DECISION NO.

2019-170
May 23, 2019

Subject: Petition for Review of the officers and employees of Laguna Lake Development
Authority (LLDA), of Commission on Audit Corporate Government Sector-Cluster 4
Decision No. 2015-17 dated August 4, 2015, which affirmed Notice of Disallowance
No. 2014-001-101-(13) dated June 30, 2014 on the payment of corporate anniversary
bonus to LLDA officers and employees for calendar year 2013, in the amount of
P3,642,000.00

DECISION

FACTS OF THE CASE

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Before this Commission is a Petition for Review of Commission on Audit (COA) Corporate Government Sector (CGS)-
Cluster 4 Decision No. 2015-17 dated August 4, 2015, filed by the officers and employees of Laguna Lake Development
Authority (LLDA), through counsel. The decision affirmed Notice of Disallowance (ND) No. 2014-001-101-(13) dated June 30,
2014, on the payment of corporate anniversary bonus to LLDA officers and employees for calendar year (CY) 2013, in the amount
of P3,642,000.00.

The following is a summary of jurisdictional facts of the case:

2
Date of receipt of ND November 10, 2014
3
Date ND was appealed to the Cluster Director (CD) December 3, 2014

Days elapsed from receipt of ND to appeal to the CD 22

4
Date of receipt of decision of the CD August 17, 2015
5
Date Petition for Review was filed January 20, 2016

Days elapsed from receipt of the Director’s decision to filing of petition 156

Total number of days elapsed from receipt of ND to filing of petition 178

From the foregoing, it is shown that the Petition for Review was filed within the 180 days’ or six months’ reglementary
6
period prescribed under Section 3, Rule VII of the 2009 Revised Rules of Procedure of the COA.

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Records show that the LLDA Board of Directors (BOD) passed Resolution No. 452, series of 2013, granting corporate
anniversary package in the amount of P15,000.00 for each qualified officers and employees, in celebration of the 44 th year
anniversary of LLDA on October 22, 2013. The Resolution provides that the cost of implementing the grant in the total amount of
P3,825,000.00 will be charged against the budget provision and/or funds appropriated under Miscellaneous Expenses of
Maintenance and Other Operating Expenses (MOOE), Corporate Operating Budget for CY 2013.

To implement the grant of the corporate anniversary package, the General Manager of LLDA issued Memorandum Order
8
(MO) No. 2013-79 dated September 26, 2013, prescribing the guidelines to be observed in the grant of the benefit.

However, on post audit, the Audit Team Leader and the Supervising Auditor disallowed the disbursement of benefit in the
total amount of P3,642,000.00 under ND No. 2014-001-101-(13), on the ground that the grant contravenes Department of Budget
9
and Management (DBM) National Budget Circular (NBC) No. 452 dated May 20, 1996 since LLDA was not celebrating its
10
milestone year. Moreover, it was stated in the ND that there was no funds available for such benefit because it was charged to
MOOE instead to Personal Services.

The following persons have been determined to be liable for the transaction:

Nature of participation in the

Name
Mr. Casimiro A. Ynares III
Mr. Carlos F. Dolendo
Atty. Francis Tolentino
Ms. Zenaida C. Maglaya
Mr. Cecilio M. Ynares
Mr. Gilbert G. Lozada
Sec. J.R. Nereus O. Acosta
Mr. Roque B. Delas Alas
Position/ Designation
transaction
Approved Resolution No. 452, series
Members of the BOD
of 2013
General Manager/ Vice Approved the Disbursement Voucher
Chairman, Member of the and signed the Authority to Debit
Board Account (ADA)
Officer in charge (OIC), Certified that supporting documents are
Management Services complete and proper, and cash
Department available; and countersigned the ADA

Ms. Aida T. Samiano
Officials and employees
Certified that charges to budget are
necessary, lawful and under her direct
OIC, Administrative Division supervision; and Certified that the
payroll is correct and that the services
have been rendered as stated
Received the corporate anniversary
Payees
package

On December 3, 2014, LLDA filed its appeal memorandum. However, in CGS Cluster 4 Decision No. 2015-17, the CD
denied the appeal and affirmed the ND.

Hence, on January 20, 2016, LLDA filed this Petition for Review raising the following arguments:

1. The grant of the benefit was duly authorized under Board Resolution No. 452, series of 2013 and MO No. 2013-79,
which are anchored on the Office of the Government Corporate Counsel (OGCC) Opinion No. 298,11 series of 1990.

2. The benefit has been continually being enjoyed by the employees prior to 2009. The regularity of the grant gave rise to
vested rights in favor of the LLDA employees.

3. The officials and employees of LLDA received the benefit in good faith, and the refund of which will result in undue
diminution of benefits.

ISSUE

The issue to be resolved is whether or not the grant of anniversary package to LLDA officials and employees is proper.

DISCUSSION

After careful evaluation, this Commission finds the grant of anniversary package to LLDA officials and employee to be
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contrary to law and regulations. Section 2.3 and 2.4 of Administrative Order (AO) No. 263, series of 1996, provides:

2.3 The Anniversary Bonus authorized under this Order shall be granted only during milestone years.

2.4 A milestone year refers to the 15 th anniversary bonus and to every fifth year thereafter.

Based on LLDA Resolution No. 452, the corporate anniversary package was granted upon celebration of its 44 th
anniversary. Clearly, the LLDA anniversary package was not granted during the milestone year because milestone year is
celebrated on the 15 th anniversary and every fifth year thereafter.

