G.R. No. 246313 . February 15, 2022
PHILIPPINE CHARITY SWEEPSTAKES OFFICE, REMELIZA M. GABUYO, ET AL., PETITIONERS, VS. THE COMMISSION ON AUDIT, RESPONDENT.

FACTS

In November 2010, the Laguna Provincial District Office (LPDO) of the Philippine Charity Sweepstakes Office (PCSO) granted several monetary benefits to its personnel. The Commission on Audit (COA) Audit Team Leader issued three Notices of Disallowance (NDs) dated 08 December 2010, disallowing the payments for lack of legal basis. The disallowed benefits and amounts were: (1) Christmas Bonus for CY 2010 (P1,459,050.60), based on a PCSO-SEU Collective Negotiation Agreement (CNA) and a PCSO Board Resolution; (2) Weekly Draw Allowance (P40,200.00), based on the CNA; and (3) Staple Food Allowance, Hazard Pay, Cost of Living Allowance (COLA), and Medicine Allowance (P101,816.89), based on the CNA, with COLA already integrated into basic salary per the Salary Standardization Law (RA 6758). The total disallowed amount was P1,601,067.49. Petitioners initially failed to appeal on time. After seeking reconsideration, the COA Assistant Commissioner allowed the appeal. The COA Regional Director affirmed the NDs. The COA Proper initially dismissed the petition for review for being filed out of time but later granted reconsideration and resolved the case on its merits, affirming the disallowance. The COA Proper held that the PCSO Board’s power to fix compensation is not absolute and is subject to pertinent laws, that a claimed post facto approval from the Office of the President was invalid, and that while employee-recipients need not refund amounts received in good faith, the approving/certifying officers were liable.

ISSUE

Whether the Commission on Audit committed grave abuse of discretion in affirming the disallowance of the monetary benefits granted by the PCSO-LPDO to its personnel.

RULING

No, the Commission on Audit did not commit grave abuse of discretion. The Petition was denied for lack of merit. The Court held that the COA Proper did not merely apply technicalities but relaxed its rules and considered the merits. The PCSO Board’s authority to fix salaries and benefits under its Charter (RA 1169) is not plenary and is subject to pertinent compensation laws and review by the Department of Budget and Management (DBM). The disallowed allowances (Weekly Draw, Staple Food, COLA, Medicine) are deemed integrated into the standardized salary under Section 12 of RA 6758 (SSL) and are not among the exceptions; their separate grant requires DBM or Presidential approval, which was lacking. The Christmas Bonus, granted as a one-time benefit, also lacked the required approval from the Office of the President pursuant to DBM Budget Circular No. 2006-1. The alleged post facto approval via a letter from the Executive Secretary was correctly deemed invalid by the COA, as it was not an omnibus approval of past grants violating compensation laws. The principle of non-diminution of benefits does not apply as the disallowed benefits were not part of the employees’ compensation for a reasonable length of time to create a vested right. Following the doctrine of Madera v. Commission on Audit, recipients who received the disallowed amounts in good faith are not liable to refund, but the approving and certifying officers are solidarily liable for the total disallowed amount, as they are presumed to have known the relevant rules and acted with negligence in granting unauthorized benefits.