G.R. No. 182069; July 03, 2012
ARNOLD D. VICENCIO, Petitioner vs. HON. REYNALDO A. VILLAR and HON. JUANITO G. ESPINO, JR., in their capacity as Acting Chairman and Commissioner, respectively, of the Hon. Commission on Audit, and ELIZABETH ZOSA, Respondents.

FACTS

The Sangguniang Panglungsod ng Malabon (SPM) enacted City Ordinance No. 15-2003, authorizing then-Vice Mayor Jay Jay Yambao to negotiate and enter into consultancy service contracts for the Sanggunian Secretariat for the period June to December 2003. Following the 2004 elections, petitioner Arnold D. Vicencio assumed office as City Vice-Mayor and Presiding Officer of the SPM. Seeking to augment the secretariat, he inquired from the City Legal Officer whether new consultancy contracts required ratification by the SPM. The City Legal Officer opined that ratification was unnecessary if the services contracted were precisely those stipulated in the existing ordinance.
Relying on this opinion, petitioner, representing the city government, entered into new consultancy contracts in 2005. Payments were subsequently made to the consultants. The Commission on Audit (COA) issued a Notice of Disallowance, holding that Ordinance No. 15-2003 was specific to the former Vice-Mayor and the 2003 period, and thus did not authorize petitioner to hire consultants for 2005. The COA also cited procedural lapses, including the non-submission of contracts for timely review. Petitioner appealed, arguing good faith based on the City Legal Officer’s opinion.

ISSUE

Whether the Commission on Audit committed grave abuse of discretion in affirming the disallowance of the payments for the consultancy contracts entered into by petitioner.

RULING

No, the COA did not commit grave abuse of discretion. The Supreme Court affirmed the COA’s decision. The legal logic centers on the strict interpretation of the ordinance and the nature of public accountability. Ordinance No. 15-2003 was explicit: it granted authority solely to the former Vice-Mayor, Hon. Jay Jay Yambao, for a defined period ending in December 2003. This specificity meant the authority was personal and non-transferable; it did not constitute a continuing appropriation or a blanket authorization for subsequent vice-mayors. Therefore, petitioner lacked the legal authority to enter into the 2005 contracts based on that ordinance.
The Court further ruled that reliance on the City Legal Officer’s opinion, while indicative of good faith, does not absolve petitioner from personal liability for the disallowed disbursement. Good faith is not a valid defense against the return of disallowed public funds under audit laws, such as Presidential Decree No. 1445. The primary duty to ensure the legality of transactions rests with the approving officer. The COA’s disallowance was a proper exercise of its constitutional mandate to prevent irregular, unnecessary, or extravagant expenditures of government funds. Since the COA acted within its legal authority and did not act in a capricious or whimsical manner, no grave abuse of discretion warranting certiorari was present.