GR 194710; (February, 2012) (Digest)
G.R. No. 194710 ; February 14, 2012
MANILA INTERNATIONAL AIRPORT AUTHORITY, Petitioner, vs. COMMISSION ON AUDIT, Respondent.
FACTS
On July 30, 2003, the Board of Directors of the Manila International Airport Authority (MIAA) issued Resolution No. 2003-067, which approved a Collective Negotiation Agreement (CNA) with a union and authorized the grant of a ₱30,000 “contract signing bonus” to all MIAA officials and employees, to be sourced from savings in personal services. The Commission on Audit (COA), through its Corporate Auditor, issued an Audit Observation Memorandum stating the payment was improper, citing the Supreme Court’s ruling in Social Security System v. Commission on Audit. Subsequently, COA’s Legal and Adjudication Office-Corporate issued Notice of Disallowance (N.D.) No. MIAA-2006-001 dated August 31, 2006, disallowing the total disbursement of ₱44,790,000. The disallowance was based on the grounds that the grant was contrary to Section 1 of Public Sector Labor Management Council (PSLMC) Resolution No. 2, series of 2003, which states a CNA Incentive may be granted to the rank-and-file, while MIAA’s grant included all officers and employees. It also cited a May 2, 2002 letter from the DBM Secretary to the COA Chairman indicating a moratorium on the grant of CNA signing bonuses. MIAA appealed, arguing the incentive was justified by its 2003 financial performance and was a collaborative effort of all personnel. The LAO-Corporate denied the appeal, affirming the disallowance. MIAA then filed a petition for certiorari with the Supreme Court.
ISSUE
Whether the Commission on Audit committed grave abuse of discretion in affirming the disallowance of the ₱44,790,000 paid by MIAA as a “contract signing bonus” to all its officials and employees.
RULING
The Supreme Court DENIED the petition and AFFIRMED the COA Decision. The Court held that the COA did not commit grave abuse of discretion.
The grant was properly disallowed as a “signing bonus,” which had been declared improper by the Court in SSS v. COA and was subject to a moratorium per a DBM letter. The grant could not be considered a valid “CNA Incentive” under PSLMC Resolution No. 2, series of 2003, for several reasons: (1) It was granted to all officials and employees, not exclusively to rank-and-file employees as required by the PSLMC Resolution and related budget circulars. (2) MIAA failed to comply with the condition in the PSLMC Resolution requiring the submission of its Corporate Operating Budget to the DBM and the Office of the President for approval. (3) The payment was made immediately after the CNA’s approval in August and October 2003, before any determination of savings from cost-cutting measures related to Maintenance and Other Operating Expenses (MOOE), which is the required source for a CNA Incentive. The Court also noted that as a government-owned and controlled corporation, MIAA’s compensation and benefits are subject to rules and policies set by the President and the DBM, and the grant violated these policies. The disallowance was thus upheld as having a legal basis.