[ G.R. NO. 149633. November 30, 2006 ] 538 Phil. 634
EN BANC
[ G.R. NO. 149633. November 30, 2006 ]
EXECUTIVE DIRECTOR GABRIEL S. CASAL, ACTING DIRECTOR CECILIO SALCEDO AND LUZVIMINDA B. HERRERA, IN HER PERSONAL CAPACITY AND IN REPRESENTATION OF THE RANK-AND-FILE EMPLOYEES OF THE NATIONAL MUSEUM AS PRESIDENT OF THE NATIONAL MUSEUM RANK-AND-FILE EMPLOYEES ASSOCIATION (NMRFEA), PETITIONERS, VS. THE COMMISSION ON AUDIT, RESPONDENTS. D E C I S I O N
CARPIO MORALES, J.:
Challenged via petition for certiorari under Rule 64 vis a vis Rule 65 of the Rules of Court are the Decision dated June 22, 1999 of respondent Commission on Audit (COA) denying the appeal of petitioner Gabriel S. Casal from Notice of Disallowance No. 94-02-101 P(93) and COA Resolution dated August 3, 2001 denying petitioner’s motion for reconsideration of said Decision. Sometime in December 1993, the National Museum granted an incentive award to its officials and employees in the amount of P4,000 each, or a total of P1,162,333.35, pursuant to Provision No. 8 of its Employees Suggestions and Incentive Awards System (ESIAS)[1] approved by the Civil Service Commission (CSC) on December 21, 1992. The COA Resident Auditor at the National Museum, State Auditor III Fe Marie H. Dorado, subsequently inquired from the Department of Budget and Management (DBM) on whether it granted authority to the National Museum to use its savings from its appropriation for personal services to pay the subject incentive award. The DBM, through Director Loida S. Abellera of the Budget and Finance Bureau, by letter dated June 7, 1994, informed Resident Auditor Dorado that it had not received any request for such authorization from the National Museum and that, in any event, the grant of such benefits would not be given due course for lack of legal basis, citing Section 7[2] of Administrative Order (A.O.) No. 268 and Section 2[3] of A.O. No. 29 prohibiting the grant of productivity incentive benefits or other allowances of similar nature unless authorized by the Office of the President. Resident Auditor Dorado thus disallowed the incentive award through Notice of Disallowance No. 94-02-101 P(93) dated July 19, 1994 for being violative of Section 7 of A.O. No. 268 and Section 2 of A.O. No. 29 and also for lack of the requisite authorization from the DBM pursuant to P.D. No. 1177 Section 55.[4] Named in the Notice of Disallowance as “liable” to reimburse were petitioner Gabriel S. Casal, petitioner Cecilio Salcedo, Mrs. Alma Cabrera, and Mrs. Corbina Vergara, for their respective roles in the approval and release of the 1993 Incentive Award,[5] and all National Museum employees who received the award. Petitioner Casal appealed the disallowance to the COA. The appeal was denied by COA Decision No. 99-121 dated June 22, 1999. Casal’s Motion for Reconsideration was also denied by Resolution dated August 3, 2001, the dispositive portion of which reads:
WHEREFORE, premises considered, the instant Motion for Reconsideration of COA Decision No. 99-121 is hereby denied with finality. Accordingly, the liability of the following officials is affirmed.
