EN BANC
[ G.R. No. 213789. April 27, 2021 ]
CAGAYAN DE ORO CITY WATER DISTRICT, PETITIONER, VS. COMMISSION ON AUDIT, RESPONDENT.
CONCURRING OPINION
PERLAS-BERNABE, J.:
I concur.
This case involves the disallowance of various allowances, incentives, and benefits authorized by petitioner Cagayan de Oro Water District (COWD) for the period of January 1, 1998 to May 31, 1999 in the aggregate amount of P37,298,458.47,1 by virtue of Certificate of Settlement and Balances (CSB) No. 2002-001 (98 and 99) dated January 31, 2002 issued by the Commission on Audit (COA),2 summarized as follows:
| Expenditures Disallowed |
Payee-Recipients |
Total Amount |
Ground for Disallowance |
1. Honorarium;
2. Representation Allowance;
3. Mid-Year Incentive Pay;
4. Service Incentive Pay;
5. Year-End Incentive Pay
6. Uniform Allowance
7. Amelioration Allowance;
8. Staple Food Allowance;
9. Cash Gift;
10. Per Diems in the form of cash advances for travel;
11. Car Plans and their incidental expenses; and
12. Miscellaneous Expenses
|
COWD Board of Directors (COWD-BOD) |
P4,838,388.15 |
Violation of Section 13 of Presidential Decree No. (PD) 198,3 otherwise known as the "Provincial Water Utilities Act of 1973," as amended, and lack of legal basis. |
| 1. Mid-Year Incentive Pay;
2. Year-End Incentive Pay;
3. Service Incentive Pay;
4. Staple Food Incentive;
5. Health Care Insurance;
6. Per Diems in the form of cash advances for travel;
7. Car Plans and their incidental expenses; and
8. Extraordinary Miscellaneous Expenses
9. Rice Allowance |
COWD personnel |
P26,043,801.46 |
Violation of Section 12 of Republic Act No. (RA) 6758 and lack of legal basis. |
| Cellular Phone Expenses |
COWD personnel |
P132,712.51 |
Violation of COWD Board Resolution No. 069, series of 1995, and Board Resolution No. 037, series of 1998. |
| Hazard Pay |
COWD-BOD and personnel |
P6,178,200.00 |
Violation of DBM National Compensation Circular No. 76 dated 31 March 1995 and lack of factual and legal basis. |
| Donation |
Various religious and charitable organizations |
P105,356.35 |
Violation of Section 29(2), Article VI of the Constitution for lack of public purpose. |
Aggrieved, the COWD appealed the disallowance before the Regional Cluster Director – Regional Legal and Adjudication Office of the COA, but was denied.4 The matter was then elevated to the COA Legal and Adjudication Office – Corporate (COA LAO-C) for further review.
