G.R. No. 232199 - NATIONAL TRANSMISSION CORPORATION, VS. COMMISSION ON AUDIT AND COA CHAIRPERSON MICHAEL G. AGUINALDO.D E C I S I O N - Supreme Court E-Library

Ruling

WHEREFORE, premises considered, the Petition for Review of National Transmission Corporation, Quezon City, through counsel, is DENIED for lack of merit. Accordingly, Notice of Disallowance (ND) No. TC-10-004(09) dated June 16, 2010, on the payment of excessive separation benefits to Mr. Sabdullah T. Macapodi in the total amount of P883,341.63, is hereby AFFIRMED with MODIFICATION, in that Mr. Macapodi need not refund the said amount. The other persons named liable in the ND shall remain liable, including the members of the Board of Directors, who authorized the payment of the disallowed separation benefits. The Audit Team Leader and Supervising Auditor are instructed to issue a Supplemental ND to include the members of the Board of Directors, who approved the resolutions authorizing said retirement/separation payment scheme, as persons liable. [27] The COA Proper ruled as follows: first , as ruled in Herrera, et al. v. National Power Commission, et al. , [28] employees separated from TRANSCO are entitled to either separation benefits under the EPIRA or retirement benefits under RA 1616, [29] but not to both. [30] Second , TRANSCO's policy allowing the fraction of one year to be considered as one whole year (round up) in the computation of length of service does not have legal basic. [31] Third , the following are jointly and severally liable for the amount disallowed: (a) Singson and Ilagan as approving officers; and (b) TRANSCO's Board for issuing resolutions allowing the excessive payment of separation benefits. [32] However, Macapodi is no longer required to refund the amount, he being a mere passive recipient thereof. [33] Undaunted, TRANSCO, represented by the Office of the General Counsel, [34] filed the present petition. Issues The Court shall resolve two issues: (1) Did the COA Proper gravely abuse its discretion in issuing its assailed Decision? (2) Who shall be liable for the disallowed amount, if any? TRANSCO insists that: (a) the use of multipliers under RA 1616 in addition to the EPIRA rate ( i.e. , 1.5 monthly salary per year of service) was lawful; and (b) the Board and management exercised utmost good faith, and acted within their powers in issuing the subject board resolutions. The Court s Ruling The Court holds that the COA Proper did not commit grave abuse of discretion, but modifies its ruling as to the liability of the persons involved. The COA properly disallowed a portion of the separation benefits paid to Macapodi for violating the EPIRA. The law mandates that "[n]o money shall be paid out of any public treasury or depository except in pursuance of an appropriation law or other specific statutory authority." [35] A disbursement of government funds that is contrary to law shall be disallowed , for being an illegal expenditure . [36] The overpayment of Macapodi's separation benefits to the extent of P883,341.63 is illegal because it violated Sections 63 and 12(c) of the EPIRA. First , Section 63 of the EPIRA provides that an