G.R. No. 250785 , June 22, 2021
INTRAMUROS ADMINISTRATION EMPLOYEES, REPRESENTED BY VICENTE SANTOS, JR., PETITIONER, VS. DIRECTOR COMMISSION ON AUDIT NATIONAL GOVERNMENT SECTOR CLUSTER 7 PUBLIC WORKS TRANSPORT AND ENERGY DEPARTMENT OF TOURISM, RESPONDENT.

FACTS

The Commission on Audit (COA) issued two Notices of Disallowance (NDs) against the Intramuros Administration Employees (petitioner). ND No. 2012-01-161-(09) disallowed the amount of P2,622,668.00 for the payment of an incentive bonus for November 2009. ND No. 2012-02-161-(09) disallowed the amount of P1,557,611.00 for the payment of a Calamity Relief Allowance (CRA) for victims of Typhoon Ondoy for September 2009. The grounds for disallowance were: (1) the payments were made using the revolving fund in violation of Section 15 of Presidential Decree No. 1616; (2) for the incentive bonus, there was no specific law or authority supporting the grant; and (3) for the CRA, the conditions and required supporting documents under the relevant Department of Tourism Office Circular were not met (e.g., it was given to all employees regardless of being severely affected, the amount exceeded the prescribed limit, and lacking applications, sworn statements, and barangay certifications). The persons held liable included the former Administrator, the Chief Administrative Division, and the recipient employees. Petitioner appealed, admitting being remiss in the legality of its actions and appealing for condonation based on empathy for employees affected by Ondoy, the generation of increased revenue, and the burden of refund. The COA Cluster Director and later the COA Proper affirmed the disallowances, with the COA Proper also dismissing the petition for review for being filed out of time (402 days had elapsed from receipt of the NDs).

ISSUE

1. Whether the COA committed grave abuse of discretion in upholding the disallowance of the incentive bonus and CRA.
2. Who shall be liable for the disallowed amounts.

RULING

1. No, the COA did not commit grave abuse of discretion in upholding the disallowances. The Supreme Court found that petitioner failed to prove grave abuse of discretion. The Court noted that petitioner admitted the allowances were given without legal basis and did not offer new arguments regarding their legality, merely claiming good faith in receipt. The disallowances were proper as the disbursements lacked legal authority and violated rules.
2. The petitioner employees are excused from refunding the disallowed amounts. While the disallowances were affirmed as legally correct, the Court, citing humanitarian considerations and social justice, and following its precedent in Madera v. COA, excused the employees from refunding the amounts. The Court recognized that the allowances were intended as financial assistance to alleviate the effects of Typhoon Ondoy. Requiring refund would cause undue prejudice to the employees. The assessment of good faith and regularity is done on a case-to-case basis, and here, the circumstances warranted excusing the return.
DISPOSITIVE PORTION:
The petition was PARTIALLY GRANTED. The COA Decision and Resolution affirming the Notices of Disallowance were AFFIRMED with MODIFICATION in that the petitioner employees need not refund the disallowed amounts totaling P4,180,279.00.