GR 237813; (March, 2019) (Digest)
G.R. No. 237813 . March 05, 2019.
JAMES ARTHUR T. DUBONGCO, PROVINCIAL AGRARIAN REFORM PROGRAM OFFICER II OF DEPARTMENT OF AGRARIAN REFORM PROVINCIAL OFFICE-CAVITE IN REPRESENTATION OF DARPO-CAVITE AND ALL ITS OFFICIALS AND EMPLOYEES, PETITIONER, VS. COMMISSION ON AUDIT, RESPONDENT.
FACTS
The Department of Agrarian Reform Provincial Office-Cavite (DARPO-Cavite) granted Collective Negotiation Agreement (CNA) Incentives to its officials and employees for the years 2009 and 2010, totaling P2,694,800.00. These incentives were sourced from the agency’s Comprehensive Agrarian Reform Program (CARP) Fund, also known as Fund 158. The Commission on Audit (COA) issued Notices of Disallowance against these payments. COA auditors held that the CARP Fund, being a special fund created by law for the specific purpose of implementing agrarian reform, could not be legally used to fund CNA Incentives. DARPO-Cavite officials appealed, arguing that the fund was held for the agency’s own use and that a prior opinion from the Department of Budget and Management (DBM) Secretary suggested such use might be permissible.
The COA Regional Office and subsequently the COA Commission Proper affirmed the disallowances. The COA En Banc ruled that the grant was illegal as the applicable DBM Budget Circular No. 2006-1 mandatorily required that CNA Incentives be sourced solely from savings generated from the released Maintenance and Other Operating Expenses (MOOE) allotments. The CARP Fund did not qualify as MOOE savings. The COA also found that good faith could not be invoked by the approving officers due to prior similar disallowances, and it ordered the refund of the amounts and the forwarding of the case to the Ombudsman. Petitioner, the current officer, filed this certiorari petition.
ISSUE
The primary issue is whether the CARP Fund (Fund 158) can be a valid source for the grant of CNA Incentives to rank-and-file employees.
RULING
The Supreme Court dismissed the petition and affirmed the COA rulings. The legal logic is anchored on the specific nature of the CARP Fund and the mandatory sourcing requirement for CNA Incentives. The Court emphasized that the CARP Fund is a special fund created under Republic Act No. 6657 (the Comprehensive Agrarian Reform Law) with a specific statutory purpose: the implementation of agrarian reform. As a special fund, its use is strictly limited to the purpose for which it was created. Diverting it for CNA Incentives constitutes an illegal expenditure.
Furthermore, the Court upheld the COA’s interpretation of DBM Budget Circular No. 2006-1, which implemented the guidelines for granting CNA Incentives. The Circular explicitly states that the incentive “shall be sourced solely from savings from released Maintenance and Other Operating Expenses (MOOE) allotments.” The use of the word “shall” denotes an imperative and exclusive requirement. The CARP Fund is not an MOOE allotment; it is a separate special fund. Therefore, sourcing the incentives from it directly violated the controlling circular. The Court deferred to the COA’s constitutional mandate and expertise in auditing public funds, finding its interpretation and disallowance to be in accordance with law. The defense of good faith was rejected for the approving officers, solidifying their liability for the illegal disbursement.