GR 245273; (July, 2021) (Digest)
G.R. No. 245273 , July 27, 2021
Philippine Mining Development Corporation, Atty. Lito A. Mondragon, Atty. Jaime T. De Veyra, Zenaida A. Alfonso, and Ma. Nieves Marives D. Santos, Petitioners, vs. Chairperson Michael G. Aguinaldo, Commissioner Jose A. Fabia, Commissioner Isabel D. Agito, The Commissioners, Commission on Audit, Respondents.
FACTS
The Philippine Mining Development Corporation (PMDC), a government-owned and controlled corporation (GOCC) without an original charter, issued a Notice of Award to Fortune Medicare, Inc. for a health care program for its officers and employees, amounting to P602,810.00. COA auditors issued Notice of Disallowance (ND) No. 2013-001 (12), disallowing P582,617.10, citing violations of the Constitution, COA Resolution No. 2005-001, and COA Circular No. 2012-003, and holding certain PMDC officers liable. Petitioners appealed, arguing that as a GOCC governed by the Labor Code, PMDC was not covered by the cited COA rules applicable to civil service employees. The COA Corporate Government Sector denied the appeal, affirming the ND on a new ground: the absence of prior approval from the Office of the President as required by Presidential Decree No. 1597 (PD 1597). The COA Commission Proper affirmed the disallowance with modification, relieving the employees who received the benefits in good faith from refund liability but maintaining the liability of the named officers. Petitioners filed a Petition for Certiorari before the Supreme Court.
ISSUE
Whether the Commission on Audit gravely abused its discretion when it disallowed PMDC’s payment of P582,617.10 for the health care program for its officers and employees for calendar year 2012.
RULING
The Supreme Court dismissed the petition, finding no grave abuse of discretion on the part of the COA. The Court held that PD 1597, which requires prior presidential approval for the grant of allowances and fringe benefits to government employees, remains in force and applies to GOCCs with or without original charters, including PMDC. The Court ruled that PMDC, as a GOCC under the Executive branch, is subject to the President’s power of control and must comply with PD 1597. The Court further held that the COA did not violate due process as it acted within its broad constitutional audit powers, and petitioners were given ample opportunity to be heard. The disallowance was upheld, and the liability of the approving officers was sustained, consistent with the ruling in Madera v. Commission on Audit.