G.R. No. 218347, March 15, 2022
ADHAM G. PATADON, ULAMA M. ACAD, BATOLACONGAN D. ABDULLAH, AND FREDERICK C. DEDICATORIA, PETITIONERS, VS. COMMISSION ON AUDIT AND COMMISSIONERS HON. MA. GRACIA M. PULIDO TAN, HEIDI L. MENDOZA, AND JOSE A. FABIA; DIRECTOR SUSAN P. GARCIA, IN HER CAPACITY AS DIRECTOR, SPECIAL AUDITS OFFICE; FLOREFE S. AVILA, AUDIT TEAM LEADER; AND ELSIELIN C. MASANGCAY, TEAM SUPERVISOR, RESPONDENTS.

FACTS

This case stems from an audit of the Office of the Regional Governor, Autonomous Region of Muslim Mindanao (ORG-ARMM). The Special Audits Office (SAO) found that from January 2008 to September 2009, the ORG-ARMM issued checks totaling P1,083,502,563.35, with P866,512,945.54 representing cash advances for its operations. Of this, P744,559,272.19 in cash advances were granted to petitioner Adham G. Patadon, then Chief Administrative Officer/Special Disbursing Officer. The SAO observed that the magnitude of cash advances indicated a failure to observe the general rule that payments must be made by check. Upon examination of liquidation documents for Patadon’s cash advances, a portion pertained to successive purchases of relief goods and office supplies from “Superama.” Consequently, the COA Auditor issued Notice of Disallowance (ND) No. ORG-12-002-MDS/LF (08 & 09) dated January 13, 2012, disallowing P79,162,435.00 of Patadon’s cash advances used for these alleged purchases. The ND cited multiple violations: (1) cash advances granted without a specific purpose in violation of COA Circular No. 97-002; (2) payments in cash exceeding the P15,000.00 per transaction limit under the same circular; (3) procurements reaching up to P5,000,000.00 not subjected to public bidding as required by Republic Act No. 9184; and (4) support documents were spurious and inadequate. Specifically, the owner of Superama denied transacting with ORG-ARMM during the period, the Bureau of Internal Revenue (BIR) authorities to print invoices appeared questionable, and there was no proof of distribution of the relief goods to beneficiaries. The ND held several persons liable, including petitioners Patadon, Ulama M. Acad (Chief of Staff), Batolacongan D. Abdullah (Director, Finance, Budget, and Management Services), and Frederick C. Dedicatoria (Supervising Administrative Officer). Petitioners appealed to the SAO, which upheld the ND. Their subsequent appeals to the COA Commission Proper were denied. Hence, they filed this Petition for Certiorari.

ISSUE

Whether the Commission on Audit (COA) committed grave abuse of discretion in affirming the disallowance of the cash advances amounting to P79,162,435.00.

RULING

No, the COA did not commit grave abuse of discretion. The Petition was denied, and the COA Commission Proper’s Decision and Resolution were affirmed. The Court held that the disallowance was based on substantial evidence of multiple legal and regulatory violations. The cash advances were properly disallowed for the following reasons: (1) They were granted without a specific purpose, contravening COA Circular No. 97-002. (2) Payments made from these advances for individual transactions far exceeded the P15,000.00 cash payment ceiling, with 23 out of 29 checks issued above the limits set under Section 52 of R.A. 9184. (3) The procurements, involving substantial amounts for relief goods and supplies, were not subjected to mandatory public bidding under R.A. 9184. (4) The liquidation documents were spurious, inadequate, and failed to establish the legitimacy of the transactions or the actual receipt of goods by intended beneficiaries. The Court found the COA’s factual findings, including the denial by Superama’s owner and the irregularities in the invoices, to be supported by evidence. Furthermore, the Court upheld the solidary liability of all persons who participated in the illegal transactions, as provided under Section 43 of the Administrative Code of 1987 and COA rules. Petitioners, by approving, certifying, or processing the irregular cash advances and disbursements, failed to exercise the diligence required of public officers and are thus liable. The defense of good faith was not applicable as the violations were clear and petitioners did not exercise the requisite degree of care in the performance of their duties.