On appeal, the COA LAO-C affirmed the propriety of the disallowance.5 However, it absolved the members of COWD's Board of Directors (COWD-BOD) from refunding the disallowed Honorarium, Representation Allowance, Miscellaneous Expense, Uniform Allowance, and Cash Gift, finding that the same were specifically enumerated and hence, found ostensible legal basis under Local Water Utilities Administration (LWUA) Resolution No. 313, series of 1995, which was only struck down later on January 23, 2002 in the case of Baybay Water District v. COA (Baybay).6 In this regard, the COA LAO-C cited Molen v. COA (Molen),7 wherein the Court had previously excused the return of the same kinds of incentives/allowances on the basis of good faith. However, it directed the refund of "the Mid-year Incentive Pay, Service Incentive Pay, Year-End Incentive Pay, Hazard Pay, Amelioration Allowance, Staple Food Allowance, Per Diems (cash advance for travel), and Car Plan and its incidental expenses," as they were not enumerated in LWUA Resolution No. 313, series of 1995:8
Applying the ratiocination of the Molen case to the case at hand, the "no-refund doctrine" applies only to allowances and benefits granted to the BODs which are specifically enumerated under LWUA Resolution No. 313, series of 1995. Otherwise stated, if the disallowed benefits granted to the BOD are not within the enumerations under the said resolution, the same should be refunded. Thus, only the disallowed Honorarium (inclusive of per diem) and Representation Allowance, Miscellaneous Expense, Uniform Allowance, and Cash Gift need not be refunded. They have to refund, however, the Mid-year Incentive Pay, Service incentive Pay, Year-End Incentive Pay, Hazard Pay, Amelioration Allowance, Staple Food Allowance, Per Diems (cash advance for travel), and Car Plan and its incidental expenses.9 (Emphases and underscoring supplied)
The COA LAO-C then remanded the case to the Audit Team Leader (ATL) to determine and compute the correct amount to be refunded by the members of the COWD-BOD, approving/certifying officers, and COWD personnel:
Accordingly, the ATL of the COWD is hereby instructed to determine and compute the correct amount of disallowance to be refunded by the members of the BOD, organic personnel and other persons liable and to inform this Office on the settlement made thereon.10 (Emphasis supplied)
Dismayed, the COWD moved for reconsideration of the COA LAO-C ruling, which was treated as an appeal to the COA-Proper. Later, in a Decision dated March 22, 2012, the COA-Proper affirmed the decision of the COA LAO-C.11
In its petition before the Court, the COWD argues that the approving/certifying officers and respective payee-recipients of the disallowed amounts should not be held civilly liable for their return on account of their good faith in the grant and/or receipt thereof.12
Nonetheless, following the guidelines recently instituted in the landmark case of Madera v. Commission on Audit (Madera),13 the defense of good faith cannot be appreciated in this case.14
I.
At the onset, it should be pointed out that, as correctly held by the COA,15 the disbursement of MIP, SIP, YIP, Amelioration Allowance, Staple Food Allowance, Per Diems in the form of cash advances for travel, and Car Plans and their incidental expenses granted by the COWD-BOD in their own favor violated the clear prohibition of Section 13 of PD 198, as amended,16 which reads:
Section 13. Compensation. – Each director shall receive a per diem, to be determined by the board, for each meeting of the board actually attended by him, but no director shall receive per diems in any given month in excess of the equivalent of the total per diem of four meetings in any given month. No director shall receive other compensation for services to the district.
Any per diem in excess of P50 shall be subject to approval of the Administration. (Emphases and underscoring supplied)
Indeed, the prohibition under Section 13 of PD 198 that "[n]o director shall receive other compensation for services to the district," except per diems, is plainly worded and straightforward; as such, there should be no reasonable legal interpretation to the contrary. In this regard, the Court in Madera, adopting Associate Justice Marvic M.V.F. Leonen's badges of good faith, held that:
For one to be absolved of liability [on account of good faith,] the following requisites [may be considered] : (1) Certificates of Availability of Funds pursuant to Section 40 of the Administrative Code, (2) In-house or Department of Justice legal opinion, (3) that there is no precedent disallowing a similar case in jurisprudence, (4) that it is traditionally practiced within the agency and no prior disallowance has been issued, [or] (5) with regard the question of law, that there is a reasonable textual interpretation on its legality.1aшphi117 (Emphases and underscoring supplied)
Since the COWD-BOD had not only violated a clear provision of law but also failed to provide any reasonable legal interpretation to justify the same, their disbursement of the MIP, SIP, YIP, Amelioration Allowance, Staple Food Allowance, Per Diems in the form of cash advances for travel, and Car Plans and their incidental expenses in their own favor is tainted with bad faith or gross negligence. This therefore warrants the COWD-BOD's solidary liability to return the same under Rule 2b of the Madera Rules on Return, to wit:
2. If a Notice of Disallowance is upheld, the rules on return are as follows:
a. Approving and certifying officers who acted in good faith, in regular performance of official functions, and with the diligence of a good father of the family are not civilly liable to return consistent with Section 38 of the Administrative Code of 1987.
