included hospitalization privileges, monetization of leave credits, Christmas
bonus, and longevity allowance. MCWD
likewise entered into a collective bargaining agreement (CBA) with the
employees’ union providing for benefits, such as cash advances, 13th
month pay, mid-year bonus, Christmas bonus, vacation and leave credits,
hospitalization, medicare, uniform privileges and water allowance.
However, the COA disallowed the
amount of P12,221,120.86 representing hospitalization benefits, mid-year
bonus, 13th month pay, Christmas bonus and longevity pay on the ground
that the compensation package of MCWD personnel may no longer be subject of a
CBA, as its officers and employees were covered by the Civil Service laws, and
not by the Labor Code.
On petition for certiorari
before this Court, the disallowance by COA was sustained; however, the MCWD
personnel who received those benefits were no longer required to refund the
same. The Court held, thus:
While we sustain the disallowance of the above benefits by respondent COA, however, we find that the MCWD affected personnel who received the above mentioned benefits and privileges acted in good faith under the honest belief that the CBA authorized such payment. Consequently, they need not refund them.
In Querubin vs. Regional Cluster Director, Legal and Adjudication Office, COA Regional Office VI, Pavia, Iloilo City, citing, De Jesus vs. Commission on Audit, this Court held.:
“Considering, however, that all the parties here acted
in good faith, we cannot countenance the refund of subject incentive benefits
for the year 1992, which amounts the petitioners have already received. Indeed, no indicia of bad faith can be
detected under the attendant facts and circumstances. The officials and chiefs of offices concerned
disbursed such incentive benefits in the honest belief that the amounts given
were due to the recipients and the latter accept the same with gratitude,
confident that they richly deserve such benefits.
x x x.
Petitioners here received the additional allowances and bonuses in good
faith under the honest belief that the LWUA Board Resolution No. 313 authorized
such payment. At the time petitioners
received the additional allowances and bonuses, the Court had not yet decided Baybay
Water District. Petitioners had no
knowledge that such payment was without legal basis. Thus, being in good faith, petitioners
need not refund the allowances and bonuses they received but disallowed by the
COA.”[34]
In Blaquera v. Alcala,[35] petitioners who were officials and
employees of several government agencies were paid productivity incentive
benefits for the year 1992 pursuant to Executive Order No. 292, otherwise known
as the Administrative Code of 1987.
On P1,000.00 and enjoining the grant of said benefit without
prior approval of the President.
Consequently, all agencies that
authorized the payment of productivity incentive benefits for the year 1992 in
excess of P1,000.00 were directed to immediately cause the return/refund
of the excess amount. Thus, respondents
therein caused the deduction, from petitioners’ salaries or allowances, of the
amounts needed to cover the alleged overpayments.
On petition before the Court, it was
held that Administrative Order No. 29 limiting the amount of incentive benefits
and enjoining heads of government agencies from granting incentive benefits
without prior approval of the President, was a valid exercise of the
President’s power of control and authority over executive departments. As regards petitioners’ contention that
respondents should be held personally liable for the refund in question, the
Court held, thus:
Untenable is petitioners’ contention that the herein respondents be held personally responsible for the refund in question. Absent a showing of bad faith or malice, public officers are not personally liable for damages resulting from the performance of official duties.
Every public official is entitled to the presumption of good faith in the discharge of official duties. Absent any showing of bad faith and malice, there is likewise a presumption of regularity in the performance of official duties.
In upholding the constitutionality of AO 268 and AO 29, the Court reiterates the well-entrenched doctrine that “in interpreting statutes, that which will avoid a finding of unconstitutionality is to be preferred.”
Considering, however, that all the parties here acted in good faith, we cannot countenance the refund of subject incentive benefits for the year 1992, which amounts the petitioners have already received. Indeed, no indicia of bad faith can be detected under the attendant facts and circumstances. The officials and chiefs of offices concerned disbursed such incentive benefits in the honest belief that the amounts given were due to the recipients and the latter accepted the same with gratitude, confident that they richly deserve such benefits.[36]
This ruling has been consistently
applied in several cases.[37]
In the instant case, although the 5%
salary increase exceeded the limitation for appropriations for personal
services in the
WHEREAS, the Sangguniang Bayan of Mayoyao however justified that their realignment of the amount of Php 1,936,524.96 and the adoption of a first class salary was done in good faith and with the purpose of giving decent pay to officials and employees of the said Municipality considering the high cost of living;
WHEREAS, this Body finding merit on the justification of the said Municipality hereby reconsiders its earlier stand on the disallowed adoption of a first class salary schedule and the 5% salary increase of the Municipality of Mayoyao, Ifugao;
x x
x x.[39]
Furthermore, granting arguendo that the municipality’s budget
adopted the incorrect salary rates, this error or mistake was not in any way
indicative of bad faith. Under
prevailing jurisprudence, mistakes committed by a public officer are not
actionable, absent a clear showing that he was motivated by malice or gross
negligence amounting to bad faith. It
does not simply connote bad moral judgment or negligence. Rather, there must be some dishonest purpose
or some moral obliquity and conscious doing of a wrong, a breach of a sworn
duty through some motive or intent, or ill will. It partakes of the nature of fraud and contemplates
a state of mind affirmatively operating with furtive design or some motive of
self-interest or ill will for ulterior purposes.[40] As we see it, the disbursement of the 5% salary
increase was done in good faith. Accordingly, petitioners need not refund the
disallowed disbursement in the amount of P895,891.50.
WHEREFORE, the instant Petition is PARTIALLY
GRANTED. The Decision of the Commission
on Audit No. 2005-071 dated P895,891.50, are AFFIRMED
with MODIFICATION that
petitioners need not refund the said disallowed amount of P895,891.50.
SO
ORDERED.
MARIANO C.
Associate Justice
WE CONCUR:
(On official leave)
REYNATO S. PUNO
Chief Justice
(On official leave)
|
LEONARDO A. QUISUMBING Associate Justice |
CONSUELO YNARES-SANTIAGO Associate Justice |
(On official leave)
|
ANTONIO T.
CARPIO Associate Justice |
RENATO C. CORONA Associate Justice |
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CONCHITA CARPIO MORALES Associate Justice |
MINITA V. CHICO-NAZARIO Associate Justice |
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PRESBITERO J. VELASCO, JR. Associate Justice |
ANTONIO EDUARDO B. NACHURA Associate Justice |
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TERESITA J. LEONARDO-DE CASTRO Associate Justice |
ARTURO D. BRION Associate Justice |
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DIOSDADO M. PERALTA Associate Justice |
LUCAS P. BERSAMIN Associate Justice |
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ROBERTO A. ABAD Associate Justice |
CERTIFICATION
Pursuant to Section 13,
Article VIII of the Constitution, it is hereby certified that the conclusions
in the above Decision had been reached in consultation before the case was
assigned to the writer of the opinion of the Court.
CONSUELO YNARES-SANTIAGO
Acting Chief Justice