G.R. No. 247228 (Formerly UDK 16410) - HAGONOY WATER DISTRICT, CELESTINO S. VENGCO, AND REMEDIOS M. OSORIO, VS. COMMISSION ON AUDIT (COA).D E C I S I O N - Supreme Court E-Library

Ruling

WHEREFORE , premises considered, we concur and affirm the stand taken by the ATL of HWD and Supervising Auditor of the Water District Audit Group as stated under ND No. 2013-001-HWD(2012) in the amount of [P]582,000.00; and ND No. 2013-002-HWD(2012) in the amount of [P]150,000. Consequently, the herein appeal for the lifting of the subject disallowance, is hereby DENIED . [25] (Emphasis in the original.) Aggrieved, petitioners reiterated their arguments in a Petition for Review [26] filed before the COA Proper. COA Proper Ruling In its Decision No. 2017-486, [27] the COA Proper sustained the validity of the two NDs, but ruled that the passive recipients should not be required to refund the amount of the disallowed benefits that they received in good faith. The members of the HWD Board of Directors were also held solidarily liable to refund the disallowed amounts, thus: WHEREFORE , premises considered, the Petitions for Review of the Commission on Audit Regional Office No. III Decision No. 2014-84 dated October 9, 2014 are hereby DENIED for lack of merit. Accordingly, Notice of Disallowance (ND) Nos. 2013-001-HWD(2012) and 2013-002-HWD(2012), both dated November 14, 2013, on the payment of anniversary allowance and rice allowance to the officials and employees of Hagonoy Water District (HWD) for calendar year 2012 amounting to [P]582,000.00, and additional allowances to the members of the Board of Directors (BOD) of HWD, amounting to [P]150,000.00, respectively, are AFFIRMED . However, the passive recipients of the disallowed benefits are not required to refund the amount received in good faith. The Supervising Auditor and the Audit Team Leader are directed to issue a Supplemental ND against the members of the BOD of HWD who issued resolutions relative to the grant of the disallowed transactions. The Prosecution and Litigation Office, Legal Services Sector, this Commission, is hereby directed to forward the case to the Office of the Ombudsman for investigation and filing of appropriate charges, if warranted, against the persons liable for the transactions. [28] (Emphasis in the original.) For failure to raise new matters and show sufficient ground to justify a reconsideration of the COA Decision No. 2017-486, petitioners' motion for reconsideration was denied in the COA Proper Resolution [29] dated November 26, 2018. Thus, the HWD Board of Directors issued Board Resolution No. 005 [30] dated February 27, 2019, authorizing Vengco to file this Petition, challenging the COA Proper Decision No. 2017-486. Petitioners impute grave abuse of discretion on the COA in denying the HWD employees' entitlement to the rice allowance, which had been an established practice since 1993 pursuant to a board resolution. The denial violates the principle of non-diminution of pay. Further, petitioners argue that good faith should be appreciated in favor of the HWD Board of Directors in issuing the board resolution approving the grant of rice allowance in 1992, alleging