b. Approving and certifying officers who are clearly shown to have acted in bad faith, malice, or gross negligence are, pursuant to Section 43 of the Administrative Code of 1987, solidarily liable to return only the net disallowed amount which, as discussed herein, excludes amounts excused under the following sections 2c and 2d.18 (Emphasis and underscoring supplied)
At this juncture, it is noteworthy that the Court in Molen and other similar cases19 had previously acknowledged the defense of good faith with respect to amounts paid to members of a water district's board of directors even though they were disbursed in violation of PD 198, considering that they were made prior to the Baybay ruling wherein the Court did not anymore accept LWUA Resolution No. 313, series of 1995 as basis to justify the grant of other compensation other than per diems. The pertinent discussion in Molen relative to Baybay as well as its application of the good faith excuse based on De Jesus v. COA is hereby reproduced for reference:
In Baybay Water District v. Commission on Audit, it was held that the prohibition in Section 13 of P.D. No. 198, as amended by P.D. No. 768, against the grant of additional compensation to board members has not been repealed by R.A. No. 6758. x x x
x x x x
It is, therefore, clear that P.D. No. 198 is the legal basis for determining whether or not the members of the board of directors of MIWD are entitled to the subject benefits. Nowhere in the said law are board of directors granted any other benefits except per diem compensation, found in Section 13 thereof, as amended by P.D. No. 768. By specifying the compensation which a director is entitled to receive and by limiting the amount he/she is allowed to receive in a month, and, in the same paragraph, providing "No director shall receive other compensation" than the amount provided for per diems, the law quite clearly indicates that directors of water districts are authorized to receive only the per diem authorized by law and no other compensation or allowance in whatever form.
Consequently, there is no legal basis for petitioners' assertion that the Local Water Utilities Administration (LWUA) is vested with authority under P.D. No 198," as amended by P.D. Nos. 768 and 1479, to allow local water districts to grant the disallowed benefits to the members of their board of directors by virtue of LWUA Resolution No. 313, series of 1995.
x x x x
Nevertheless, in De Jesus v. Commission on Audit, it was held that the benefits granted under LWUA Resolution No. 313, series of 1995, to the petitioners therein, who were members of the interim board of directors of the Catbalogan Water District, need not be refunded because at the time they received the benefits, the Court had not yet decided Baybay Water District. Petitioners therein had no knowledge that such payment was without legal basis. Good faith was thus considered by the Court in holding that the recipients of the allowances and bonuses disallowed by the COA need not refund the same.
Petitioners herein also received the benefits granted under LWUA Resolution No. 313, series of 1995, in 1995, before the decision in Baybay Water District, which was promulgated in 2002; hence, the aforesaid ruling in De Jesus v. Commission on Audit applies to the instant case.20
However, as may be gleaned from Molen itself and as correctly observed by the COA, the appreciation of good faith in the said case and other such rulings is relative only to those amounts specifically included in LWUA Resolution No. 313, series of 1995, i.e., "rata, travel allowance, extraordinary and miscellaneous expense, Christmas bonus, cash gift, uniform allowance, rice allowance, medical/dental benefits and productivity incentive bonus,"21 since they were disbursed by approving/authorizing officers acting under the honest, yet mistaken, belief that the issuance was lawful.
Conversely, good faith cannot be appreciated for amounts not granted under any ostensible legal basis.22 Therefore, the ponencia is correct in holding that good faith did not attend the grant of the MIP, SIP, YIP, Amelioration Allowance, Staple Food Allowance, Per Diems in the form of cash advances for travel, and Car Plan and their incidental expenses by the COWD-BOD in their own favor, as they were not specifically included in the said issuance.23
Furthermore, it is well to note that the return of the said amounts cannot also be excused on the basis of Rule 2c of the Madera Rules on Return, i.e., for being genuinely given in consideration of services rendered.