PERSONS LIABLE
PARTICIPATION
All Recipient Personnel of the N.M. Recipients/payees who received the 1993 Incentive Award Mr. Cecilio Salcedo For approving the payroll and vouchers Mrs. Alma Cabrera For certifying that the cash advances drawn for official purposes and expenditures were under her authority/ direction/ supervision Mrs. Corbina Vergara For certifying adequate availability of funds, supporting documents appearing lemgal and proper[6] On September 17, 2001, petitioner Casal in his capacity as Executive Director of the National Museum, petitioner Salcedo in his capacity as Acting Executive Director in the place of petitioner Casal who by then was on terminal leave, and petitioner Luzviminda B. Herrera, President of the National Museum Rank-and-File Employees Association (NMRFEA), in her personal capacity and as authorized representative of the rank-and-file employees, filed the instant petition[7] which prays for the issuance of a Temporary Restraining Order and Writ of Preliminary Injunction. This Court, on October 2, 2001, issued a Temporary Restraining Order directing the COA to cease and desist from enforcing its Decision dated June 22, 1999, effective immediately and until further orders.[8] The Office of the Solicitor General (OSG), which had filed consecutive motions for extension to file comment on the petition, eventually filed a Motion to Admit Attached Manifestation and Motion in Lieu of Comment.[9] In its Manifestation and Motion, the OSG stated that it was unable to sustain the questioned Decision of the COA and thus prayed that the same, as well as the Resolution dated August 3, 2001 and the Notice of Disallowance No. 94-02-101 P(93) dated July 19, 1994, be set aside. On request of the OSG, this Court gave COA the chance to file its own comment. COA did file its Comment on June 13, 2002, to which petitioners filed a reply. The petition faults the COA:
I
. . . IN ORDERING THE OFFICIALS AND EMPLOYEES OF THE NATIONAL MUSEUM TO REFUND THE SUBJECT INCENTIVE AWARDS OR BONUSES EVEN IN THE ABSENCE OF ANY BAD FAITH OR MALICE ON THE PART OF THE MUSEUM’S WORKFORCE[, AND]
II
. . . IN NOT ADHEREING TO AND APPLYING THE DECISION IN THE LEADING CASE OF BLAQUERA VS. ALCALA ON THE NON-REFUND OF BENEFITS OR BONUSES RECEIVED IN GOOD FAITH BY GOVERNMENT PERSONNEL DESPITE “VIOLATIONS” BY THEIR SUPERIOR OFFICIALS OF EXISTING ADMINISTRATIVE ORDERS AND ISSUANCES REGULATING THE GRANT OF SUCH INCENTIVES.
Since petitioners and the OSG claim that Blaquera v. Alcala[10] is on all fours with the instant case, hence, decisive of the present controversy,[11] a review of the factual circumstances attendant to that case is in order. In Blaquera, officials and employees of several government departments and agencies were paid incentive benefits for the year 1992. On January 19, 1993, however, A.O. 29 was issued by President Ramos reiterating the prohibition under Section 7 of A.O. No. 268 against granting productivity incentive benefits or similar forms of allowances/benefits without prior approval of the President. The same issuance authorized productivity incentive benefits for 1992 only in the maximum amount of P1,000 for each employee. In compliance with Section 4 of the same A.O. 29 which directed all departments, offices, and agencies that overpaid incentive benefits to immediately cause the return or refund of the excess amount within a six-month period, deductions began to be made from the salaries and allowances of the petitioner-employees in Blaquera. The petitioners sought relief from this Court, praying that A.O. 29 and A.O. 268 be declared void. The Court upheld both administrative orders as having been issued in the valid exercise of presidential control over the executive departments. Nonetheless, it held that the therein petitioners could not be required to refund the incentive benefits, there being no indicia of bad faith on the part of all parties involved.[12] In the present case, petitioners assert that they, too, like those in Blaquera, may not be compelled to return or refund the subject incentive benefits since they were released and received by them in good faith. Particularly with regard to petitioner Casal and the other officers held liable for their participation in approving/authorizing the award (“approving officers”), petitioners claim that their failure to observe the relevant administrative orders were mere lapses which are consistent with the presumption of good faith.[13] The Court finds that while the Blaquera ruling maybe invoked by the employees who received the subject award in good faith, the same provides no refuge for the herein petitioners-approving officers due to significant factual distinctions between Blaquera and the instant case. First, while the incentive benefits in Blaquera were for CY 1992 and paid prior to the issuance of A.O. 29 on January 19, 1993, the incentive awards subject of the instant petition were released in December of 1993. When, therefore, the heads of departments and agencies in Blaquera erroneously authorized the incentive benefits to the employee, they did not then have the benefit of the categorical pronouncement of the President in A.O. 29 that
[t]he prohibition prescribed under Section 7 of Administrative Order No. 268 is [thereby] reiterated. Accordingly, all heads of government offices/agencies, including government-owned and/or controlled corporations, as well as their respective governing boards are hereby enjoined and prohibited from authorizing/granting Productivity Incentive Benefits or any and all similar forms of allowances/benefits without prior approval and authorization via Administrative Order by the Office of the President.
