G.R. No. 223547 , April 27, 2021
ENGR. ALEX C. PAGUIO, IN HIS CAPACITY AS GENERAL MANAGER, ANGELINE R. AGUILAR, ADMINISTRATIVE DIVISION MANAGER, EDITA B. ABARQUEZ, BOARD OF DIRECTORS (BOD) SECRETARY, MARIFEL B. PABILONIA, BOD CHAIRPERSON, NINA P. VELASCO, BOD VICE CHAIRPERSON, FRED V. CAPISTRANO, BOD CHAIRMAN, ANGELITO T. BOMBAY, BOD VICE CHAIRMAN, PETITIONERS, VS. COMMISSION ON AUDIT (COA), AND DIRECTOR CLEOTILDE M. TUAZON, COA REGIONAL DIRECTOR, REGION IV-A, RESPONDENTS.

FACTS

Petitioners are officers and members of the Board of Directors of the Pagsanjan Water District (PAGWAD), a government-owned and controlled corporation. In 2009 and 2010, the Board Members received various benefits (extra year-end financial assistance, medical allowance, anniversary bonus, productivity enhancement incentive, communication allowances, and loyalty award) pursuant to board resolutions they issued. On May 10, 2012, the COA issued Notice of Disallowance (ND) No. 2012-100-001(09 & 10), disallowing the aggregate amount of P283,965.00 for lack of legal basis, as the benefits were granted without approval from the Local Water Utilities Administration (LWUA), violating PD No. 198, COA Resolution No. 2004-006, and DBM regulations. Petitioners appealed to the COA Regional Office, which denied the appeal and affirmed the ND in Decision No. 2014-35 dated April 15, 2014. Petitioners received a copy on April 23, 2014. They filed a Petition for Review before the COA Proper on April 30, 2014. The COA Proper dismissed the petition in Decision No. 2015-190 dated April 13, 2015, for being filed out of time, noting that the regional decision had become final and executory. Their motion for reconsideration was denied.

ISSUE

1. Whether the COA Proper committed grave abuse of discretion in dismissing petitioners’ Petition for Review for being filed out of time.
2. Whether the COA Proper committed grave abuse of discretion in sustaining the ND No. 2012-100-001(09 & 10).

RULING

The Petition was dismissed.
1. On the procedural issue, the COA Proper did not commit grave abuse of discretion. The 2009 Revised Rules of Procedure of the COA prescribe a period of six months (180 days) from receipt of an ND to appeal up to the COA Proper. Petitioners received the ND on May 23, 2012, and filed their appeal to the Regional Office on November 14, 2012 (after 175 days). Upon receiving the adverse Regional Decision on April 23, 2014, they had the remaining five days of the 180-day period, or until April 28, 2014, to appeal to the COA Proper. They filed on April 30, 2014, two days late, without explanation. Under PD No. 1445, a COA decision becomes final and executory if not appealed according to its rules. The doctrine of immutability of final judgments applies. The Court found no compelling reason to relax the procedural rules, as petitioners offered no justification for their failure and only made general averments about the decision’s grievous effect on their meager income.
2. On the merits, even assuming liberality, petitioners failed to show grave abuse of discretion in sustaining the disallowance. The COA correctly found the benefits lacked legal basis. The authority of water district boards to prescribe compensation under Section 13 of PD No. 198, as amended, is limited by the requirement of prior LWUA approval, which was absent. The LWUA resolutions and memoranda cited by petitioners (Board Resolution No. 239 and related circulars) were either suspended by Executive Order No. 7 (which suspended allowances, bonuses, and incentives for GOCC board members pending new guidelines) or subsequently overturned by later LWUA circulars. The disallowance was proper. The approving and certifying officers are solidarily liable to refund the disallowed amounts, but the passive recipients (Board Members) are liable only if they acted in bad faith or the disbursement was patently illegal. The case was remanded to the COA Proper to determine the precise nature of each petitioner’s participation and the applicable rules on return.