In the recent case of Abellanosa v. COA (Abellanosa),24 the Rule 2c exception was clarified. Accordingly, the Court laid down two (2) requisites for its application, none of which attend in this case:
[I]n order to fall under Rule 2c, i.e., amounts genuinely given in consideration of services rendered, the following requisites must concur:
(a) the personnel incentive or benefit has proper basis in law but is only disallowed due to irregularities that are merely procedural in nature; and
(b) the personnel incentive or benefit must have a clear, direct, and reasonable connection to the actual performance of the payee-recipient's official work and functions for which the benefit or incentive was intended as further compensation.
Verily, these refined parameters are meant to prevent the indiscriminate and loose invocation of Rule 2c of the Madera Rules on Return which may virtually result in the practical inability of the government to recover. To stress, Rule 2c as well as Rule 2d should remain true to their nature as exceptional scenarios; they should not be haphazardly applied as an excuse for non-return, else they effectively override the general rule which, again, is to return disallowed public expenditures.
With respect to the first requisite above mentioned, Associate Justice Alfredo Benjamin S. Caguioa (Justice Caguioa) - the ponente of Madera - aptly points out that the exception under Rule 2c was not intended to cover compensation not authorized by law or those granted against salary standardization laws. Thus, amounts excused under the said rule should be understood to be limited to disbursements adequately supported by factual and legal basis, but were nonetheless validly disallowed by the COA on account of procedural infirmities. x x x
x x x x
Aside from having proper basis in law, the disallowed incentive or benefit must have a clear, direct, and reasonable connection to the actual performance of the payee-recipient's official work and functions. Rule 2c after all, excuses only those benefits "genuinely given in consideration of services rendered"; in order to be considered as "genuinely given," not only does the benefit or incentive need to have an ostensible statutory/legal cover, there must be actual work performed and that the benefit or incentive bears a clear, direct, and reasonable relation to the performance of such official work or functions. To hold otherwise would allow incentives or benefits to be excused based on a broad and sweeping association to work that can easily be feigned by unscrupulous public officers and in the process, would severely limit the ability of the government to recover. (Emphases and underscoring supplied)
In particular, the first requisite does not obtain since, as herein explained, the said disbursements lack proper basis in law and were not disallowed based on mere procedural missteps or infirmities.
Likewise, the second-requisite does not attend since the COWD-BOD are not strictly employees of the water district, whose receipt of such incentives/benefits have a clear, direct, and reasonable connection to actual work performed. As opposed to officers and employees performing regular services for the institution, members of a water district's board of directors do not engage – as they are prohibited from engaging – in the management of the affairs of the COWD. As per Section 1825 of PD 198, their functions are limited to policy making.26
In fine, the MIP, SIP, YIP, Amelioration Allowance, Staple Food Allowance, Per Diems in the form of cash advances for travel, and Car Plans and their incidental expenses granted by the COWD-BOD in their favor, which amounts were not excused by the COA, should be solidarily returned by said approving/authorizing officers.
II.
On the other hand, with respect to the MIP, SIP, YIP, Staple Food Incentive, Car Plans and their incidental expenses, Extraordinary Miscellaneous Expenses, Per Diems in the form of cash advances for travel, Health Care Insurance, and Rice Allowance granted by the COWD to its personnel, the defense of good faith is equally unavailing for the approving/certifying officers, considering that they were also disbursed in patent violation of the law and/or administrative issuances.27 While the illegality of the said benefits given to the COWD-BOD stems from a violation of Section 13 of PD 198 which states that no director shall receive other compensation for services to the district, except per diems, on the other hand, the illegality of the benefits given to COWD personnel stems from a violation of Republic Act No. 6758,28 also known as the Salary Standardization Law, Section 12 of which reads:
Section 12. Consolidation of Allowances and Compensation. – All allowances, except for representation and transportation allowances; clothing and laundry allowances; subsistence allowance of marine officers and crew on board government vessels and hospital personnel; hazard pay29; allowances of foreign service personnel stationed abroad; and such other additional compensation not otherwise specified herein as may be determined by the DBM, shall be deemed included in the standardized salary rates herein prescribed. Such other additional compensation, whether in cash or in kind, being received by incumbents only as of July 1, 1989 not integrated into the standardized salary rates shall continue to be authorized.
