CASE DIGEST
Ngalob v. Commission on
Audit
G.R. No. 238882, [January 5, 2021]
EN BANC, LOPEZ, M.V
Powers of COA;Commission on Audit Disallowances; Grave abuse of discretion; Net Disallowed Amount
The burden of proving the validity or
legality of the grant of allowances, benefits, or compensation lies with the
government agency or entity granting, or the employee claiming them. Good faith
is not a defense to excuse the liability of the recipients to return the disallowed
amounts. The mere receipt of public funds without valid basis or justification,
regardless of good faith or bad faith, is considered undue benefit, giving rise
to the obligation to return the amounts received.
On August 28, 2009, the Cordillera Administrative Region (CAR) - Regional Development Council (ROC) Executive Committee (ExCom), headed by petitioner Juan B. Ngalob, issued RDC ExCom Resolution No. 73, authorizing incentives for the period January to June 2008 and quarterly releases for the third and fourth quarters of 2009 to compensate RDC-CAR officials and secretariat for "extra work" related to the RDC-CAR Work Program on Development and Autonomy. A similar resolution, CAR-103, was issued on December 10, 2010, granting year-end incentives. Disbursements totaling P1,095,000.00 and P1,080,000.00 were made for these incentives. The Commission on Audit (COA) disallowed these amounts for lack of legal basis, charging petitioners with liability for the transactions.
Whether or not the Commission on Audit
(COA) Proper properly disallowed the amounts for lack of legal basis of incentives.
YES. The COA-CAR ruled that social
preparation for autonomy is a regular function of the RDC-CAR, not a special
project, and there was no appropriation for incentives or honoraria in the
RDC-CAR's Personal Services (PS) account under the 2009 and 2010 General
Appropriations Acts (GAAs). The COA found no factual and legal basis for the
incentives, and the Supreme Court (SC) upheld these rulings, emphasizing the
burden on the government agency to prove the legality of grants and the failure
of RDC-CAR to provide evidence of a specific project plan, transparent
performance evaluation, and proper appropriation. The SC also clarified the
liabilities, holding that approving and certifying officers are solidarily
liable for refund, given their gross negligence. Payees, including petitioners,
are individually liable to return the amounts without the possibility of justifications
based on good faith. The civil liability of approving or
certifying officers is solidary and is grounded upon the manifest bad faith,
malice, or gross negligence of public officers. On the other hand, the
obligation of payees in a disallowed transaction is based on civil law principles
of solutio indebiti and unjust enrichment. The mere receipt of public funds
without valid basis or justification, regardless of good faith or bad faith, is
considered undue benefit, giving rise to the obligation to return the amounts
received.
In conclusion, the SC dismissed the
petition, finding no grave abuse of discretion in the COA's decision and
affirming the liabilities of petitioners for the disallowed amounts.
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