G.R. No. 109666 ; June 20, 2001
ROGERIO R. OLAGUER, ERNESTO S. SALVADOR and IRMA R. FUENTES, petitioners, vs. HON. EUFEMIO DOMINGO, in his capacity as Chairman, HON. ROGELIO B. ESPIRITU and HON. SOFRONIO URSAL, as Commissioners, EMMA M. ESPINA, in her capacity as Director, all of the Commission on Audit, and LAKAMBINI RAZON, in her capacity as Resident Auditor for National Home Mortgage Finance Corporation, respondents.

FACTS

This is a petition for certiorari seeking to annul decisions and memoranda of the Commission on Audit (COA) concerning post-audit findings on disbursements of the National Home Mortgage Finance Corporation (NHMFC) for the purchase of land under the Community Mortgage Program (CMP). Petitioners are career service professionals of NHMFC assigned to its Community Mortgage Group. Petitioner Rogerio Olaguer was the Manager, petitioner Ernesto S. Salvador was the Chief of the Project Evaluation, Monitoring and Relations Division, and petitioner Irma R. Fuentes was the Chief of the Documentation and Processing Division.
The NHMFC, a government corporation, launched the CMP in 1988 as an innovative mortgage financing scheme for community land acquisition by low-income beneficiaries through accredited originators. On December 19, 1988, an appraisal policy for the CMP was issued by HIGC Vice-President Carlos P. Doble, concurred in by other officials including NHMFC’s Officer-in-Charge.
In 1989, the HIGC, at the request of Severino H. Gonzales, Jr. Construction Co., Inc., appraised a 73.56-hectare parcel of land in Angeles City, Pampanga. The HIGC’s Rawland Appraisal Report dated February 13, 1989, stated the property, if provided with a road right-of-way, had a fair market value of P60.00 per square meter. On the same day, HIGC Vice-President Doble informed the construction company of this appraised value.
The Sapang Palay Community Development Foundation, Inc. (SPCDFI), a non-government organization, applied with NHMFC for a Purchase Commitment Line, which included a loan application by its sub-federation, ALPRAC-Alyansa ng Maka-Maralitang Asosasyon at Kapatirang Organisasyon (AMAKO), for the same Angeles City property. This initial application was not acted upon due to incomplete documents. SPCDFI later applied for accreditation as an originator, which application included the AMAKO Project.
On September 28, 1989, an NHMFC Task Force on CMP was created, with petitioner Olaguer as Head. After SPCDFI-AMAKO submitted a revised application, the NHMFC’s Accreditation and Project Evaluation Department (APED) recommended approval of a P36,800,000.00 loan for the land purchase. The NHMFC Board of Directors approved this recommendation in Resolution No. 662 dated October 23, 1989.
Subsequent investigations by the NHMFC’s MCR Specialist in November and December 1989 identified problems with the AMAKO Project, including: the non-existence of a right-of-way; the land’s classification and adjacency to Clark Air Base; beneficiaries being charged excessive fees; and the property being an interior lot contrary to beneficiaries’ knowledge. Petitioner Olaguer was instructed to conduct further site documentation.

ISSUE

Whether the Commission on Audit acted with grave abuse of discretion in issuing its Decision and Memoranda disallowing the disbursements related to the NHMFC’s Community Mortgage Program loan for the AMAKO Project land purchase.

RULING

The Supreme Court dismissed the petition. The Court found no grave abuse of discretion on the part of the Commission on Audit. The COA’s disallowance of the disbursements was based on its constitutional mandate to audit government funds and its finding that the transaction was irregular, unnecessary, excessive, extravagant, or unconscionable. The Court held that the COA’s factual findings, such as the overvaluation of the property and the lack of due diligence in the loan approval process, are generally accorded respect and finality. Petitioners failed to substantiate their claim that the COA’s actions were tainted with caprice, whimsicality, or arbitrariness. The COA acted within its jurisdiction and authority in disallowing the expenditures.