CASE DIGEST
Abella v. Commission on
Audit Proper
G.R. No. 238940, [April 19, 2022]
EN BANC, LOPEZ, M.V
Administrative Law; Disallowances by COA against extraordinary and miscellaneous expenses to LGU Officials
The appropriation of Extraordinary and
Miscellaneous Expenses (EME) separate from discretionary funds in a local
government's budget, in violation of Section 325(h) of the Local Government
Code, is impermissible. The decision underscores the principle that local government units must
adhere to limitations set by law, and any attempt to circumvent these
limitations through separate appropriations is subject to disallowance.
Additionally, the court affirmed that the good faith or bad faith of the
recipients is inconsequential when disbursements are without legal basis, and
recipients are liable to refund the amounts received.
The case involves the disapproval by the Department of Budget and Management (DBM) Regional Office No. XIII of the separate item for Extraordinary and Miscellaneous Expenses (EME) appropriation in the City of Butuan's annual budget for the fiscal year 2000. The disapproval was based on the violation of Section 325(h)4 of Republic Act (RA) No. 71605 or the Local Government Code of 1991 (LGC), which prohibits appropriations with the same purpose as discretionary funds. Despite seeking reconsideration, the disapproval was affirmed by the DBM. Subsequently, the City Government of Butuan continued to appropriate and grant EME to its officials until 2010, leading to several Notices of Disallowance (NDs) being issued for lack of legal basis. The petitioners, as recipients held liable to settle the disallowances, appealed the NDs, arguing violations of their right to speedy disposition, contesting the propriety of the NDs, and invoking good faith.
Whether
there was a violation of the right to speedy disposition of cases.
NO. The court held that the constitutional
guarantee to a speedy disposition of cases is not violated merely by the length
of time taken for resolution. It emphasized the need to consider factors such
as the complexity of the case, number of transactions involved, and other
relevant circumstances. The court found that the delay in this case was not
arbitrary or oppressive, considering the thorough audit required for 94
disallowances dating back to 2004-2009, and challenges faced by the COA,
including the destruction of records in a fire.
Whether the issuance of the Notice of Disallowance
was proper.
YES. The court upheld the disallowance,
stating that EME and discretionary funds have the same purpose and cannot be
made separate items of appropriation, as per Section 325(h) of the LGC. The
court noted that COA Circulars consistently characterized Extraordinary and
Miscellaneous Expenses (EME) as similar to discretionary expenses. It also
highlighted that the local ordinance circumvented limitations in the LGC and
the General Appropriations Acts by appropriating separate amounts for
discretionary purposes.
Whether good faith can exonerate
petitioners' liability to settle the disallowances.
NO. The court rejected petitioners'
argument that good faith. It clarified that the recipients' good faith or bad
faith is inconsequential, applying principles of solutio indebiti and unjust
enrichment. Recipients are liable to refund if the disbursement is without
legal basis. The court also explained that local autonomy does not preclude
national government intervention, emphasizing compliance with laws and
regulations. Ultimately, the court dismissed the petition, affirming the COA's
decision on the disallowances.
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