Hence, following Rule 2b of the Madera Rules on Return, the approving/certifying officers, having acted with bad faith or gross negligence in the disbursement of the aforementioned amounts, should also be held solidarily liable for their return.
Meanwhile, anent the civil liability of the COWD personnel as payee-recipients, the defense of good faith likewise does not obtain. As per Madera, notwithstanding their innocence in receiving the disallowed benefits, they are still individually accountable for the return of the amounts they respectively received on the basis of the principle of solutio indebiti.
During the deliberations of this case, it was argued that the inordinate period in which this case has been pending as well as the adverse effects of the current COVID-19 pandemic may possibly justify the COWD personnel's retention of the aforementioned amounts innocently received on undue prejudice and social justice considerations under Rule 2d of the Madera Rules on Return.
However, in Abellanosa, the Court had already clarified that an excuse of civil liability under Rule 2d should be viewed under the following stringent prism:
In Madera, the Court also recognized that the existence of undue prejudice, social justice considerations, and other bona fide exceptions, as determined on a case-to-case basis, may also negate the strict application of solutio indebiti. This exception was borne from the recognition that in certain instances, the attending facts of a given case may furnish an equitable basis for the payees to retain the amounts they had received. While Rule 2d is couched in broader language as compared to Rule 2c, the application of Rule 2d should always remain true to its purpose: it must constitute a bona fide instance which strongly impels the Court to prevent a clear inequity arising from a directive to return. Ultimately, it is only in highly exceptional circumstances, after taking into account all factors (such as the nature and purpose of the disbursement, and its underlying conditions) that the civil liability to return may be excused. For indeed, it was never the Court's intention for Rules 2c and 2d of Madera to be a jurisprudential loophole that would cause the government fiscal leakage and debilitating loss.30 (Emphases and underscoring supplied)
Thus, bearing in mind Rule 2d's exacting parameters as held in Abellanosa, the Court has adopted my submission that a bare invocation of the aforesaid general circumstances, without more, is insufficient to excuse a return of unlawfully disbursed public funds.
To expound, during the deliberations, I highlighted that the above-stated proffered reasons (i.e. the inordinate period that a case has been pending and the adverse effects of the current COVID-19 pandemic) are not peculiar to this case alone but may very well loosely apply to all pending COA cases for the Court's resolution in general. As such, the Court eventually adopted the view that an indiscriminate application of these general circumstances should not be made so as to secure the refund of disallowed amounts under Rule 2d of the Madera Rules on Return. For one, the Court's docket is rife with numerous petitions seeking the review of COA disallowances issued several years or even decades ago against government officers and personnel. These cases are still currently pending before the Court, some of which are expected to be resolved during the present pandemic, which baneful subsistence remains indefinite. For another, the COVID-19 pandemic is a circumstance that affects everyone, including the fiscal agencies of our government which rely on public funds to implement its health policies and protocols. To cite this situation as an excuse under Rule 2d will therefore negate recovery while the pandemic subsists.
Instead of the aforementioned general circumstances, it has been my (and now, the ponencia's) position that the protracted period of three [3] years from the time of disbursement up until the issuance of a notice of disallowance, suspension, or any equivalent notice informing the agency of a possible defect in the disbursement may be considered as a form of undue prejudice under Rule 2d. In this scenario, the innocent payees, most especially the rank and file, would not have been notified at all – even at the first instance – of any alleged illegality/irregularity attending the disbursement; hence, it is natural for them to have already spent the said amounts in good faith for their own personal use during this time period. To my mind, in this niche situation, it would be highly inequitable and unfair to still demand the return.
