GR 125129; (March, 1999) (Digest)
G.R. No. 125129 . March 29, 1999. JOSEPH H. REYES, petitioner, vs. COMMISSION ON AUDIT, respondent.
FACTS
The Technology and Livelihood Resource Center (TLRC) Executive Committee created a Provident Fund to augment employee retirement benefits, funded by member contributions (2% of gross monthly salary) and a government counterpart (10% of gross monthly salary). In 1993, the Corporate Auditor suspended the transfer of government funds to the Provident Fund, citing lack of statutory authority for such fringe benefits under the Salary Standardization Law. Consequently, the TLRC Provident Fund Board of Trustees dissolved the Fund and ordered the distribution of both personal and government shares to the members. The Corporate Auditor then issued a Notice of Disallowance for the government’s share, amounting to P11,065,715.84.
Petitioner Joseph H. Reyes, a Board of Trustees member, appealed the disallowance to the Commission on Audit (COA). The COA denied the appeal, ruling that the government’s share must be reverted to TLRC since the Fund’s primary purpose was not attained due to its dissolution. The COA also denied petitioner’s motion for reconsideration, prompting this petition.
ISSUE
Did the Commission on Audit commit grave abuse of discretion in disallowing the distribution of the government’s share in the dissolved TLRC Provident Fund to the employee-members?
RULING
No, the Commission on Audit did not commit grave abuse of discretion. Procedurally, while the petition was erroneously filed as an appeal by certiorari under Rule 44, the Supreme Court treated it as a petition for certiorari under Rule 65, the proper remedy for challenging COA decisions. On the merits, the COA correctly disallowed the distribution. The government’s contributions were conditioned on the specific purpose of augmenting retirement and other benefits for TLRC employees. Since the Provident Fund was dissolved and its purpose unattained due to a lack of legal basis, the employees could not claim a vested right over the government’s share. Allowing such distribution would constitute the use of public funds outside their appropriated purpose. The contributions, being unauthorized without statutory backing, remained public funds that must be reverted to the government. The petition was denied.