CASE DIGEST
Ricalde v. Commission
on Audit
G.R. No. 253724
(Resolution), [February 15, 2022]
EN BANC, LOPEZ, M.V
Powers of COA; Commission on Audit Notice of Disallowances; Prohibition on the hiring of private lawyers; Liability of Officers for the Disallowed Amounts
Government agencies and
instrumentalities are restricted in their hiring of private lawyers to render
legal services or handle their cases. Public funds cannot be used to pay
private lawyers unless exceptional or extraordinary circumstances exist and the
hiring is accompanied by the written conformity and acquiescence of the OSG and
the written concurrence of the COA. The prohibition covers the hiring of private
lawyers for any form of legal services, regardless of whether it involves an
actual legal controversy or court litigation.
The Bureau of Investments (BOI) entered
into service agreements with lawyers: Atty. Dennis R. Gascon, Atty. Francesca
R. Custodio-Manzano, and Atty. Madonna N. Clarino. The lawyers were assigned to different
offices within BOI to perform various legal services, including reviewing
documents, preparing legal steps for investment incentives, rendering legal
opinions, attending hearings, drafting legislative measures, and providing
legal support. The lawyers received monthly salaries for their services. Notice
of Disallowances (NDs) were issued, covering the salaries paid to the lawyers,
amounting to P797,790.77, citing the lack of conformity from the Office of the
Solicitor General (OSG) and the written concurrence of the Commission on Audit
(COA). Various individuals, including the lawyers and BOI officers, were held
liable for the disallowed transactions. The petitioners seek reversal of COA’s
decision arguing that the lawyers are hired as technical assistants and not as
legal counsel, and that their engagement is justified by the BOI’s dire need of
additional staff.
Whether the COAcorrectly sustained the
disallowance of the payments to Atty. Gascon, Atty. Manzano, and Atty. Clarino,
including the BOI officers' liability
YES. The Court upheld the disallowance,
stating that the hiring of private lawyers without adhering to the circular's
requirements is subject to disallowance. COA Circular No. 86-255 regulates the
government's hiring of private counsels, requiring justification, written
conformity from the OSG, and written concurrence from the COA. The Court upheld
the disallowance, stating that the hiring of private lawyers without adhering
to the circular's requirements is subject to disallowance. The Court rejected
justifications for non-compliance, emphasizing that the circular covers any
legal service, not just litigation, and that general claims of "dire
need" should have been verified by the OSG before hiring.
As regards to officer’s liability over
the disallowances, the Court ruled that the approving and certifying officers'
liability is solidary and extends only to the extent payees are required to
refund. In this case, officers are not liable for the disallowed amount since
payees are allowed to retain their payments. The decision is without prejudice to
any appropriate administrative or criminal actions against responsible
officers.
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