The foregoing, however, should be contrasted with the scenario where only a short span of time has elapsed from the time of disbursement and issuance of a notice of suspension/disallowance, regardless of the protracted length of time that the case has been pending resolution. In this instance, no undue prejudice exists since the payees are already informed at the first instance of an alleged illegality/irregularity attending the disbursement; hence, their personal expenditure thereof notwithstanding such notice is at their own risk irrespective of the time that the case remains pending before the various adjudicating tribunals. In this other respect, the scales of equity impel that these recipients – who are already put on notice of a possible anomaly attending the funds they have received – be held accountable to the government should the disallowance be eventually affirmed by final judgment.
III.
As a final point, it must be stressed that the other amounts in issue before the Court – namely: (1) Hazard Pay given to the COWD-BOD; (2) Hazard Pay and Excessive Cellular Phone Expenses given in favor of the COWD personnel; and (3) Donations given to various religious and charitable organizations – should also be returned by the erring approving/certifying officers. As correctly observed by the ponencia, solidary liability obtains against them as good faith cannot also be appreciated insofar as such amounts are concerned since they were similarly disbursed in patent violation of law and/or administrative issuances. In turn, the respective recipients of such sums, as indicated in the CSB, are individually liable for their return in accordance with the Madera Rules on Return, subject to the application of the aforementioned three (3) year period in favor of innocent payees under Rule 2d when proper.
The above pronouncements notwithstanding, the Court cannot, as of yet, simply direct the members of the COWD-BOD at that time to refund all the amounts disbursed to them and the payees. This is because records fail to clearly show that the multiple types of disbursements were all approved/authorized by the COWD-BOD; neither do they disclose the identities of the other approving/certifying officers and payees held liable by the COA for the disallowance. As such, a remand of this case is proper to determine the respective identities of the actual persons to be held liable. This is consistent with the COA LAO-C's directive to the ATL:
Accordingly, the ATL of the COWD is hereby instructed to determine and compute the correct amount of disallowance to be refunded by the members of the BOD, organic personnel and other persons liable and to inform this Office on the settlement made thereon.31 (Emphasis supplied)
Once the proper personalities have been determined, civil liability should be exacted based on the rules established in the Madera landmark decision:
E. The Rules on Return
In view of the foregoing discussion, the Court pronounces:
1. If a Notice of Disallowance is set aside by the Court, no return shall be required from any of the persons held liable therein.
2. If a Notice of Disallowance is upheld, the rules on return are as follows:
a. Approving and certifying officers who acted in good faith, in regular performance of official functions, and with the diligence of a good father of the family are not civilly liable to return consistent with Section 38 of the Administrative Code of 1987.
b. Approving and certifying officers who are clearly shown to have acted in bad faith, malice, or gross negligence are, pursuant to Section 43 of the Administrative Code of 1987, solidarily liable to return only the net disallowed amount which, as discussed herein, excludes amounts excused under the following sections 2c and 2d.
c. Recipients - whether approving or certifying officers or mere passive recipients - are liable to return the disallowed amounts respectively received by them, unless they are able to show that the amounts they received were genuinely given in consideration of services rendered.
d. The Court may likewise excuse the return of recipients based on undue prejudice, social justice considerations, and other bona fide exceptions as it may determine on a case to case basis.
