Social Security System v. Commission on Audit [G.R. No. 222217, July 27, 2021]

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Social Security System v. Commission on Audit

G.R. No. 222217, July 27, 2021

EN BANC, ROSARIO, R.

 

COA Appeal Procedure; Notice to Counsel; GOCC Compensation Control; Officer and Recipient Liability

 

For registered mail, the mailing date is deemed the filing date under the COA Rules, and notice to counsel is notice to the client. A GOCC's charter authority to fix compensation does not exempt it from the President's control, through the DBM, over allowances and fringe benefits. An approving officer's good faith may excuse solidary liability, but every recipient — officer or passive payee — must individually return what they received.

 

In 2010, SSS-Western Mindanao Division paid its personnel P7,198,182.96 in Special Counsel Allowance, Short Term Variable Pay, Bank/Christmas Gift Certificates, and Rice Subsidy. On post-audit, the Commission on Audit (COA) issued Notices of Disallowance Nos. 2012-01 and 2012-02, disallowing the payments for exceeding or departing from the DBM-approved 2010 Corporate Operating Budget; the Social Security System (SSS) received the Notices on 28 March 2012. 

SSS claimed it appealed by registered mail on 21 September 2012 — 177 days into the six-month appeal period, leaving only three (3) days — though COA's receiving stamp showed 5 October 2012. The COA Regional Director denied the appeal and required refund; the decision reached SSS's Legal Services Division on 9 January 2014, though the assigned lawyer personally received it on 13 January 2014. SSS filed its Petition for Review with the COA Proper on 17 January 2014, which the COA Proper dismissed as filed beyond the remaining appeal period.

 

 

Whether SSS's appeal to the COA Regional Director, filed by registered mail, was timely, and whether its subsequent Petition for Review to the COA Proper was timely; and whether the approving/certifying officers and the recipients may be held liable for the disallowed P7,198,182.96. 

YES AND NO. The first appeal was timely; the second was not, though the Court relaxed the rule. Under Sec. 3, Rule IX of the 2009 COA Rules, the date of mailing is the date of filing for registered mail; the Court accepted 21 September 2012 as the mailing date, so the first appeal was timely. But notice to counsel is notice to the client — receipt by SSS's Legal Services Division on 9 January 2014 bound SSS, and internal routing to the assigned lawyer could not restart the six-month clock, leaving only the remaining three (3) days. The 17 January 2014 Petition for Review was thus technically late, though the Court relaxed the rule given the short delay, the absence of intent to delay, and counsel's prompt action upon actual receipt. 

On the merits, the disallowance was sustained: GOCCs like SSS remain subject to Presidential supervision and control, and charter authority to fix compensation does not conflict with the President's exercise, through the DBM, of control over allowances and fringe benefits under P.D. No. 1597. SSS paid benefits the DBM had disapproved or capped, without the required Presidential approval, so COA committed no grave abuse of discretion. 

On liability, the Court distinguished officers from recipients: the approving/certifying officers were absolved from solidary liability for good faith, as no prevailing ruling had yet settled the charter-versus-Presidential-approval issue in 2010, but the recipients — whether officers or passive payees — were each individually liable to return what they personally received, the benefits having no legal basis.

 

WHEREFORE, the petition was GRANTED IN PART. COA Proper Decision No. 2015-51 disallowing P7,198,182.96 was AFFIRMED WITH MODIFICATION: the approving/certifying officers were absolved from solidary liability, but the recipients were each held individually liable to return the amounts they received.

 

Full Text: lawphil.net/judjuris/juri2021/jul2021/gr_222217_2021.html