G.R. No. 242342, March 10, 2020
NATIONAL POWER CORPORATION BOARD OF DIRECTORS MARGARITO B. TEVES, ROLANDO G. ANDAYA, JR., PETER B. FAVILA, ARTHUR C. YAP, ELEAZAR P. QUINTO, RONALDO V. PUNO, AUGUSTO B. SANTOS, AND FROILAN A. TAMPINCO, PETITIONERS, V. COMMISSION ON AUDIT, RESPONDENT.

FACTS

On September 10, 2009, the National Power Corporation (NPC) Board of Directors, through Board Resolution No. 2009-52, authorized the payment of the Employee Health and Wellness Program and Related Financial Assistance (EHWPRFA) to qualified NPC officials and employees. The EHWPRFA was a monthly benefit of P5,000.00, released quarterly. On September 26, 2011, the petitioners received Notice of Disallowance (ND) No. NPC-11-004-10, disallowing the payment for the first quarter of 2010 amounting to P29,715,000.00. The COA disallowed it because it was a new benefit lacking prior approval from the Office of the President as required under Memorandum Order No. 20 dated June 25, 2001. The petitioners appealed to the COA Corporate Government Sector-Cluster 3, which affirmed the ND. The COA, in its February 16, 2017 Decision, upheld the disallowance, ruling the EHWPRFA was a new cash benefit distinct from the non-cash benefits under the existing NPC Star Program and required presidential approval under P.D. No. 1597. The COA also rejected the application of the doctrine of qualified political agency, noting the board members, even if cabinet secretaries, were acting in their board capacity. In a March 15, 2018 Resolution, the COA partially granted reconsideration, absolving passive recipients in good faith from refunding but holding liable the officials who authorized, approved, or certified the payments. The petitioners filed this Petition for Certiorari.

ISSUE

1. Whether the COA committed grave abuse of discretion in ruling that the EHWPRFA was a new benefit.
2. Whether the COA committed grave abuse of discretion in ruling that the grant of EHWPRFA needed presidential approval.

RULING

The Supreme Court DENIED the petition and AFFIRMED the COA’s disallowance with MODIFICATION regarding liability for refund.
1. On the Nature of EHWPRFA as a New Benefit: The Court held the COA did not commit grave abuse of discretion. The EHWPRFA was a straight-up cash benefit of P5,000.00 monthly, released quarterly, without regard to the employee’s health condition. In contrast, the previous Comprehensive Health Benefit Program (CHBP) under Circular No. 2000-55 provided specific reimbursements for medical, dental, and optical expenses, medical assistance for dreaded diseases, and annual check-ups, none of which involved direct cash grants. Thus, the EHWPRFA was a new benefit, not a mere increase of an existing one.
2. On the Requirement of Presidential Approval: The Court held the COA correctly ruled that presidential approval was required. Memorandum Order No. 20 and Administrative Order No. 103 suspended the grant of new or increased benefits and required presidential approval for any increase in salary or compensation. Even assuming the EHWPRFA was an increase to an existing benefit, it still required the President’s imprimatur. The doctrine of qualified political agency (alter ego doctrine) was inapplicable because the cabinet secretaries on the NPC Board were acting in their official capacity as board members, not as alter egos of the President, when they approved the benefit. Their collective board action could not substitute for the specific presidential approval required by law.
3. On Liability for Refund: The Court modified the COA’s March 15, 2018 Resolution. Citing recent jurisprudence (e.g., Madera v. Commission on Audit), the Court ruled that passive recipients who received the disallowed benefit must refund it because they were not entitled to it, as its grant lacked legal basis. The Court affirmed that the certifying and approving officers, as well as all employees who received the disallowed benefit, are liable to reimburse the amount received.