G.R. No. 263014 , February 25, 2025
Engr. Numeriano M. Castañeda, Jr., in his capacity as the General Manager of San Rafael Water District (SRWD), on his own behalf and on behalf of other SRWD officials and employees, Petitioners, vs. Commission on Audit, Respondent.

FACTS

On November 21, 2012, the COA Audit Group issued Notice of Disallowance (ND) Nos. 12-001-101(11) and 12-002-101(11). ND No. 12-001-101(11) disallowed payments of rice, grocery, and medical allowances, and year-end financial assistance to SRWD employees hired after December 31, 1999, for 2011, amounting to PHP 857,340.75. ND No. 12-002-101(11) disallowed year-end financial assistance and cash gift to SRWD Board of Directors (BOD) members for 2011, amounting to PHP 239,000.00. The COA held General Manager Engr. Numeriano M. Castañeda, Jr. liable as a recipient and solidarily liable as an approving officer under the first ND, and solidarily liable as an approving officer under the second ND. It also held Division Manager Marivel V. Suarez solidarily liable as the certifying officer for both NDs, and held the employee-recipients and BOD members liable to refund the disallowed amounts. Petitioners appealed, arguing the benefits were authorized by a 2003 letter from a DBM Regional Director (the Garcia Letter) and certain LWUA resolutions. In Decision No. 2018-188, the COA Proper affirmed the disallowances but absolved the employee-recipients from refunding, finding they received the benefits in good faith. However, upon a Motion for Partial Reconsideration filed by Castañeda Jr. and Suarez, the COA, in a 2022 Resolution, modified its decision and held all payees (including the previously absolved employees) liable to refund the benefits they received, while the approving and certifying officers remained solidarily liable. Petitioners filed a Petition for Certiorari before the Supreme Court. In a Decision dated May 14, 2024, the Court dismissed the petition and affirmed the COA’s modified ruling. Petitioners filed the instant Motion for Reconsideration.

ISSUE

1. Whether the approving/certifying officers (Castañeda Jr. and Suarez) acted in good faith and should be absolved from solidary liability.
2. Whether the COA committed grave abuse of discretion by reversing its prior ruling that absolved the employee-recipients from refunding the disallowed benefits, considering that ruling was not the subject of the Motion for Partial Reconsideration.
3. Whether the employee-recipients should be liable to refund the disallowed benefits.

RULING

The Motion for Reconsideration is DENIED. The Court’s Decision dated May 14, 2024, is AFFIRMED.
1. On the liability of the approving/certifying officers: The Court held that petitioners Castañeda Jr. and Suarez did not act in good faith. Their reliance on the Garcia Letter and inapplicable LWUA issuances fell short of the standards of good faith and diligence required for the proper discharge of their duties. The Garcia Letter was a mere reply to a query and did not constitute a valid legal basis to grant benefits contrary to existing laws and jurisprudence. Their failure to exercise due diligence in ascertaining the legal basis for the disbursements precludes their exoneration from solidary liability.
2. On the COA’s reversal regarding employee-recipients: The Court ruled that the COA did not commit grave abuse of discretion. A motion for reconsideration opens the entire decision for review, allowing the COA to re-examine all legal and factual aspects of the case to rectify any error, not just those specifically raised in the motion. The COA’s authority to modify or reverse its decision upon a motion for reconsideration is plenary and not limited to the issues expressly challenged.
3. On the liability of the employee-recipients: The Court affirmed their liability to refund the disallowed amounts. Citing the doctrine in Madera v. Commission on Audit, the Court ruled that the receipt of public funds without a valid legal basis constitutes an undue benefit, giving rise to the obligation to return under the principles of solutio indebiti and unjust enrichment. This obligation exists regardless of the recipient’s good faith. Therefore, the employee-recipients under ND No. 12-001-101(11) are liable to refund the benefits they respectively received.