kristy lou lim

PHILIPPINE ECONOMIC ZONE AUTHORITY (PEZA), PETITIONER,

VS.

 COMMISSION ON AUDIT AND REYNALDO A. VILLAR, CHAIRMAN, COMMISSION ON AUDIT, RESPONDENTS

[ G.R. NO. 189767, JULY 03, 2012 ]

FACTS:

A  PEZA Auditor Corazon V. Españo issued Notice of Disallowance for the payment of per diems to ex officio members of the PEZA Board for the period 2001-2006  amounting to P5,451,500.00.The PEZA Board of Directors who consisted of 13 members which include the Undersecretaries of the Department of Finance, the Department of Labor and Employment, the Department of the Interior and Local Government, the Department of Environment and Natural Resources, the Department of Agriculture, the Department of Public Works and Highways, the Department of Science and Technology and the Department of Energy. Concerned ex officio members prayed that they be allowed to retain the per diems already received as they received them in good faith.  

ISSUE/S:

Does the PEZA have legal basis in granting per diems to the ex officio members of its Board? And if there is no legal basis, was there good faith in PEZA’s grant and the ex officio members’ receipt of the per diems?

RULING:

Definitely, PEZA cannot claim that it was not aware of circumstances pointing to the possible illegality of the disbursements of per diems to the ex officio members of the Board. In Civil Liberties Union, this Court clarified the prohibition under Section 13, Article VII of the Constitution and emphasized that a public official holding an ex officio position as provided by law has no right to receive additional compensation for the ex officio position.

Neither can this Court give credence to PEZA’s claim of good faith.

In common usage, the term “good faith” is ordinarily used to describe that state of mind denoting “honesty of intention, and freedom from knowledge of circumstances which ought to put the holder upon inquiry; an honest intention to abstain from taking any unconscientious advantage of another, even through technicalities of law, together with absence of all information, notice, or benefit or belief of facts which render transaction unconscientious.”

The reason is that these services are already paid for and covered by the compensation attached to his principal office.

WHEREFORE, in light of the foregoing, the present petition is DISMISSED. The assailed COA Decision No. 2009-081 dated September 15, 2009 is AFFIRMED and UPHELD.

No costs.

SO ORDERED.

JOSEPH H. REYES, PETITIONER,

VS.

COMMISSION ON AUDIT, RESPONDENT.

[ G.R. NO. 125129, MARCH 29, 1999 ]

FACTS:

By Resolution the TLRC Executive Committee created a Provident Fund having petitioner Joseph H. Reyes as one of the Board of Trustees, the primary purpose of which was to augment the retirement benefits of the officers and employees of TLRC.  The Fund’s source of capital were from contributions of each member consisting 2% of his gross monthly salary and TLRC’s or the government’s counterpart share to 10% of the member’s gross monthly salary, earnings of funds and others.

The TLRC Provident Fund Board of Trustees issued a resolution, discontinuing the collection of contributions for the Fund from both the TLRC and the members. After Corporate Auditor Adelaida S. Flores suspended the transfer of funds from TLRC to the Provident Fund, amounting to P11,065,715.84. The resolution also ordered immediate refund for members' personal contributions collected. A Board Resolution issued later dissolved the Provident Fund and ordering the distribution of the personal and corporate shares to the members thereof. COA ruled that the government's share in the Provident Fund must be reverted to the TLRC and not be given to the employees.

ISSUE/S:

Whether TLRC and its members be allowed to receive the 10% government's share in the Provident Fund since dissolution was not due to the members' fault.

RULING:

We find that the Commission on Audit did not commit a grave abuse of discretion in disallowing the distribution of the government share in the aborted TLRC Provident Fund to its members. As correctly pointed out by the COA in its decision, the government contributions were made on the condition that the same would be used to augment the retirement and other benefits of the TLRC employees. Since the purpose was not attained due to the question on the validity of the Fund, then the employees are not entitled to claim the government share disbursed as its counterpart contribution to the Fund. Otherwise, it would be tantamount to the use of public funds outside the specific purpose for which the funds were appropriated.
There is no merit to petitioner's claim that the members of the Provident Fund acquired a vested right over the government contributions. "A vested right is one which is absolute, complete and unconditional, to the exercise of which no obstacle exists, and which is immediate and perfect in itself and not dependent upon a contingency,"

What is more, the Provident Fund was dissolved due to lack of statutory basis. Thus, contributions made were unauthorized, if not unlawful.

WHEREFORE, the Court hereby DENIES the petition and AFFIRMS the decision of the Commission on Audit.

No costs.