Thus, as specifically applied in this case:
(1) The members of the COWD-BOD are solidarily liable to return the MIP, SIP, YIP, Amelioration Allowance, Staple Food Allowance, Car Plan and their incidental expenses, Hazard Pay, and Per Diems in the form of cash advances for travel granted by them in their own favor as approving/authorizing officers acting with bad faith/gross negligence pursuant to Madera Rule 26;
(2) Meanwhile, the Honorarium, Representation Allowance, Miscellaneous Expense, Uniform Allowance, and Cash Gift granted by the COWD-BOD in their favor, which was not anymore put at issue, and in fact, already excused by the COA, should not anymore be recovered;
(3) Only those approving and certifying officers, who may include the members of the COWD-BOD, based on the proper identification of the COA upon remand, who acted with bad faith/gross negligence in granting the: (a) MIP, SIP, YIP, Staple Food Incentive, Car Plans and their incidental expenses, Extraordinary Miscellaneous Expenses, Hazard Pay, Excessive Cellular Phone Expenses, Per Diems in the form of cash advances for travel, Health Care Insurance, and Rice Allowance to COWD personnel; and (b) Donations to various religious and charitable organizations are solidarily liable for their return pursuant to Madera Rule 2b; and
(4) The payees of each of the disbursements listed in the immediately preceding item 3 above, as identified in the CSB, are individually liable for the return of the amounts they respectively received pursuant to Madera Rule 2c.
The return of a particular amount, however, may be completely excused if it is shown that three (3) years have already elapsed from the time of disbursement up until the issuance of the CSB, or any equivalent notice informing the COWD of the illegality of the disbursement. Without prejudice to the findings of the COA upon remand, this equitable excuse under Madera Rule 2d may apply to the allowances/benefits released in favor of the COWD personnel, as innocent payee-recipients, from the period of January 1, 1998 to January 31, 1999, considering that CSB No. 2002-001 was dated more than three (3) years thereafter, or on January 31, 2002. Conversely, as pointed out in the ponencia, those allowances/benefits received by such personnel from February 1, 1999 to May 31, 1999, are not excused.32
ACCORDINGLY, I vote to PARTIALLY GRANT the petition and AFFIRM the assailed Commission on Audit ruling with MODIFICATION, holding: (1) the members of petitioner Cagayan de Oro Water District's Board of Directors (COWD-BOD) who have acted in bad faith or with gross negligence, solidarily liable for the return of the MIP, SIP, YIP, Amelioration Allowance, Staple Food Allowance, Car Plan and their incidental expenses, Hazard Pay, and Per Diems in the form of cash advances for travel granted by them in their own favor; (2) the identified approving/certifying officers of the Cagayan de Oro Water District (COWD), which may include the COWD-BOD, who have acted in bad faith or with gross negligence, solidarily liable for the return of the (a) MIP, SIP, YIP, Staple Food Incentive, Car Plans and their incidental expenses, Extraordinary Miscellaneous Expenses, Hazard Pay, Excessive Cellular Phone Expenses, Per Diems in the form of cash advances for travel, Health Care Insurance, and Rice Allowance given to the COWD personnel, with the exception of those amounts released during the period of January 1, 1998 to January 31, 1999 which may be excused based on Rule 2d of the Madera Rules on Return as discussed in this Opinion; as well as (b) Donations to various religious and charitable organizations; and (3) the payees of the amounts in item 2 as identified in the CSB, individually liable for the amounts they respectively received, with the exception of those amounts given to the COWD personnel from the period of January 1, 1998 to January 31, 1999 which may be excused as discussed. The case should be REMANDED to the Commission on Audit as herein stated.
Footnotes
1 Notably, records show that the disallowance actually amounted to a sum total of P37,298,458.47 (see rollo, p. 28), albeit the amount of P37,363,278.47 was indicated in the subject-heading and opening paragraph of COA LAO-C Decision No. 2008-043 dated July 29, 2008 (see rollo, p. 26).
2 Rollo, p. 26.
3 Entitled "DECLARING A NATIONAL POLICY FAVORING LOCAL OPERATION AND CONTROL OF WATER SYSTEMS; AUTHORIZING THE FORMATION OF LOCAL WATER DISTRICTS AND PROVIDING FOR THE GOVERNMENT AND ADMINISTRATION OF SUCH DISTRICTS; CHARTERING A NATIONAL ADMINISTRATION TO FACILITATE IMPROVEMENT OF LOCAL WATER UTILITIES; GRANTING SAID ADMINISTRATION SUCH POWERS AS ARE NECESSARY TO OPTIMIZE PUBLIC SERVICE FROM WATER UTILITY OPERATIONS, AND FOR OTHER PURPOSES," approved on May 25, 1973.