The same, however, is not the case with respect to the herein petitioners-approving officers since the subject award was released when A.O. 29 had already been in effect for nearly a year. Moreover, unlike in Blaquera, the prohibition stated in Section 7 of A.O. 268 was brought to the attention of these approving officers by the CSC even prior to the issuance of A.O. 29. Thus, in a letter dated December 21, 1992 addressed to petitioner Casal, then CSC Chairman Patricia A. Sto. Tomas, replying to Casal’s request for approval of the Museum’s ESIAS, stated:
This Commission, after a careful evaluation of the said ESIAS, hereby approves the same, provided that the grant of productivity incentive award under Section 9(e) (sic) thereof be made subject to the result of a comprehensive study being undertaken by the Office of the President in coordination with the Civil Service Commission and the Department of Budget and Management on the matter, as embodied under Section 7 of the Administrative Order No. 268 dated February 21, 1992.[14] (Emphasis and underscoring supplied)
The immediately quoted proviso, it bears emphasis, was annotated on the National Museum’s ESIAS itself, just below the name and signature of Chairman Sto. Tomas signifying the CSC’s approval of said document.[15] When petitioner Casal and the approving officers authorized the subject award then, they disregarded a prohibition that was not only declared by the President through A.O. 268, but also brought to their attention by the CSC by a letter specifically addressed to petitioner Casal and by annotation on the Museum’s ESIAS. Above all, at the time the same officers approved the award, the prohibition in A.O. 268 had already been reiterated by the President via A.O. 29. The failure of petitioners-approving officers to observe all these issuances cannot be deemed a mere lapse consistent with the presumption of good faith. Rather, even if the grant of the incentive award were not for a dishonest purpose as they claimed, the patent disregard of the issuances of the President and the directives of the COA amounts to gross negligence, making them liable for the refund thereof.[16] The following ruling in National Electrification Administration v. COA[17] bears repeating:
Executive officials who are subordinate to the President should not trifle with the President’s constitutional power of control over the executive branch. There is only one Chief Executive who directs and controls the entire executive branch, and all other executive officials must implement in good faith his directives and orders. This is necessary to provide order, efficiency and coherence in carrying out the plans, policies and programs of the executive branch. This case would not have arisen had NEA complied in good faith with the directives and orders of the President in implementation of the last phase of the Salary Standardization Law II. The directives and orders are clearly and manifestly in accordance with all relevant laws. The reasons advanced by NEA in disregarding the President’s directives and orders are patently flimsy, even ill-conceived. This cannot be countenanced as it will result in chaos and disorder in the executive branch to the detriment of public service. (Emphasis supplied)
As to the employees who received the incentive award without participating in the approval thereof, it cannot be said that they were either in bad faith or grossly negligent in so doing. The imprimatur given by the approving officers on such award certainly tended to give it a color of legality from the perspective of these employees. Being in good faith, they cannot, following Blaquera, be compelled to refund the benefits already granted to them. WHEREFORE, the petition is PARTIALLY GRANTED. The Decision dated June 22, 1999 of respondent COA and its Resolution dated August 3, 2001 are declared INVALID only insofar as they hold liable all National Museum employees who merely received the incentive award for CY 1993. Accordingly, the Temporary Restraining Order directed to COA which was issued by this Court on October 2, 2001 is hereby made PERMANENT as to the employees who were held liable to reimburse, merely for receiving the incentive award. The same, however, is LIFTED as to the following: Executive Director Gabriel S. Casal,[18] Acting Executive Director Cecilio Salcedo, Mrs. Alma Cabrera, and Mrs. Corbina Vergara. SO ORDERED. Panganiban, C.J., Puno, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio, Austria-Martinez, Corona, Callejo, Sr., Azcuna, Tinga, Chico-Nazario, Garcia, and Velasco, Jr., JJ., concur.