Moreover, records of this case show that the benefit was charged to MOOE and not from savings contrary to paragraph 4 of
DBM NBC No. 452, to wit:

4. Funding Source

Th e cost to implement the Anniversary Bonus shall be solely charged from savings released from
allotment for Current Operating Expenses (COE) without the need for prior authority from the Department
of Budget and Management, provided that all authorized mandatory expenses shall have been paid first.
Requests for augmentation of such savings shall not be allowed. (Underscoring supplied)

On the other hand, the OGCC Opinion No. 298 relied upon by the petitioner cannot be the basis of the grant. The opinion is
merely persuasive and has no binding force. Moreover, the vested right mentioned in the OGCC Opinion does not lie against the
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government, as stated by the Supreme Court in Abellanosa, et al. vs. COA:

[T]his Court stated that public officers’ erroneous application and enforcement of the law do not estop the
government from making a subsequent correction of those errors. Where there is an express provision of law
prohibiting the grant of certain benefits, the law must be enforced even if it prejudices certain parties on
account of an error committed by public officials in granting the benefit. Practice, without more - no matter how
long continued - cannot give rise to any vested right if it is contrary to law. (Underscoring supplied)

The claim of good faith cannot likewise be appreciated in the present case as there is a patent disregard of the policy
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pertaining to the grant of the anniversary package. In the case of Casal et al. vs. COA, the Supreme Court ruled the following:

[T]he failure of petitioners-approving officers to observe all these issuances cannot be deemed a mere lapse
consistent with the presumption of good faith. Rather, even if the grant of the incentive award were not for a
dishonest purpose as they claimed, the patent disregard of the issuances of the President and the directives of
the COA amounts to gross negligence, making them liable for the refund thereof. (Underscoring supplied)

Thus, good faith cannot be appreciated as to the LLDA personnel who received the benefits considering that they had
 Thus, good faith cannot be appreciated as to the LLDA personnel who received the benefits considering that they had
committed themselves to refund the benefit, through the execution of “Individual Deed of Undertaking”, in the event that the
15
amount is declared illegal and disallowed by this Commission, as prescribed in MO No. 2013-79. Through their undertaking,
they were made aware of the irregularity of payment of the anniversary package. Thus, they are liable to refund the amount they
had received.

RULING

WHEREFORE, premises considered, the Petition for Review filed by the officers and employees of Laguna Lake
Development Authority (LLDA), through counsel, of Commission on Audit Corporate Government Sector-Cluster 4 Decision No.
2015-17 dated August 4, 2015 is hereby DENIED. Accordingly, Notice of Disallowance No. 2014-001-101-(13) dated June 30,
2014 on the payment of corporate anniversary bonus to LLDA officers and employees for calendar year 2013, in the amount of
P3,642,000.00, is hereby AFFIRMED.

(SGD.) MICHAEL G. AGUINALDO

Chairperson

(SGD.) JOSE A. FABIA (SGD.) ROLAND C. PONDOC

Commissioner Commissioner

Attested by:

(SGD.) NILDA B. PLARAS

Director IV
Commission Secretariat

Copy furnished:

Atty. John Andrew R. De Guzman

Atty. Zenaida R. Lapuz
Atty. Anthony Noel C. Tresvalles
Counsel for Petitioners
Laguna Lake Development Authority
Legal and Adjudication Division
2 nd Floor, LLDA Green Building, National Ecology Center
East Avenue, Diliman, Quezon City

The Supervising Auditor

The Audit Team Leader
Commission on Audit
Laguna Lake Development Authority
National Ecology Center, East Avenue
Diliman, Quezon City

The Directors
Cluster 4, Corporate Government Sector
Information Technology Office, Systems and Technical Services Sector

The Assistant Commissioners

Corporate Government Sector
Commission Proper Adjudication and Secretariat Support Services Sector

All of this Commission

ESZ/EDS/CTS/DVG/WLY_DPA
CPCN 2016-054
1 Pursuant to Rule VII, 2009 Revised Rules of Procedure of the Commission on Audit (COA).
2 Stamp receipt of the Office of the General Manager of Laguna Lake Development Authority, rollo, p. 93.
3 Stamp receipt of the Corporate Government Sector-Cluster 4, rollo, p. 91.
4 Date alleged in the Petition for Review, rollo, p. 42;
5 Stamp receipt of the Commission Secretariat and payment of filing fee per COA Official Receipt No. 8772117L, rollo, pp. 43 and 44.
6 Period of Appeal. - The appeal shall be taken within the time remaining of the six (6) months period under Section 4, Rule V, taking into account the suspension of the
running thereof under Section 5 of the same Rule in case of appeals from the Director’s decision, or xxx.
7 Rollo, p. 148.
8 Rollo, pp. 145-146.
9 Subject: Amplifying and Clarifying the Implementation of the Grant of Anniversary Bonus to Officials and Employees of Government Entities, rollo, pp. 47-49.
10 Under Item 2.4 of Administrative Order No. 263, series of 1996, a milestone year refers to the 15th anniversary and to every fifth year thereafter.
11 Rollo, pp. 1-7.
12 Authorizing the Grant of Anniversary Bonus to Officials and Employees of Government Entities.
13 G.R. No. 185806, July 24, 2012.
14 G.R. No. 149633, November 30, 2006
15 Supra, Note 8.