4 See ponencia, p. 2.
5 See rollo, pp. 29-34. See also ponencia, pp. 6-8.
6 425 Phil. 326 (2002).
7 493 Phil. 874 (2005).
8 See rollo, p. 30.
9 Id.
10 Id. at 34.
11 See ponencia, pp. 7-9.
12 Rollo, pp. 4-22.
13 See G.R. No. 244128, September 8, 2020.
14 See ponencia, pp. 17-28.
15 See rollo, pp. 29-30.
16 By Presidential Decree No. 768, entitled "AMENDING PRESIDENTIAL DECREE No. 198 ENTITLED "DECLARING A NATIONAL POLICY FAVORING LOCAL OPERATION AND CONTROL OF WATER SYSTEMS; AUTHORIZING THE FORMATION OF LOCAL WATER DISTRICTS AND PROVIDING FOR THE GOVERNMENT AND ADMINISTRATION OF SUCH DISTRICT; CHARTERING A NATIONAL ADMINISTRATION TO FACILITATE IMPROVEMENT OF LOCAL WATER FACILITIES; GRANTING SAID ADMINISTRATION SUCH POWERS AS ARE NECESSARY TO OPTIMIZE PUBLIC SERVICE FROM WATER UTILITY OPERATIONS, AND FOR OTHER PURPOSES," approved on August 15, 1975.
17 See Madera v. COA, supra, citing Associate Justice Leonen's Separate Concurring Opinion, pp. 8 and 13.
18 See Madera v. COA, supra.
19 See: Barbo v. COA, 589 Phil. 289 (2008); Magno v. COA, 558 Phil. 76 (2007); Querubin v. COA, 477 Phil. 919 (2004); De Jesus v. COA, 466 Phil. 912 (2004); De Jesus v. COA, 451 Phil. 812 (2003).
20 Molen v. COA, supra note 7.
21 Molen v. COA, id. See also: Barbo v. Commission on Audit, supra note 19; and Catindig v. People, 616 Phil. 718-739 (2009).
22 See Oriondo v. Commission on Audit, G.R. No. 211293, June 4, 2019, where the Court ruled that:
The present case is different from Blaquera v. Alcala and De Jesus v. Commission on Audit where this Court enjoined the refund of the disallowed amounts. Both cases had ostensible legal bases on which the recipients honestly believed that the disallowed amounts paid were due to them.
x x x x
x x x In De Jesus, Local Water Utilities Administration's Resolution No. 313, series of 1995 ostensibly authorized the payment of the allowances and bonuses.
Unlike in Blaquera and De Jesus, no such ostensible legal basis was presented in this case. There was no reason for petitioners to honestly believe that another set of honoraria and cash gifts, by reason of their ex-officio positions in Corregidor Foundation, Inc., were due them. It cannot be said that they received the disallowed amounts in good faith. (Emphasis and underscoring supplied)
23 See rollo, pp. 29-30.
24 See G.R. No. 185806, November 17, 2020.
25 Section 18. Functions limited to Policy-Making. - The function of the board shall be to establish policy. The Board shall not engage in the detailed management of the district. (Emphasis supplied)
26 See Baybay Water District v. COA, supra note 6.
27 See ponencia, pp. 19-22.
28 Entitled "AN ACT PRESCRIBING A REVISED COMPENSATION AND POSITION CLASSIFICATION SYSTEM IN THE GOVERNMENT AND FOR OTHER PURPOSES," otherwise known as the "Compensation and Position Classification Act of 1989," approved on August 21, 1989.
29 Hazard pay in this case, while listed in Section 12 of RA 6758, was further denied because of lack of factual basis; see ponencia, p. 21.
30 Abellanosa v. COA, supra note 24.
31 Rollo, p. 34.
32 See ponencia, pp. 28-29.
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