RECIPIENTS of disallowed public benefits or allowances cannot invoke good faith as a defense to justify their receipt of illegal monetary releases, a Supreme Court ruling made public recently has stated.
In an en banc ruling promulgated on September 27, 2022 but only made public on February 23 this year, the High Court denied the petition filed by the Philippine Health Insurance Corporation (PhilHealth) challenging the ruling of the Commission on Audit (COA) which had affirmed the notice of disallowance (ND) on PhilHealth’s grant of various allowances amounting to P15, 287,405.63.
Court records showed the various NDs were first received by PhilHealth Regional Office IV-A covering the transportation allowance, project completion incentive, and educational assistance allowance paid to regular and contractual employees for 2009 and 2010.
The COA has said the transportation allowance and project completion incentive given to PhilHealth contractual employees were considered irregular expenditures since job order employees are not entitled to benefits enjoyed by government employees, as stated under COA Circular No. 85-55A.
Meanwhile, the disallowed educational assistance allowance given to regular employees violated the 2009 and 2010 General Appropriations Act.
The case reached the SC after PhilHealth’s appeal before the COA RO IV-A Regional Director and the COA Commission Proper were denied on May 18, 2012 and March 19, 2014 respectively.
The state-run health insurance firm argued they had fiscal autonomy which gave its Board of Directors the exclusive authority to grant the said allowances.
It added PhilHealth officers and personnel who received the questioned allowances and benefits should not be held liable for refund as they received them in good faith.
In junking PhilHealth’s petition, the High Court ruled that the fiscal autonomy enjoyed by PhilHealth under its charter, Republic Act No. 7585, or the National Health Insurance Act of 1995, is not absolute and cannot be the sole basis for the grant of benefits or allowances.
The Court en banc stressed that PhilHealth’s power to fix salaries and allowances is still subject to relevant guidelines and policies as may be issued by the President.
“In the present case, the Court found there was no legal basis for the grant of the disallowed amounts. The grant of transportation allowance and project completion incentive to contractual employees was contrary to the express provision in the job order contracts that the only compensation due to the contractor was the daily rate agreed upon,” said the ruling penned by Associate Justice Rodil Zalameda.
As to the educational assistance allowance given to regular employees, the SC held there is no law or issuance from the Department of Budget Management allowing for such grant.
“The COA correctly upheld the Notice of Disallowances in view of the lack of legal basis for the grant of transportation allowance, project completion incentive, and educational assistance allowance,” the SC said.
Likewise, the SC also ruled that consistent with the guidelines laid down in the 2020 case of Madera vs Commission on Audit, recipients of disallowed benefits are bound to return the amounts, regardless of whether or not they received them in good faith.
The only exceptions, according to the SC, are if such recipients can show that the amounts were genuinely given in consideration of services rendered, or the return is excused based on undue prejudice, social justice considerations, and other bona fide exceptions as may be determined by the Court on a case-to-case basis.
“None of the exceptions apply to the present case,” it added.
As for approving and certifying officers, they are also liable to return the disallowed amounts unless they can show they acted in good faith.
