GR 252092; (March, 2023) (Digest)
G.R. No. 252092, March 14, 2023
SOPHIA T. BORJA, MA. ETHEL P. GIBE, MARY GRACE DG. CORPUZ, JOY T. AGUDIA, AUREA C. COSIO, WILFREDO B. COLLADO, MYRNA D. MALABAYABAS, EVELYN F. JAVIER, EDUARDO JIMMY P. QUILANG, RIZAL G. CORALES, RENATO B. BAJIT, MANUEL JOSE C. REGALADO, GLENDA DC. RAVELO, LEO C. JAVIER, CAESAR JOVENTINO M. TADO, RHEMILYN Z. RELADO, BABYLINDA O. REYES, PETITIONERS, VS. COMMISSION ON AUDIT (COA) RESPONDENT.
FACTS
On November 5, 2008, the Philippine Rice Research Institute (PhilRice), through its Board of Trustees (BOT), established a car plan scheme to attract and retain outstanding officials and employees. The scheme allowed qualified officials and employees to procure vehicles through a financing scheme with the Philippine National Bank (PNB) for three years. These privately-owned, green-plated vehicles were then rented to PhilRice for official use in its central station and various branches. The rental payments were used by the employees to pay their vehicle loans. The scheme was implemented pursuant to administrative orders issued by the PhilRice Executive Director, which were based on an OGCC opinion and noted/confirmed by the BOT. In 2013, COA auditors issued 26 Notices of Disallowance (NDs) aggregating PHP 10,449,557.45 for expenses incurred using these rented private vehicles. COA disallowed the expenses on grounds that the scheme: 1) lacked Presidential approval as required by P.D. No. 985; 2) contravened austerity measures under A.O. No. 103, s. 2004; 3) was not an exempt allowance under R.A. No. 6758; 4) was not approved in accordance with P.D. No. 1597; and 5) violated the prohibition on conflicts of interest under R.A. No. 6713 and the constitutional ban on double compensation. Petitioners, who were either car owners or approving officers for the disbursements, appealed. The COA Regional Director affirmed the NDs but excluded the disallowance of drivers’ salaries. The COA Proper, in Decision No. 2018-193, partially approved the petition, affirming the NDs but also excluding the drivers from liability for their disallowed salaries while holding them liable for disallowed per diems. Upon motion for reconsideration, the COA Proper, in Decision No. 2020-176, partially granted it by lifting the disallowances on drivers’ salaries, per diems, and other incidental expenses, but AFFIRMED the disallowance of the car rental payments totaling PHP 10,147,635.62. Petitioners filed the instant Petition for Certiorari.
ISSUE
Whether the Commission on Audit committed grave abuse of discretion in affirming the disallowance of the car rental payments under the PhilRice car plan scheme and in holding the petitioners solidarily liable for refund.
RULING
No, the Commission on Audit did not commit grave abuse of discretion. The Supreme Court dismissed the petition and affirmed the assailed COA issuances.
The Court held that the car plan scheme was correctly disallowed as it constituted an unauthorized incentive. The PhilRice BOT’s approval of the scheme did not comply with the requirement under Section 2 of P.D. No. 985 that additional financial incentives for public employees occupying technical positions must have prior Presidential approval. The scheme also violated the constitutional prohibition under Article IX-B, Section 8 against receiving additional compensation unless specifically authorized by law, as the rental payments effectively served as a subsidy for the employees’ car amortizations, constituting an indirect benefit beyond their standardized salaries. Furthermore, the scheme created a prohibited conflict of interest under Section 7 of R.A. No. 6713, as the employee-car owners had a financial interest in transactions (the rental payments) requiring the approval of their office. The Court rejected the defense of good faith, ruling that petitioners, as accountable officers, are presumed to know the relevant laws and circulars. Their reliance on the BOT’s approval and the issued administrative orders did not constitute good faith as these were contrary to existing laws. Following the doctrine in Madera v. Commission on Audit, all approving and certifying officers are solidarily liable for the disallowed amounts. However, the Court noted that passive recipients, such as the drivers who merely received salaries and per diems, may be exempt from refund if they received the amounts in good faith. The core disallowance of the car rental payments, which were received by the employee-car owners, was upheld.