GR 195105; (November, 2017) (Digest)
G.R. No. 195105 & G.R. No. 220729 EN BANC November 21, 2017
METROPOLITAN WATERWORKS AND SEWERAGE SYSTEM, Petitioner, vs. COMMISSION ON AUDIT, Respondent; and DARLINA T. UY, et al., Petitioners, vs. METROPOLITAN WATERWORKS AND SEWERAGE SYSTEM and COMMISSION ON AUDIT, Respondents.
FACTS
The Commission on Audit (COA) disallowed various benefits and allowances granted by the Metropolitan Waterworks and Sewerage System (MWSS) to its employees from January to November 2000, totaling approximately ₱8.76 million. The disallowance was based on violations of Republic Act No. 6758 (the Compensation and Position Classification Act of 1989), which standardized compensation in government-owned and controlled corporations. The benefits included mid-year and year-end financial assistance, anniversary bonuses, and other allowances. The COA Proper affirmed the disallowance and ordered the MWSS officials responsible for the approval and payment to refund the total amount personally.
In a subsequent Order of Execution, the COA specifically identified several MWSS officers, including petitioners Darlina T. Uy, et al., as the certifying and approving officials personally liable to refund the disallowed amounts. These petitioners argued they had no participation in the approval of the disallowed benefits and moved to set aside the order.
ISSUE
Whether the petitioners, as MWSS officials, can be held personally liable to refund the disallowed benefits.
RULING
The Supreme Court ruled that the petitioners cannot be held personally liable, and the recipients of the benefits need not refund the amounts received. The legal logic rests on the principles of good faith and the nature of the approving officers’ participation. The Court found that the benefits were granted by the MWSS Board of Trustees prior to the effectivity of R.A. No. 6758 and were merely continued thereafter. The petitioners, who were lower-ranking officers tasked with processing payrolls and vouchers based on existing board resolutions, acted as mere implementors. They did not possess the authority to approve or initiate the grant of benefits; that power resided solely with the Board.
Consequently, they had no participation in the approval that would warrant personal liability. Furthermore, both the approving officers and the employee-recipients acted in good faith under the honest belief that the continued payment had legal basis, as the benefits were established by board action before the law took effect. The Court emphasized that personal liability for a disallowance attaches only to officers who actively participated in the illegal or irregular approval of the expenditure. Since the petitioners here acted in a purely ministerial capacity in reliance on prior board approvals, and all parties acted in good faith, no personal refund obligation arises. The disallowance stands, but the liability is institutional, not personal.