ODELON T. BUSCAINO, PETITIONER, VS. COMMISSION ON AUDIT, RESPONDENT.

Buscaino versus Commission on Audit

The Case

This is a petition for certiorari brought by Odelon T. Buscaino, the Director of Fiscal Management Services of the Polytechnic University of the Philippines, against the Commission on Audit. Buscaino asks the Supreme Court to annul the Commission's decision holding him jointly and solidarily liable with the President of the University and other officials and employees for audit disallowances totaling 1,527,176.40 pesos. The case matters because it fixes the boundaries of an accounting officer's liability in audit disallowances and because it insists that due process and evidentiary sufficiency bind the Commission on Audit itself, not only the officials it audits.

Procedural History

The resident auditor of the Polytechnic University of the Philippines issued Certificates of Settlement and Balances disallowing, in audit, an aggregate of 993,933.32 pesos for overpriced purchases of office and school supplies. Buscaino and former University President Pablo Mateo moved for reconsideration. The Commission on Audit affirmed the disallowances in its Decision Number 826, holding Buscaino jointly and severally liable with Mateo and former Vice President Juan Manuel, Junior.

Buscaino sought reconsideration by letter. During its pendency, the resident auditor was replaced, and upon reevaluation the Commission denied reconsideration in Decision Number 1508, which increased the disallowances to 2,379,304.98 pesos and the certificates from four to sixteen, adding three more persons as jointly and severally liable. Buscaino moved for reconsideration again, and on April 12, 1993 the Commission rendered Decision Number 2826, excluding him from liability for the overpricing items amounting to 428,678.12 pesos but keeping him jointly and severally liable for the rest, amounting to 1,527,176.40 pesos. Unable to obtain complete relief, Buscaino came to the Supreme Court by petition for certiorari.

Facts

Buscaino was the Director of Fiscal Management Services of the Polytechnic University of the Philippines, with the position item of Chief Financial Management Officer II. His functions included signing disbursement vouchers and certifying the availability of funds and the legality and propriety of supporting documents. He was also a member of the University's Canvass and Award Committee, which reported the results of every bid or canvass and recommended to the President the award of purchase or service contracts.

The resident auditor disallowed, in audit, purchases of various office and school supplies on the ground of overpricing without public bidding or canvass, and later expanded the disallowances to cover a telephone system, a short delivery of four typewriters, housing allowances of the former President, gasoline and toll gate fees, and emergency purchases made without canvass or purchase order. Buscaino was held liable because he had signed the vouchers as an accounting official, or the abstracts of bids as a member of the Canvass and Award Committee, or both.

To meet the charge of overpricing, Buscaino twice asked the Commission to furnish him the quotations of prices of every item re-canvassed, the names and addresses of the suppliers re-canvassed, the dates of re-canvass, and certified copies of the official forms used. The auditor replied that no such documents had been turned over to him and that he could not produce what he did not have. On the other items, the records showed a Board of Trustees resolution authorizing the housing allowance, delivery receipts, gate passes, inspection reports and a later certification locating the supposedly missing typewriters, and certifications by the University President of the urgency of the emergency purchases.

Issues

• Whether or not the petition for certiorari was filed within the thirty-day reglementary period.
• Whether or not the Commission on Audit committed grave abuse of discretion amounting to lack or excess of jurisdiction in holding Buscaino jointly and solidarily liable with the other University officials and employees for reimbursement of the audit disallowances.

Applicable Provisions

Section 43 of Presidential Decree Number 1177, as invoked in the disallowance of the telephone system payment, provides:

No reaffirmance or revalidation of accounts payable covering prior years' obligations already paid or not shall be allowed, except upon the approval of the President of the Philippines.

The Commission invoked this provision against a payment made out of revalidated accounts payable of prior years obligated in favor of creditors other than the supplier.

Paragraph 2.6 of Audit Circular Number 85-55-A, quoted in the decision, provides:

As regards excessive expenditures, they shall be determined by place and origin of goods, volume or quantity of purchase, service warranties/quality, special features of units purchased and the like.

This provision supplies the standards by which overpricing must be established, and the Court used it to show that the Commission never demonstrated that its own standards were met.

Ruling

On the first issue, the Court held that the petition was timely. The thirty-day period ran from Buscaino's receipt of Decision Number 2826 on June 15, 1993, when a copy was sent to his residence while he was on approved sick leave, as shown by a medical certificate and his approved leave applications. His motion for extension filed on July 15, 1993 was therefore filed on the thirtieth day. The Court added that even assuming the period had lapsed, it may allow meritorious cases to proceed, because rules of procedure are mere tools designed to facilitate the attainment of justice.

On the second issue, the Court held that the Commission acted with grave abuse of discretion. On the overpricing items, the disallowances rested on the theory that the supplies could be bought elsewhere at lower prices, yet the Commission refused twice to furnish the re-canvass quotations, supplier names, dates and official forms. Without those documents, the Court said, it baffles the Court how the Commission could have arrived at the conclusion that there were cases of overpricing, and Buscaino was not afforded the opportunity to refute the disallowances item by item. The Court quoted its earlier ruling that mere allegations of overpricing are not, in the absence of the actual canvass sheets and price quotations from identified suppliers, a valid basis for outright disallowance, and held that the failure to furnish the inculpatory records constituted a denial of due process.

On the housing allowance, the Court held that the Board of Trustees resolution authorizing it was a sufficient basis for the disbursement, and that it was beyond Buscaino's competence to pass upon the validity of the resolution, his duty being purely ministerial. On the typewriters, the Court found that the four units were in fact delivered under a separate delivery receipt, evidenced by a gate pass, an inspection report, a memorandum receipt, and a later certification locating two of them. On the emergency purchases, the Court held that the determination of urgency was the prerogative of the University President, and that it was error to place on Buscaino the burden of showing that the purchases were exceptionally urgent.

Doctrine

An accounting officer who signs a disbursement voucher certifies only that the transaction is supported by documents appearing legal and proper; he does not thereby warrant the wisdom of the purchase or the validity of a board resolution, and his duty with respect to such matters is purely ministerial. Mere allegations of overpricing, unaccompanied by the actual canvass sheets or price quotations from identified suppliers, are not a valid basis for outright disallowance of disbursements. The standards of Audit Circular Number 85-55-A must be shown to have been met, and it is incumbent upon the Commission on Audit to prove that its standards were met. The failure to furnish a respondent the inculpatory documents on which a disallowance rests is a denial of due process and a valid defense against the charge. The determination of the necessity of emergency purchases belongs to the head of the agency, not to the certifying accounting officer.

Disposition

The Court granted the petition, set aside the assailed Commission on Audit decision, and exonerated Buscaino from joint and solidary liability for the audit disallowances.

Remember This

The one line to memorize: mere allegations of overpricing, without the actual canvass sheets and price quotations from identified suppliers, cannot support an audit disallowance, and withholding those documents from the respondent is a denial of due process. Examiners use this case to test the limits of a certifying accounting officer's liability and the evidentiary burden that the Commission on Audit itself must discharge.