G.R. No. 245894 , July 11, 2023
RAQUEL C. MELLORIA, MUNICIPAL ACCOUNTANT, EDUARDA A. CASADOR, MUNICIPAL TREASURER, MUNICIPALITY OF LAAK, PROVINCE OF COMPOSTELA VALLEY, PETITIONERS, VS. DIRECTOR FLERIDA A. JIMENEZ, IN HER CAPACITY AS HEAD, INTELLIGENCE AND CONFIDENTIAL FUNDS AUDIT UNIT, OFFICE OF THE CHAIRPERSON, AND COMMISSION ON AUDIT, RESPONDENTS.

FACTS

The Sangguniang Panlalawigan of Compostela Valley passed Resolution No. 272-2011, confirming the 2011 General Fund Annual Budget of the Municipality of Laak, which totaled PHP 143,892,043.00. Out of this, PHP 18,093,705.00 was allotted for peace and order programs. From this peace and order fund, PHP 13,093,705.00 was specifically allocated for “human rights advocacy” and “community development and monitoring programs,” which included items such as meals and snacks, gasoline, general services, and various capital outlays. For the year 2011, Mayor Reynaldo B. Navarro took cash advances for the Municipality’s intelligence and confidential programs amounting to PHP 4,100,000.00. The COA’s Intelligence/Confidential Funds Audit Unit (ICFAU) issued Notice of Disallowance (ND) No. 2014-12-0013, disallowing PHP 2,600,000.00 of this cash advance. The ICFAU applied Item II.29 of DILG Memorandum Circular No. 99-65, which states that funds for intelligence/confidential activities shall not exceed 30% of the total annual amount allocated for peace and order efforts or 3% of the total annual appropriations, whichever is lower. The ICFAU determined that the items listed under “human rights advocacy” and “community development and monitoring programs” did not fall under the definition of “peace and order programs” provided in Item II.4 of the same circular. After subtracting these non-qualifying items (PHP 13,093,705.00) from the total peace and order program budget (PHP 18,093,705.00), only PHP 5,000,000.00 remained as the valid base amount. Thirty percent of this base is PHP 1,500,000.00, which is lower than 3% of the total annual budget (PHP 4,316,761.29). Therefore, the maximum allowable intelligence fund was PHP 1,500,000.00. Since PHP 4,100,000.00 was advanced, the excess of PHP 2,600,000.00 was disallowed. The ND held Mayor Navarro, Municipal Budget Officer Sonia C. Quejadas, Municipal Accountant Raquel C. Melloria, and Municipal Treasurer Eduarda A. Casador solidarily liable. Petitioners Melloria and Casador appealed to the COA Proper, which affirmed the disallowance. Their motion for reconsideration was denied.

ISSUE

Whether the Commission on Audit gravely abused its discretion in upholding the validity of ND No. 2014-12-0013 and in finding petitioners liable for the disallowance.

RULING

The Court found no grave abuse of discretion on the part of the COA. The COA correctly interpreted DILG MC No. 99-65. The items under “human rights advocacy” and “community development and monitoring programs” (e.g., meals and snacks, gasoline, general services, construction projects) are not akin to the specific enumerations under “peace and order programs” in Item II.4 of the circular, which include purchase of firearms, payment of allowances to PNP/BFP/BJMP personnel, and other related MOOE. The Court agreed with the application of the statutory construction principles of “expressio unius est exclusio alterius” (the express mention of one thing excludes others) and “casus omissus pro omisso habendus est” (a person or thing omitted must be held to have been omitted intentionally). Therefore, these items were properly excluded from the base amount used to compute the 30% limit for intelligence funds. The COA’s factual findings are generally conclusive and binding. The defense of estoppel against the COA was unavailing; the COA is not estopped by the mistakes or errors of its officers, and its constitutional mandate to audit public funds cannot be diminished by such prior actions. However, regarding the liability of petitioners Melloria (Municipal Accountant) and Casador (Municipal Treasurer), the Court applied the doctrine of good faith. Certifying officers who performed purely ministerial duties, without any involvement in the illegal or irregular aspects of the transaction, may be excused from the liability to return the disallowed amounts if they acted in good faith. The Court found that their certifications (as to allotment obligated and availability of funds) were ministerial acts separate from the determination of the legality of the disbursement, which was primarily the responsibility of the approving/authorizing officer (Mayor Navarro) and the budget officer who certified the appropriation. Thus, while the disallowance was upheld, petitioners Melloria and Casador were relieved from solidary liability for the return of the disallowed amount.