CASE DIGEST
National Power Corp.
Board of Directors v. Commission on Audit
G.R. No. 218052, [January 26, 2021]
EN BANC, LOPEZ, M.V
Powers of COA;Commission on Audit Disallowances; Liability of approving and certifying officers and recipients of the disallowed amounts
Public officials, specifically approving
and certifying officers, who act in bad faith, malice, or gross negligence in
the performance of their official duties, are jointly and severally liable to
the government for the full amount of disallowed payments. The court clarified
that the essence of due process is satisfied when individuals are afforded an
opportunity to be heard, and the court may excuse the return of disallowed
amounts based on undue prejudice, social justice considerations, and other bona
fide exceptions on a case-to-case basis. The absence of legal basis or
justification for disallowed payments may result in individual liability for
recipients.
On February 1, 2010, the NPC Board of
Directors confirmed and ratified Board Resolution No. 2009-72, granting
Calendar Year (CY) 2009 Performance Incentive Benefits (PIB) to NPC
Non-Operation and Maintenance Agreement (NMA)-Small Power Utility Group (SPUG)/Watershed
and Operation and Maintenance (OMA) Head Office and Engineering officials and
employees. The PIB, equivalent to five and one-half monthly basic salaries, was
implemented through NPC Circular No. 2009-585, approved by NPC President and
CEO, Froilan A. Tampinco. The total amount released was P327,272,424.91. The
COA later issued a Notice of Suspension and disallowed the PIB due to lack of
presidential approval and its extravagance, considering NPC-SPUG's net loss in
CY 2009.
Whether
or not the Commission on Audit (COA) Proper is correct in affirming the
disallowance, and holding petitioners liable to refund the disallowed amounts.
YES. The court found that the COA properly
gave notice of disallowance (ND) through constructive service to Tampinco, who
had the duty to inform all involved parties. Despite the late filing of the
appeal to the COA Proper, the essence of due process was satisfied as
petitioners were given an opportunity to be heard. On the merits, the court
held that MO No. 198 did not authorize the PIB for CY 2009, and the grant
violated the specific requirements of MO No. 198, including the lack of a
Productivity Enhancement Program (PEP). The court rejected the argument that
the NPC Board's approval was deemed presidential authorization and emphasized
the non-compliance with statutory provisions.
The court ruled that petitioners, both
approving and certifying officers, are solidarily liable to refund the
disallowed amounts. It affirmed the COA decision, stating that the ND was not
void, unjust, or inequitable, and petitioners failed to show entitlement to the
PIB or any special circumstances justifying non-refund. The court applied
Section 43 of the Administrative Code, holding that officers acting in bad
faith are liable, and emphasized the absence of genuine justifications for the
recipients. The NPC Board of Directors was specified as solidarily liable,
while individual recipients were held individually liable for the amounts
received. The Petition was dismissed, and the COA decision was affirmed.
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