G.R. No. 230628 - SMALL BUSINESS CORPORATION, VS. COMMISSION ON AUDIT.D E C I S I O N - Supreme Court E-Library

Ruling

WHEREFORE, foregoing premises considered, the appeal for the Notice of Disallowance to be reversed and set aside and subject merit increase be allowed in audit is hereby denied. This Office affirmed the Notice of Disallowance No. 14-001-401-000-(13) dated August 27, 2014. [14] The Ruling of the COA En Banc Undaunted, petitioner elevated the matter to the. COA En Banc via a Petition for Review. In the presently assailed COA Decision dated February 16, 2017, however, the COA En Banc denied the Petition for Review, and upheld the validity of the ND. The COA En Banc first observed that, despite the provision in the petitioner's charter exempting it from the coverage of the Salary Standardization Law and authorizing the BOD to fix the organizational and compensation structures of its officers and employees, this does not give SB Corp. an absolute financial independence. [15] The COA En Banc then went on to rule that Sec. 9 of EO No. 7 applied to the petitioner's grant of merit increases to the five officers, because EO No.7 was already in effect when the merit increases were granted. Moreover, the COA En Banc noted the June 25, 2014 letter of petitioner to the GCG, and held that the letter is tantamount to petitioner's recognition not only of GCG's jurisdiction over it but also an acknowledgment that petitioner has no authority to solely grant the merit increase. Hence, the COA En Banc held: WHEREFORE , premises considered, the Petition for Review is hereby DENIED . Accordingly, Commission on Audit Corporate Government Sector Cluster 2 Decision No. 2015005 dated April 29, 2015 sustaining Notice of Disallowance No. 14-001-401000-(13) dated August 27, 2014 on the payment of merit increase to five officers of Small Business Corporation for the period of September 1, 2012 to August 31, 2014, in the total amount of P759,042.41, is AFFIRMED . [16] Hence, the present Petition for Certiorari under Rule 64 in relation to Rule 65 of the Rules of Court. In its Comment dated September 8, 2017, respondent COA, through the Office of the Solicitor General, argues that petitioner is estopped from denying GCG's authority over it, and from questioning the applicability of EO No. 7 to the merit increases subject of the present controversy. Respondent cites the letter dated June 25, 2014 to GCG, which, to the COA, is a clear indication that petitioner sought approval of GCG to implement the merit increases. [17] Moreover, respondent contends that there was no retroactive application of EO No. 7 because the June 1, 2009 staffing pattern did not yet grant or implement the questioned merit increases but merely revised the organizational structure, staffing pattern, qualification standards, and salary structure of petitioner. The moratorium imposed by EO No. 7 was only applied to the merit increases granted on April 12, 2013. [18] The Issues Petitioner posits the following issues in the present Petition: RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT HELD THAT THE BO