GR 243607; (December, 2020) (Digest)
G.R. No. 243607, December 09, 2020
PHILIPPINE CHARITY SWEEPSTAKES OFFICE, ALL CONCERNED OFFICERS AND EMPLOYEES AS REPRESENTED BY MS. BETSY B. PARUGINONG, OFFICER-IN-CHARGE MANAGER, SOUTHERN TAGALOG AND BICOL REGION, PETITIONERS, VS. COMMISSION ON AUDIT, RESPONDENT.
FACTS
The Commission on Audit (COA) issued 32 Notices of Disallowance (NDs) covering 2009 to 2011, disallowing various allowances and benefits totaling P5,977,610.97 received by officials and employees of the Philippine Charity Sweepstakes Office-Laguna Provincial District Office (PCSO-LPDO). The disallowed items included CNA Incentives, Longevity Pay, Loyalty Awards, Productivity Enhancement Incentives, Rice Allowances, Weekly Draw Allowances, Representation and Transportation Allowances (RATA), and Medical/Dental reimbursements. The COA held the approving and certifying officers, as well as the payees, liable for the refund of these amounts.
The PCSO and the concerned officers and employees filed a Petition for Certiorari, arguing that the disallowed benefits were authorized under PCSO Board Resolutions and its Collective Negotiation Agreement (CNA). They contended that as a government-owned and controlled corporation (GOCC), the PCSO had the corporate autonomy to grant such benefits using its corporate funds, which are distinct from public funds drawn from the National Treasury.
ISSUE
Whether the COA committed grave abuse of discretion in affirming the disallowance of the subject allowances and benefits granted by the PCSO to its officials and employees.
RULING
No, the COA did not commit grave abuse of discretion. The Supreme Court upheld the disallowances. The legal logic is anchored on the fundamental principle that all government entities, including GOCCs like the PCSO, are subject to the constitutional power of the COA to audit all government revenues and expenditures. The Court emphasized that the funds of the PCSO, derived from its operations, are public funds. Their use for personnel benefits remains subject to existing laws, rules, and regulations on compensation, which are primarily administered by the Department of Budget and Management (DBM).
The Court ruled that the PCSO Board’s authority to fix compensation is not absolute and must conform to the policies and guidelines set by the DBM under the Compensation and Position Classification System. Many of the disallowed benefits, such as CNA Incentives and Productivity Enhancement Incentives, were granted without the requisite DBM approval or beyond authorized rates. Others, like Longevity Pay and RATA, were either integrated into standardized salaries or granted to positions not entitled to them. The approving officers were correctly held liable for their certifications and approvals that led to the illegal disbursements. However, the Court noted that passive payees who received the benefits in good faith may be absolved from refund, depending on the specific circumstances and applicable jurisprudence on return.