GR 203072; (October, 2016) (Digest)
G.R. No. 203072 . October 18, 2016
DEVELOPMENT ACADEMY OF THE PHILIPPINES, PETITIONER, VS. CHAIRPERSON MA. GRACIA M. PULIDO TAN, COMMISSIONER JUANITO G. ESPINO, JR., COMMISSIONER HEIDI L. MENDOZA, AND COMMISSION ON AUDIT, RESPONDENTS.
FACTS
The Development Academy of the Philippines (DAP) granted a Financial Performance Award to its officers and employees in 2004, based on obligations made in 2002. The total amount disbursed was Php 4,862,845.71. The award was governed by DAP’s internal memorandum circulars issued in 2004, which made it available to nearly all regular and letter-of-invitation-based staff who served for at least six months in 2002. On post-audit, the Commission on Audit (COA) issued a Notice of Disallowance, citing multiple deficiencies including the lack of legal basis for the award, excess payments sourced from service charges intended for other employees, inclusion of ineligible personnel, and the absence of required approvals from DAP’s Board of Trustees and the Civil Service Commission for its incentives program.
ISSUE
Whether the COA correctly disallowed the grant of the Financial Performance Award by DAP to its employees.
RULING
Yes, the COA correctly disallowed the award. The Supreme Court affirmed the disallowance, applying the principle under Republic Act No. 6758 (the Compensation and Position Classification Act of 1989) that all allowances are deemed included in the standardized salary rates. Additional financial awards are permitted only if they fall under specific exceptions authorized by law, such as those granted due to the unique nature of the office or work performed. The Court found that DAP failed to demonstrate any such uniqueness justifying the award. The grant was a general benefit to a broad class of employees without a clear, distinctive, and meritorious performance basis, making it an unauthorized allowance. Furthermore, the procedural lapses cited by COA, including the lack of necessary board and Civil Service Commission approvals, reinforced the illegality of the disbursement. However, the Court, applying the doctrine of good faith, ruled that the approving officers and recipients who received the award in good faith, believing it to be lawful, are not liable to refund the disallowed amounts. The decision balances the strict application of compensation laws with equitable considerations to protect officials and employees who acted without wrongful intent.