SO ORDERED.

RAMON ALBERT, PETITIONER,

VS.

CELSO D. GANGAN, IN HIS CAPACITY AS CHAIRMAN, COMMISSION ON AUDIT, ROGELIO ESPIRITU, IN HIS CAPACITY AS COMMISSIONER, COMMISSION ON AUDIT, SOFRONIO URSAL, IN HIS CAPACITY AS COMMISSIONER, COMMISSION ON AUDIT, EMMA M. ESPINA, IN HER CAPACITY AS DIRECTOR, COMMISSION ON AUDIT, AND LAKAMBINI RAZON, IN HER CAPACITY AS THEN RESIDENT AUDITOR FOR NATIONAL HOME MORTGAGE FINANCE CORP., RESPONDENTS.

[ G.R. NO. 126557, MARCH 06, 2001 ]

FACTS:

A sub-program of the Unified Home Lending Program (UHLP), Community Mortgage Program (CMP), was formed by an inter-agency committee of Housing and Urban Development Coordination Council (HUDCC), Presidential Commission for Urban Poor (PCUP), NHMFC, and Home Insurance Guarantee Corporation (HIGC) to conceptualize and prepare the guidelines and procedures. The CMP is an innovative scheme in mortgage financing where residents of blighted or depressed areas can initially own the lots they occupy, and, eventually, to build a decent house thereon to the extent of their affordability within the concept of low-cost-home financing and after due compensation to the landowner.

Sometime Dec. 1989, petitioner approved the payment to the SHGCCI releasing the amount of P36,796,711.55 upon inspection of  the project site and assurance to  petitioner that the project is above board and in accordance with the NHMFC-CMP guidelines by Mr. Rogelio Olaguer, head of the CMP Task Force. When petitioner conducted routine inspection of the AMAKO project it was discovered that the AMAKO project was three (3) months in arrears in their amortization. As a consequence, petitioner, tasked the Committee on Evaluation of Originating Institutions to investigate the originators with respect to their compliance with corporate circulars, other rules and regulations issued by NHMFC regarding its lending programs. One of the originators investigated was the Foundation which was instrumental in the granting of the loan to the AMAKO Project. Petitioner filed with the Ombudsman a letter-complaint against his subordinate employees who appeared to be responsible for the fraud with respect to the AMAKO loan transaction. However, said complaint was withdrawn by petitioner's successor, Acting President Florentino Mauricio, and re-filed with the Civil Service Commission on August 5, 1991.

The COA rendered Decision No. 2700, finding petitioner as among the persons liable for the amount representing the payment of the loan proceeds obtained by AMAKO. COA disallowed the plan payment because it found the payment irregular and an excessive expenditure, and held petitioner primarily liable.

ISSUE/S:

1. Whether or not aggrieved petitioner can be held personally liable for the amount of P36,796,11.55 representing the loan proceeds to AMAKO.

2. Whether or not respondent COA committed a grave abuse of its discretion when it held petitioner personally liable for the payment of the loan proceeds.

RULING:

Court finds the assailed decision failed to mention petitioner's direct participation in the fraudulent scheme. It merely held that petitioner be immediately and primarily held responsible for the disallowance, for the simple reason that, as the approving officer, any transaction presented to him for approval is subject to his discretion. His reliance on the supposed review and evaluation done by his subordinates is also discretionary on his part.

The actions taken by petitioner involved the very functions he had to discharge in the performance of official duties. He cannot, therefore, be held civilly liable for such acts unless there is a clear showing of bad faith, malice or gross negligence. In as much as no evidence was presented to show that petitioner acted in bad faith and with gross negligence in the performance of his official duty, he is presumed to have acted in the regular performance of his official duty. Similarly, it is a basic tenet of due process that the decision of a government agency must state the facts and the law on which the decision is based. The COA decision merely stated conclusions of law. Facts and circumstances, as well as the why's, the what's and the how's of the disallowance, were patently missing, inaccurate or incomplete. The COA cannot just perform its constitutional function of disallowing expenditures of government funds at sheer discretion. There has to be factual basis why the expenditure is alleged to be fraudulent or why was there a misrepresentation. Liability depends upon the wrong committed and not solely by reason of being the head of a government agency. But as to why and how the disbursement of funds in this case was considered disadvantageous must be duly supported by findings of facts.

Consequently, respondent COA committed a grave abuse of its discretion when it held petitioner personally liable for the subject disallowance.

WHEREFORE, the assailed Decision and Resolution of the respondent Commission on Audit are hereby REVERSED and SET ASIDE, insofar as they refer to petitioner.