G.R. No. 237835 , 237860, 237883, 237884. February 07, 2023.
FRANCIS SATURNINO C. JUAN, ISABELO JOSEPH P. TOMAS II, NOEL J. SALVANERA, SHARON O. MONTAÑER, FLORESINDA G. BALDO-DIGAL AND MARIA CORAZON C. GINES, PETITIONERS, VS. COMMISSION ON AUDIT, HON. MICHAEL G. AGUINALDO, IN HIS OFFICIAL CAPACITY AS CHAIRPERSON, AND HON. JOSE A. FABIA AND HON. ISABEL D. AGITO, IN THEIR OFFICIAL CAPACITY AS COMMISSIONERS, OF THE COMMISSION ON AUDIT, RESPONDENTS. [G.R. No. 237860] ELLEN C. EBCAS, PETITIONER, VS. COMMISSION ON AUDIT, HON. MICHAEL G. AGUINALDO, IN HIS OFFICIAL CAPACITY AS CHAIRPERSON, AND HON. JOSE A. FABIA AND HON. ISABEL D. AGITO, IN THEIR OFFICIAL CAPACITY AS COMMISSIONERS, OF THE COMMISSION ON AUDIT, RESPONDENTS. [G.R. No. 237883] LUZVIMINDA N. CABALBAG, PETITIONER, VS. HON. MICHAEL G. AGUINALDO, IN HIS OFFICIAL CAPACITY AS CHAIRPERSON, AND HON. JOSE A. FABIA AND HON. ISABEL D. AGITO, IN THEIR OFFICIAL CAPACITY AS COMMISSIONERS, OF THE COMMISSION ON AUDIT, RESPONDENTS. [G.R. No. 237884] MARIANO D. GARCIA, PETITIONER, VS. COMMISSION ON AUDIT, RESPONDENT.

FACTS

The Energy Regulatory Commission (ERC) granted an educational allowance totaling P7,433,834.00 to its personnel in three tranches in 2010. The Commission on Audit (COA) disallowed this grant through Notice of Disallowance (ND) No. 2011-002-101-(10) dated August 3, 2011, on the grounds of lack of legal basis, violation of the General Appropriations Act of 2010, and violation of Joint Resolution No. 4, s. 2009, which required Presidential approval upon Department of Budget and Management recommendation for new allowances. The ND implicated fifteen (15) ERC officials and employees who approved or certified the payments. The ERC officials appealed to the COA National Government Sector, which denied the appeal. The COA Proper, in Decision No. 2015-387 and Resolution No. 2017-452, ultimately affirmed the disallowance but exempted passive recipients from refunding. It held the officers who approved/authorized/certified the payment solidarily liable. Nine of these officers filed the present Petitions for Certiorari, arguing the allowance had legal basis under Memorandum Circular No. 174 and contesting their solidary liability.

ISSUE

1. Whether the COA committed grave abuse of discretion in sustaining the disallowance of the ERC educational allowance.
2. Assuming the disallowance is proper, whether the COA committed grave abuse of discretion in holding all implicated ERC officers solidarily liable.

RULING

1. The COA did not commit grave abuse of discretion in sustaining the disallowance. The grant of the educational allowance lacked legal basis. Memorandum Circular No. 174, which petitioners cited, merely encouraged scholarship programs but did not constitute a mandatory, specific, and direct authorization for the grant of a blanket cash educational allowance. Furthermore, the ERC, despite being exempt from the Salary Standardization Act, was still bound by Joint Resolution No. 4, s. 2009, which required prior Presidential approval for new allowances. No such approval was secured. Therefore, the disallowance was proper.
2. The COA did not commit grave abuse of discretion in holding the approving/certifying officers liable, but the nature and extent of their liability must be examined individually under the guidelines set in Madera v. Commission on Audit.
* Approving and certifying officers who acted in good faith, in the regular performance of official functions, and with the diligence of a good father of the family are not civilly liable to return.
* Approving and certifying officers who acted in bad faith, malice, or gross negligence are solidarily liable to return the net disallowed amount.
Applying these principles:
* Ellen C. Ebcas and Luzviminda N. Cabalbag are solidarily liable for the net disallowed amount. Their signatures on obligation requests, disbursement vouchers, and payrolls, with certifications as to the necessity, legality, and validity of the transactions, constituted direct participation in the approval and certification process for the second and third tranches. They failed to prove they exercised the diligence of a good father of a family.
* Francis Saturnino C. Juan, Isabelo Joseph P. Tomas II, Noel J. Salvanera, Sharon O. Montañer, Floresinda G. Baldo-Digal, Maria Corazon C. Gines, and Mariano D. Garcia are NOT liable to return the disallowed amounts. Their participation was limited to certifying the correctness of their respective office payrolls (i.e., the list of employees and amounts due). This is a ministerial duty. The presumption of regularity of official duty stands, and there was no evidence they acted with bad faith, malice, or gross negligence. Garcia’s act of substituting for an indisposed superior was also a regular performance of duty.
The solidary liability for the net disallowed amount, therefore, falls only on Ebcas and Cabalbag, together with the other approving/certifying officers not parties to the petitions (Cruz-Ducut et al.). Passive recipient employees are exempt from refund.