**Facts:**
This case revolves around Emerita A. Collado, the petitioner, challenging the Commission on Audit (COA) on two primary bases. The dispute originated from the Notices of Disallowance issued against her, relating to the construction of the Philippine Science High School-Mindanao Campus. These notices, which found Collado severally and solidarily liable for erroneously computed liquidated damages, were subsequently upheld by the COA in Decision No. 2002-282 and reaffirmed in 2008 COA Decision. Collado’s subsequent efforts for reconsideration collided with COA’s regulation against second motions for reconsideration, leading her to elevate the matter to the Supreme Court.
Initially, a contract was entered into by the PSHS and N.C. Roxas, Inc. on December 27, 1988, for the construction project, which soon encountered delays, leading to an extension and subsequent notices of disallowance over wrongly computed liquidated damages. Collado, alongside another officer, sought reconsideration, which was denied, leading to an appeal to the COA National Government Audit Office I (COA-NGAO), and then to automatic review by the COA Commission Proper (COA-CP). The COA-CP, in its 2002 decision, denied the motion for reconsideration, which decision Collado sought to review through a petition mistakenly treated as a first motion for reconsideration, leading to the contested 2008 COA Decision.
**Issues:**
1. Whether the COA committed grave abuse of discretion in treating Collado’s Petition for Review as a first motion for reconsideration.
2. Whether the COA erred in finding Collado severally and solidarily liable for the incorrectly computed liquidated damages.
**Court’s Decision:**
The Supreme Court held that:
1. The respondents (COA) correctly treated Collado’s Petition for Review as a motion for reconsideration. According to the Rules of Court, this procedural determination was within the tribunal’s jurisdiction.
2. The petition was filed out of the prescribed period. The Court delineated that procedural timelines must be adhered to, except in cases where a strict application would subvert the essence of justice.
3. On the merits of the case, the COA’s application of formulas prescribed under the IRR of P.D. No. 1594 was upheld. However, the Court recognized that Collado acted in good faith and, given the circumstances, should not be held solidarily liable for the disallowed amounts.
**Doctrine:**
This case reaffirms the principle that administrative decisions, particularly those involving complicated calculations like liquidated damages, are accorded respect and finality when supported by substantial evidence. Additionally, it elucidated the prohibition against second motions for reconsideration within the COA’s procedural rules.
**Class Notes:**
1. *Notices of Disallowance* are formal findings by the COA indicating financial liability on part of individuals or entities for expenditure deemed improper or illegal.
2. *Liquidated Damages* refer to pre-estimated damages agreed upon at the time of contract formation, applicable when a party breaches certain terms, such as project completion timelines.
3. *Administrative Process and Judicial Review*: The case illustrates the pathway from administrative remedy seeking (within COA) to judicial review by the Supreme Court under Rule 64 in relation to Rule 65 of the Rules of Court.
4. *Procedural Timelines*: The importance of adhering to procedural deadlines, particularly the 30-day period for filing petitions for certiorari, is critical, with certain exceptions granted in the interest of justice.
5. *Substantial Evidence* as a standard in administrative review indicates that such evidence is more than a mere scintilla and is relevant evidence that a reasonable mind might accept as adequate to support a conclusion.
**Historical Background:**
This case presents a nuanced understanding of the administrative processes surrounding public construction projects and the stringent oversight exercised by the Commission on Audit on government expenditure. It underscores the balance between adherence to procedural rules and the pursuit of substantial justice, reflecting the judiciary’s role in mediating between these two ends.
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