ROSALINDA DIMAPILIS-BALDOZ, IN HER CAPACITY AS THEN ADMINISTRATOR OF THE PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION (POEA), PETITIONER, VS. COMMISSION ON AUDIT, REPRESENTED B…

Dimapilis-Baldoz versus Commission on Audit

The Case

This is a petition for certiorari filed by Rosalinda Dimapilis-Baldoz, in her capacity as then Administrator of the Philippine Overseas Employment Administration, against the Commission on Audit. The Administrator asks the Supreme Court to annul the Commission's decision affirming a notice of disallowance that held her personally liable to refund the government the salaries and benefits paid to a subordinate official who had been dismissed from the service. The case matters because it fixes two things every bar candidate must know: the reckoning point of a disallowance when a public officer has been validly dismissed, and the good faith presumption that shields a public officer from personal liability for disbursements she approved without knowledge of their impropriety.

Procedural History

The case began before the Commission on Audit. A State Auditor issued an audit observation memorandum on the salaries and benefits paid to Leonel Labrador from August 1999 to March 2004. On the strength of that memorandum, the Commission issued a Notice of Disallowance on January 18, 2006, holding the Administrator, among other POEA personnel, personally liable for one million seven hundred forty thousand one hundred twenty-four pesos and eight centavos. The Administrator sought reconsideration by letter dated March 3, 2006. On October 29, 2009, the Commission issued its decision affirming the notice of disallowance. The POEA then moved for reconsideration, but the Commission refused to entertain it, invoking a notice of finality stating that its decision had already become final and executory. A second plea to resolve the motion on the merits went unanswered. The Administrator then filed this petition for certiorari before the Supreme Court, which is an original action invoking the Court's certiorari jurisdiction over the Commission on Audit.

Facts

Leonel Labrador was the Chief of the Employment Services Regulation Division of the POEA. On May 2, 1997, then Labor Secretary Leonardo Quisumbing ordered his dismissal from the service after finding that he had bribed an overseas Filipino worker in the amount of six thousand two hundred pesos to expedite the issuance of her overseas employment certificate. The Civil Service Commission affirmed the dismissal on appeal in March 2003 and denied reconsideration in May 2004.

Separately, a criminal case for direct bribery was filed against Labrador. On August 31, 1999, the Sandiganbayan convicted him and sentenced him to an indeterminate penalty, a fine of three thousand pesos, temporary special disqualification from public office, and costs. The Supreme Court affirmed the conviction in January 2000 and denied reconsideration with finality in March 2000. Labrador then applied for probation, and the Sandiganbayan granted it in September 2001. At the end of the probation period, however, the Sandiganbayan issued a resolution on March 2, 2004 declaring that the probation had been erroneously granted and directing that copies of the resolution be furnished to the POEA Administrator and the Civil Service Commission.

The Administrator received the resolution on March 9, 2004 and immediately issued a Notice and Order of Separation dated March 11, 2004, dropping Labrador from the rolls effective that day. Despite this, the Commission on Audit disallowed the salaries and benefits Labrador had received from August 1999 to March 2004, reckoning the disallowance from May 3, 2000, the date the conviction became final, and holding the Administrator personally liable for the refund.

Issues

• Whether or not grave abuse of discretion attended the Commission on Audit's disallowance, particularly in fixing the reckoning point of the period of disallowance.
• Whether or not grave abuse of discretion attended the Commission's imposition of personal liability upon the Administrator for the amounts disallowed.

Applicable Provisions

Section 2 of Article Nine-D of the 1987 Constitution provides:

Section 2. The Commission on Audit shall have the power, authority, and duty to examine, audit, and settle all accounts pertaining to the revenue and receipts of, and expenditures or uses of funds and property, owned or held in trust by, or pertaining to the Government, or any of its subdivisions, agencies, or instrumentalities, including government-owned or controlled corporations with original charters, and on a post-audit basis.

This is the constitutional source of the Commission's authority to disallow illegal disbursements, which the Court affirms.

Section 11, Chapter 4, Subtitle B, Title I, Book V of the Administrative Code of 1987 provides:

Section 11. General Jurisdiction. The Commission on Audit shall have the power, authority, and duty to examine, audit, and settle all accounts pertaining to the revenue and receipts of, and expenditures or uses of funds and property, owned or held in trust by, or pertaining to the Government, or any of its subdivisions, agencies, or instrumentalities, including government-owned or controlled corporations with original charters, and on a post-audit basis.

This echoes the constitutional mandate and confirms the Commission's general audit power.

Section 47, paragraph 2, Chapter 6, Subtitle A, Title I, Book V of the Administrative Code, as amended, provides:

The Secretaries and heads of agencies and instrumentalities, provinces, cities and municipalities shall have jurisdiction to investigate and decide matters involving disciplinary action against officers and employees under their jurisdiction. Their decisions shall be final in case the penalty imposed is suspension for not more than thirty days or fine in an amount not exceeding thirty days' salary. In case the decision rendered by a bureau or office head is appealable to the Commission, the same may be initially appealed to the department and finally to the Commission and pending appeal, the same shall be executory except when the penalty is removal, in which case the same shall be executory only after confirmation by the Secretary concerned.

This provision makes the Labor Secretary's order of dismissal immediately executory, which is the key to the correct reckoning point of the disallowance.

Ruling

On the first issue, the Court held that the Commission did not commit grave abuse of discretion in fixing the reckoning point at May 3, 2000, because the records showed no knowledge on its part of Labrador's earlier dismissal on May 2, 1997. Grave abuse of discretion must be so patent or gross as to constitute an evasion of a positive duty. Nonetheless, the Court held that the disallowance should be reckoned not from May 3, 2000 but from May 2, 1997, the date Labrador was dismissed from the service. Under Section 47, paragraph 2, the Secretary's decision removing an officer is immediately executory, and Labrador should not have been allowed to report for work or receive any salary from that date. The Court also held that the grant and revocation of probation were irrelevant, because probation does not obliterate the crime for which the person was convicted. The Court reminded the Commission to correct its issuances to reflect the actual date of dismissal, since public funds are the property of the people and must be used prudently.

On the second issue, the Court held that the Administrator could not be held personally liable. Every public official is presumed to have acted in good faith, and he who alleges the contrary bears the burden of proving malice or bad faith. The Court found that the Administrator had no knowledge or reasonable indication that the payments were improper: Labrador's personnel file contained no record of the criminal case, and she learned of the conviction only when furnished the Sandiganbayan's March 2, 2004 resolution. She lost no time in issuing the separation order. Her approval of the disbursements was spurred only by the honest belief that the salaries were due and owing.

Doctrine

A department secretary's decision removing an officer is immediately executory under Section 47, paragraph 2 of the Administrative Code, and the officer is disqualified from receiving any salary or benefit from the date of that decision. The reckoning point of a disallowance of salaries paid to a dismissed officer is therefore the date of dismissal, not the date the criminal conviction became final. Probation does not obliterate the crime of conviction and cannot justify retention in the government service. Finally, a public officer is presumed to have acted in good faith, and personal liability for a disallowed disbursement cannot be imposed absent proof of malice or bad faith, especially where the officer had no knowledge of the facts making the payment improper.

Disposition

The petition was partly granted. The Court upheld the disallowance but set the reckoning point at May 2, 1997, and absolved the Administrator from personal liability for the refund.

Remember This

Memorize this line: the reckoning point of a disallowance for a dismissed public officer is the date of dismissal, and good faith shields the approving officer from personal liability. Examiners use this case to test the immediately executory nature of a department secretary's removal order and the presumption of good faith in the discharge of official duties.