GR 126557; (March, 2001) (Digest)
G.R. No. 126557; March 6, 2001
RAMON ALBERT, petitioner, vs. CELSO D. GANGAN, in his capacity as Chairman, Commission on Audit, et al., respondents.
FACTS
The Commission on Audit (COA) disallowed a payment of P36,796,711.55 made by the National Home Mortgage Finance Corporation (NHMFC) for a lot acquisition under the Community Mortgage Program (CMP). The payment was made to Severino H. Gonzales, Jr. Construction, Co., Inc. (SHGCCI) based on the application submitted by the Sapang Palay Community Development Foundation, Inc., the accredited originator for the Alyansang Maka-Maralitang Asosasyon at Kapatirang Organisasyon (AMAKO) project. Petitioner Ramon Albert, as NHMFC President, approved the disbursement after receiving assurances from his subordinate, Rogelio Olaguer, head of the CMP Task Force, that the project complied with guidelines and was “above board.”
The COA Resident Auditor disallowed the transaction for non-submission of required documents under NHMFC circulars and for irregular expenditures. The COA, in its decision, held petitioner Albert personally liable for the disallowed amount, finding that he approved the payment despite the absence of a mandatory appraisal from the Home Insurance Guarantee Corporation (HIGC) and other documentary deficiencies. Albert sought relief via a petition for certiorari, arguing the COA committed grave abuse of discretion.
ISSUE
Did the Commission on Audit commit grave abuse of discretion in holding petitioner Ramon Albert personally liable for the disallowed payment?
RULING
Yes. The Supreme Court reversed the COA decision, finding grave abuse of discretion in holding Albert personally accountable. The legal logic rests on the principle that a public officer is not automatically personally liable for a disallowed transaction simply by virtue of having approved it. Personal liability attaches only when the officer is shown to have acted with malice, bad faith, or gross negligence.
The Court found that Albert acted in good faith based on the recommendations and assurances of his technical subordinates, particularly the CMP Task Force head who conducted a site inspection and certified compliance. The absence of the HIGC appraisal, while a procedural lapse, was not solely attributable to Albert; the responsibility for securing it lay with the originating foundation and the concerned NHMFC units. The Court emphasized that a head of agency must necessarily rely on the competence and recommendations of subordinate officers in specialized fields. To hold him personally liable without concrete evidence of his direct participation in the fraud or his conscious disregard of rules constitutes grave abuse of discretion. The COA’s finding of liability was not supported by substantial evidence of Albert’s gross negligence or bad faith.