GR 157875; (December, 2006) (Digest)
G.R. No. 157875 December 19, 2006
DR. TERESITA L. SALVA, President of the Palawan State University, petitioner, vs. GUILLERMO N. CARAGUE, as Chairman, Commission on Audit, RAUL FLORES, as Commissioner, Commission on Audit and EMMANUEL M. DALMAN, in his capacity as Commissioner, respondents.
FACTS
The Commission on Audit (COA) disallowed P274,726.38 from the contract price for the construction of Phase II of the Palawan State University Multi-Purpose Building. The disallowance was based on the COA-Technical Audit Specialist’s finding of excess costs for the contract items of mobilization/demobilization and earthfill and compaction when compared to COA’s own estimates. The COA held petitioner Dr. Teresita L. Salva, the University President, personally liable for this amount.
Petitioner contested the disallowance, arguing that the COA’s computation for mobilization was based only on a percentage of direct costs, excluding necessary temporary facilities, and that the estimated duration for earthfill work was unrealistically short. Despite her arguments, the COA, in its Decision No. 2003-063, affirmed her personal liability, prompting her to file this petition for certiorari.
ISSUE
Whether or not petitioner Dr. Teresita L. Salva should be held personally liable for the disallowed amount of P274,726.38.
RULING
No. The Supreme Court ruled that petitioner should not be held personally liable. Personal liability under Section 103 of the Government Auditing Code requires that an expenditure is in violation of law or regulation and that the official is found directly responsible. The Court found that the disallowed amounts, while exceeding COA estimates, were not irregular, excessive, unnecessary, or unconscionable.
The legal logic is that the determination of irregular or excessive expenditures is situational and must be judged by standards of necessity, reasonableness, and moderation. The additional costs were incurred for the actual construction of a university building, were within the Approved Agency Estimates, and there was no showing of bad faith, ill motive, or personal gain on the part of petitioner. Since the expenditures were made for public benefit and without any taint of irregularity warranting personal accountability, holding petitioner liable was unjustified. The COA decision was reversed insofar as it pertained to petitioner’s personal liability.