G.R. No. 237874 & G.R. No. 239036, February 16, 2021
MIGUEL C. WYCOCO, FORMER REGIONAL MANAGER OF NATIONAL FOOD AUTHORITY – ZAMBOANGA REGIONAL OFFICE, ARACELY C. VALLEDOR, AND ALL CONCERNED NATIONAL FOOD AUTHORITY REGION IX EMPLOYEES, PETITIONERS, VS. MILAGROS L. AQUINO AND ESTRELLA B. AVILA, AUDIT TEAM LEADER AND SUPERVISING AUDITOR, RESPECTIVELY, NILDA B. PLARAS, DIRECTOR IV, COMMISSION SECRETARY, COA, – CORPORATE GOVERNMENT SECTOR, AUDIT GROUP C, ZAMBOANGA CITY, RESPONDENTS. [G.R. No. 239036] ERIC L. BONILLA AND ALL CONCERNED OFFICIALS AND EMPLOYEES OF THE NATIONAL FOOD AUTHORITY – AGUSAN DEL NORTE PROVINCIAL OFFICE, PETITIONERS, VS. THE COMMISSION ON AUDIT, RESPONDENT.

FACTS

These are consolidated petitions for certiorari assailing Commission on Audit (COA) Proper Decisions which affirmed the disallowance of the Food and Grocery Incentive (FGI) granted to officials and employees of the National Food Authority (NFA). In G.R. No. 237874 , ND No. 11-003-GOF(10) disallowed the FGI granted to NFA Region IX employees for Calendar Year (CY) 2010. In G.R. No. 239036, ND No. 2014-01(12) disallowed the FGI granted to NFA-Agusan Del Norte Provincial Office employees for CY 2012. Petitioners were ordered to refund the amounts. The grant of FGI was based on a 1998 letter from then NFA Administrator to President Joseph Estrada, which approved a one-time food assistance and emergency allowance, and a 2003 Memorandum from the Chief Presidential Management Staff to heads of GOCCs/GFIs regarding moderation in granting bonuses. Relying on these and an OGCC Opinion, the NFA Council passed Resolution No. 226-2K5 in 2005 authorizing the annual grant of FGI. The COA disallowed the benefits for violating Republic Act No. 6758 (the Salary Standardization Law), the General Appropriations Act, and DBM Budget Circular No. 16, s. 1998, and for lacking the required presidential imprimatur. Petitioners appealed to the COA Proper, arguing the grants had presidential authorization, their disallowance violates equity and non-diminution of benefits, and recipients acted in good faith. The COA Proper denied the appeals, ruling the alleged presidential approvals were for one-time grants only and did not meet legal requirements for an annual benefit, and that the approving officers and recipients were liable for refund.

ISSUE

1. Whether the COA Proper committed grave abuse of discretion in sustaining the disallowance of the FGI.
2. Whether petitioners should be held liable to return the disallowed amounts.

RULING

The petitions are PARTIALLY GRANTED. The Court AFFIRMS the COA Proper’s Decisions but MODIFIES the liability for refund.
1. On the first issue, the COA Proper did NOT commit grave abuse of discretion. Grave abuse of discretion implies a capricious and whimsical exercise of judgment equivalent to lack of jurisdiction. The COA’s decisions were based on sufficient legal grounds and were not arbitrary. The Court found the disallowance proper because:
a. The alleged presidential approvals from 1998 and 2003 were for one-time grants only and did not authorize an annual FGI. The 2003 Memorandum merely advised moderation and did not constitute affirmative authorization.
b. The grant violated Section 12 of RA 6758, as the FGI was not among the benefits integrated into the standardized salary or expressly excluded by law. For a benefit to be continuously granted, it must have been existing prior to RA 6758, received as of July 1, 1989, and specified in DBM Corporate Compensation Circular No. 10. The FGI did not meet these conditions.
c. The NFA Council Resolution could not be considered an act of the President. The doctrine of political agency does not apply to cabinet members acting in an ex-officio capacity in a corporate board.
d. The Court’s prior ruling in Escarez v. Commission on Audit, which declared the NFA’s FGI grant improper for lack of presidential authorization, constitutes res judicata and a binding precedent on this issue.
2. On the second issue, the liability for refund is MODIFIED in accordance with the Court’s prevailing doctrine on return obligations.
a. Approving/Certifying Officers: The approving/certifying officers are solidarily liable to refund the disallowed amounts. Their participation was not ministerial but necessary for the disbursement. They cannot invoke good faith as they are presumed to know the relevant laws and circulars prohibiting the grant. Their liability is personal and collective.
b. Recipient Employees: The recipient employees who received the FGI in good faith are NOT liable to refund. Good faith is presumed on the part of passive recipients. They received the benefit under the honest belief it was authorized, given its long-standing grant and the NFA Council Resolution. The fact they signed undertakings to refund in case of disallowance does not negate this good faith nor does it make the refund a contractual obligation; it is a condition imposed by law for receiving the benefit.
The Court cites relevant provisions of the Administrative Code and jurisprudence (Philippine Health Insurance Corporation v. Commission on Audit) distinguishing the liability of officers who authorize payments from employees who merely receive them.