GR 157542; (October, 2008) (Digest)
G.R. No. 157542 October 10, 2008
REBECCA A. BARBO, ELEONORA R. DE JESUS, and ANTONIO B. MAGTIBAY, petitioners, vs. COMMISSION ON AUDIT, respondent.
FACTS
Petitioners are officials of the Local Water Utilities Administration (LWUA) designated as members of the Interim Board of Directors of the San Fernando Water District (SFWD). Pursuant to LWUA Board Resolution Nos. 313 (1995) and 39 (1996), petitioners received Extraordinary & Miscellaneous Expense (EME), Rice Allowance, Christmas Bonus, and Productivity Bonus from SFWD for the years 1994 to 1996. A COA Special Audit Team disallowed these payments for being excessive and contrary to law, specifically Section 13 of Presidential Decree No. 198 (Provincial Water Utilities Act of 1973), as amended, and related rules. Petitioners were directed to refund the amounts. Their appeals to the COA Regional Director and then to the Commission on Audit proper were denied. The COA affirmed that the bonuses and allowances constituted prohibited additional compensation under PD 198. Petitioners then filed this Petition for Certiorari.
ISSUE
1. Whether the Commission on Audit has jurisdiction to declare LWUA Board Resolutions contrary to Section 13 of PD 198.
2. Whether Section 13 of PD 198 prohibits petitioners’ entitlement to RATA, EME, bonuses, and other benefits and allowances.
3. Whether petitioners are liable to refund the disallowed amounts.
RULING
1. Yes, the Commission on Audit has jurisdiction. The Court upheld COA’s constitutional authority to audit all government agencies, including government-owned and controlled corporations with original charters, and to disallow illegal or irregular disbursements of government funds. This power does not conflict with the jurisdiction of courts, the Department of Budget and Management, or LWUA.
2. Yes, Section 13 of PD 198 prohibits such entitlements. The law explicitly states: “No director shall receive other compensation for services to the district” aside from per diems for board meetings attended (limited to four per month). The Court ruled that this provision clearly and expressly prohibits the grant of any other compensation, allowance, or bonus in whatever form to water district directors, including RATA, EME, Christmas Bonus, and Productivity Bonus.
3. No, petitioners are not liable to refund the disallowed amounts. While the Court sustained the disallowance, it held that petitioners received the benefits in good faith under the honest belief that the LWUA Board Resolutions authorized such payments. At the time of receipt, there was no controlling judicial declaration that such payments were illegal. Therefore, acting in good faith, petitioners need not refund the allowances and bonuses they received.