G.R. No. 153266 -

Ruling

Accordingly, the Commission on Audit (COA) disallowed the payments of honoraria and other allowances which were deemed integrated into the standardized salary rates. Employees of government-owned or controlled corporations questioned the validity of CCC 10 due to its non-publication. In De Jesus v. Commission on Audit , [5] this Court declared CCC 10 ineffective because of such non-publication. Until then, it ordered the COA to pass on audit the employees' honoraria which they were receiving prior to the effectivity of R.A. 6758. Meanwhile, the DBM also issued Budget Circular 2001-03 dated November 12, 2001, [6] clarifying that only the exempt allowances under Section 12 of R.A. 6758 may continue to be granted the employees; all others were deemed integrated in the standardized salary rates. Thus, the payment of allowances and compensation such as COLA, amelioration allowance, and ICA, among others, which were already deemed integrated in the basic salary were unauthorized. The Court's ruling in subsequent cases involving government-owned or controlled corporations followed the De Jesus ruling. On May 16, 2002 employees of the Office of the Solicitor General filed a petition for certiorari and mandamus in G.R. 153266, questioning the propriety of integrating their COLA into their standardized salary rates. Employees of other offices of the national government followed suit. In addition, petitioners in G.R. 159007 questioned the disallowance of the allowances and fringe benefits that the COA auditing personnel assigned to the Government Service Insurance System (GSIS) used to get. Petitioners in G.R. 173119 questioned the disallowance of the ICA that used to be paid to the officials and employees of the Insurance Commission. The Court caused the consolidation of the petitions and treated them as a class suit for all government employees, excluding the employees of government-owned or controlled corporations and government financial institutions. [7] On October 26, 2005 the DBM issued National Budget Circular 2005-502 [8] which provided that all Supreme Court rulings on the integration of allowances, including COLA, of government employees under R.A. 6758 applied only to specific government-owned or controlled corporations since the consolidated cases covering the national government employees are still pending with this Court. Consequently, the payment of allowances and other benefits to them, such as COLA and ICA, remained prohibited until otherwise provided by law or ruled by this Court. The circular further said that all agency heads and other responsible officials and employees found to have authorized the grant of COLA and other allowances and benefits already integrated in the basic salary shall be personally held liable for such payment. The Issues Presented The common issues presented in these consolidated cases are: 1. Whether or not the COLA should be deemed integrated into the standardized salary rates of the concerned government employ