THE Commission on Audit (COA) has spared former top officials of the National Economic and Development Authority (NEDA) from paying back the agency’s disallowed P73.645 million Cost Economy Measure Award (CEMA).
However, government auditors required agency personnel to refund the sum in full.
The COA partially granted the motions for reconsideration filed by NEDA officials led by Secretary Arsenio Balisacan that sought reversal of a 2017 ruling affirming the disallowance.
Joining the NEDA chief in appealing the COA decision were deputy director general Nestor Mijares IV, Administrative Services director Joseph Melvin Basas, Accounting Service chief Duane Ceniza, chief administrative officer Virginia Atenta, chief accountant Lilinda Pascual, Financial Services director Susana Santos, assistant director Arturo Cebuma Jr., acting director Romeo Telfo, and director Librado Quitoriano.
They challenged the COA pronouncement that CEMA was not authorized by law and that its grant should have the prior approval of the President of the Philippines.
The appellants insisted that the CEMA was anchored on civil service laws and was based on the NEDA Awards and Incentives System (NAIS).
Likewise, they argued that since the CEMA is an award or incentive rather than an allowance, honorarium or fringe benefit, it did not require the imprimatur of the President or the recommendation of the Department of Budget and Management.
The COA Commission Proper however disagreed, invoking the Supreme Court ruling in the cases of Irineo V. Intia Jr. vs Commission on Audit (1999) and Kapisanan ng mga Manggagawa sa Government Service Insurance System (KMG) vs. COA (2004).
In the Intia case, the SC held that the compensation system of government agencies must be reviewed by the DBM.
On the other hand, the KMG case upheld the powers of the DBM and the COA to review the policies of agencies in determining who are entitled to benefits.
The COA reminded the NEDA officials that it is a constitutionally independent body and to detract from its mandated duties, functions, and powers “would render its auditing functions a meaningless and futile exercise.”
“This Commission has extensively discussed the invalidity of the grant of CEMA in the assailed decision. There is no need to discuss the issues anew,” the COA said.
However, it recalled its previous ruling that the NEDA officials are solidarily liable noting that such arises only where the act of approving or certifying a cash incentive was attended by bad faith, malice, or gross negligence as defined by the SC in the 2020 case of Madera vs. COA.
“Following the above ruling, this Commission reconsiders the claim of good faith of the approving/certifying officials. NEDA was never forewarned about the defects in the grant of CEMA as the grant thereof in 2010 was not declared illegal or irregular,” the COA said.
This means however that all NEDA personnel are required to return the cash incentive including those who only received the CEMA without any participation in its approval or certification.
“They are liable to return the amount they each received based on the principle of unjust enrichment. As held in the Madera case, the responsibility to return is a civil obligation to which fundamental civil law principles, such as unjust enrichment and solutio indebiti apply regardless of the good faith,” the commission added.
