Province of Camarines vs COA [G.R. No. 227926] Case Digest

 Province of Camarines vs COA

G.R. No. 227926, March 10, 2020

 

Facts:

            To accommodate the growing number of enrollees in public schools, petitioner started hiring in 1999 temporary teaching personnel to handle extension classes of existing public schools, as well as non-teaching personnel in connection with the establishment and maintenance of these extension classes. The salaries of the personnel hired were charged to the Special Education Fund (SEF).

            Audit Team Leader and Supervising Auditor-in-Charge issued Notice of Disallowance No. 2011-200-010(08)8 dated November 15, 2011 disallowing the payments of allowances/honoraria to locally funded teaching and non-teaching personnel of DepEd-Division of Camarines Sur which were charged to the 2008 SEF for the following violations: 1. The payments for the allowances of locally funded teachers were in violation of the provisions of Section 272 of RA 7160 which explicitly provide that the proceeds of Special Education Fund shall be allocated for the operation and maintenance of public schools and DECS-DBM-DILG Joint Circular No. 01 s of 1998 dated April 14, 1998, clarified under JC No. 01-A dated March 14, 2000 and JC No. 01-B dated June 25, 2001 which state that payments of salaries, authorized allowances and personnel-related benefits are only for hired teachers that handle new classes as extension of existing public elementary [or] secondary schools established and approved by DepEd; and others.

            ATL and the Supervising Auditor (SA) maintained that the payments of allowances/honoraria to locally funded teachers were rightfully disallowed for failure to comply with the mandatory requirements of law and joint circulars on the utilization of SEF, particularly the establishment of extension classes wherein the approval of the DECS Secretary, upon the recommendation of the DECS Regional Director is necessary, as well as the certification of the division superintendent concerned of the necessity or urgency of establishing such extension classes.

            In asserting non-culpability, the petitioner attacks the validity of DECS-DBM-DILG Joint Circular No. 1-A, alleging that it constitutes an invalid exercise of the administrative rule-making power of the concerned agencies and violates the principle of local autonomy granted to LGUs.

 

Issue:

            Whether petitioner, through the approving officers, is liable to refund the disallowed fund subject of ND No. 2011-200-101(08) in the total amount of P5,820,843.30.

 

Held:

            No; this provision [Sec.4, Art. X of the 1987 Constitution] has been interpreted to exclude the power of control. In Mondano v. Silvosa, the Court contrasted the President's power of supervision over local government officials with that of his power of control over executive officials of the national government. It was emphasized that the two terms — supervision and control — differed in meaning and extent. The Court distinguished them as follows: In administrative law, supervision means overseeing or the power or authority of an officer to see that subordinate officers perform their duties. If the latter fail or neglect to fulfill them, the former may take such action or step as prescribed by law to make them perform their duties. Control, on the other hand, means the power of an officer to alter or modify or nullify or set aside what a subordinate officer ha[s] done in the performance of his duties and to substitute the judgment of the former for that of the latter.

            In Taule v. Santos, we further stated that the Chief Executive wielded no more authority than that of checking whether local governments or their officials were performing their duties as provided by the fundamental law and by statutes. He cannot interfere with local governments, so long as they act within the scope of their authority. "Supervisory power, when contrasted with control, is the power of mere oversight over an inferior body; it does not include any restraining authority over such body," we said.

            In a more recent case, Drilon v. Lim, the difference between control and supervision was further delineated. Officers in control lay down the rules in the performance or accomplishment of an act. If these rules are not followed, they may, in their discretion, order the act undone or redone by their subordinates or even decide to do it themselves. On the other hand, supervision does not cover such authority. Supervising officials merely see to it that the rules are followed, but they themselves do not lay down such rules, nor do they have the discretion to modify or replace them. If the rules are not observed, they may order the work done or redone, but only to conform to such rules. They may not prescribe their own manner of execution of the act. They have no discretion on this matter except to see to it that the rules are followed.

            In this case, petitioners failed to question the validity of the subject circular at the earliest opportunity. It was only before this Court, that they are now raising the circular's validity vis-a-vis the principle of local autonomy. Our concurrence with respondent on this point, notwithstanding, still, we find that petitioner is not liable to pay for the disallowed funds.

            Under the principle of quantum meruit, a person may recover a reasonable value for the thing he delivered or the service that he rendered. Literally meaning "as much as he deserves," this principle acts as a device to prevent undue enrichment based on the equitable postulate that it is unjust for a person to retain benefit without paying for it.

            It is apparent, based on the rulings of the COA, COA-RO V, Auditor and ATL that, the disallowance was made not because no service was rendered by the concerned recipients. Rather, it was due to the failure of petitioners to comply with the mandatory requirements of DECS-DBM-DILG JCs particularly as to: (1) the prior approval of DECS (now DepEd) Secretary of the extension classes; and (2) the recommendation of the DECS Regional Director. It is only the third requirement, certification by the division superintendent as to the necessity and urgency of establishing extension classes in the LGUs, which petitioners were able to meet.

            In light of the principles of quantum of meruit and unjust enrichment, we find that it would be the height of injustice if the personnel who rendered services for the period in question would be asked to return the honoraria and allowances they actually worked for, simply because the approving officers failed to comply with certain procedural requirements. By necessary implication, it would also be inequitable if the approving officers would be required to shoulder the return of the disallowed funds, even though such were given for actual service rendered.

            Indeed, it cannot be said that the approving officers acted in bad faith as the COA did not question the subject allowances/honoraria from 1999 to 2008. Thus, there were no indicia that would have alerted them that there was something remiss or irregular with the questioned allowance.

            As for the non-teaching personnel, the Court agrees with the petitioner that the authority to expend the SEF for the operation and maintenance of extension classes of public schools carries with it the authority to utilize the SEF not only for the salaries and allowances of the teaching personnel, but those of the non-teaching personnel alike who were hired as a necessary and indispensable auxiliary to the teaching staff. It is beyond question that the services of these non-teaching personnel are essential to the sound and efficient operation and maintenance of these extension classes. Without them, it would be impossible to hold these extension classes as teachers would have to concern themselves not only with their duty to teach, but also the maintenance of classrooms and other logistical needs pertaining to the holding of these extension classes.