G.R. No. 230818 & G.R. No. 244540, February 14, 2023
EFRAIM C. GENUINO, PETITIONER, VS. COMMISSION ON AUDIT, ET AL., RESPONDENTS.

[G.R. No. 244540]
RENE C. FIGUEROA, PETITIONER, VS. COMMISSION ON AUDIT, RESPONDENT.

FACTS

Petitioners Efraim C. Genuino (former Chairman and CEO of PAGCOR) and Rene C. Figueroa (former Senior Vice President of PAGCOR) were held solidarily liable under a Notice of Disallowance (ND) No. 2013-002(10) dated February 20, 2013, for the disbursement of ₱2,000,000.00 as financial assistance to the Pleasant Village Homeowners Association (PVHA) for a flood control project in Pleasant Village Subdivision (PVS), Los Baños, Laguna. The ND was issued after a re-evaluation found that PVHA was a private association and the subdivision remained private property, not turned over to the local government, thus the disbursement lacked a public purpose under Presidential Decree No. 1445. Initially, a Notice of Suspension was issued, and Figueroa was later excluded from it by the Supervising Auditor, who found his participation (as an alternate signatory) to be ministerial. However, after the submission of documents and the lifting of the suspension, the ND was issued, holding both petitioners liable. Their appeals and petitions for review before the COA Corporate Government Sector and the COA Commission Proper were denied. The COA held Figueroa negligent for failing to state his objections in writing as required by law and held Genuino liable as the approving officer. The COA Commission Proper affirmed the disallowance.

ISSUE

Whether the COA committed grave abuse of discretion in affirming the disallowance of the ₱2,000,000.00 financial assistance to PVHA and in holding petitioners Genuino and Figueroa solidarily liable for its refund.

RULING

The Supreme Court GRANTED the petitions. The COA committed grave abuse of discretion.
1. On the Disallowance: The Court ruled that the financial assistance served a public purpose. The flood control project addressed a public safety hazard (flooding) affecting residents and the general public within the subdivision. The fact that PVHA is a private association and PVS is private property does not automatically negate a public purpose. The project conferred a direct benefit to a considerable number of residents and, by mitigating flooding, provided an indirect benefit to the broader community. The Court distinguished the case from Pascual v. Secretary of Public Works, as the disbursement was not an appropriation of public funds to a private entity for a private end, but rather financial assistance for a project with clear public welfare objectives.
2. On the Liability of Petitioners:
* For Rene C. Figueroa: The Court absolved him of liability. His role as an alternate signatory to the check and check voucher was purely ministerial. He relied on the completeness and regularity of the supporting documents certified by other officers. The prior decision of the Supervising Auditor excluding him from the Notice of Suspension, while not binding on the COA, correctly recognized the nature of his duties. He cannot be held personally liable for the disallowed amount.
* For Efraim C. Genuino: The Court also absolved him of liability. As the approving officer, he acted in good faith based on the presumption that subordinate officers had regularly performed their duties in preparing the supporting documents. There was no showing that he acted with malice, gross negligence, or in bad faith in approving the transaction, which was presented as a legitimate corporate social responsibility project of PAGCOR.
The Court set aside the COA Decisions and Resolutions affirming the disallowance and held that petitioners are not liable to refund the disallowed amount.