FRANCISCO S. TANTUICO, JR., PETITIONER, VS. HON. EUFEMIO DOMINGO, IN HIS CAPACITY AS CHAIRMAN OF THE COMMISSION ON AUDIT, ESTELITO SALVADOR, MARGARITO SILOT, VALENTINA EUSTAQUIO…

This is a petition for certiorari, prohibition and mandamus,
with prayer for temporary restraining order or preliminary injunction, under
Rule 65 of the Revised Rules of Court.

The petition mainly questions the withholding of one-half of
petitioner’s retirement benefits.

I

On January 26, 1980, petitioner was appointed Chairman of the
Commission on Audit (COA) to serve a term of seven years expiring on January
26, 1987. Petitioner had discharged the
functions of Chairman of the COA in an acting capacity since 1975.

On December 31, 1985, petitioner applied for clearance from all
money, property and other accountabilities in preparation for his
retirement. He obtained the clearance
applied for, which covered the period from 1976 to December 31, 1985. The clearance had all the required
signatures and bore a certification that petitioner was “cleared from
money, property and/or other accountabilities by this Commission” (Rollo,
p. 44).

After the EDSA Revolution, petitioner submitted his courtesy
resignation to President Corazon C. Aquino. He relinquished his office to the newly appointed Chairman, now
Executive Secretary Teofisto Guingona, Jr. on March 10, 1986. That same day, he applied for retirement
effective immediately.

Petitioner sought a second clearance to cover the period from
January 1, 1986 to March 9, 1986. All
the signatures necessary to complete the second clearance, except that of
Chairman Guingona, were obtained. The
second clearance embodies a certificate that petitioner was “cleared from
money, property and/or accountability by this Commission” (Rollo, p. 49). Chairman Guingona, however, failed to take any action thereon.

Chairman Guingona was replaced by respondent Chairman. A year later, respondent Chairman issued COA
Office Order No. 87-10182 (Rollo, p. 50), which created a committee to
inventory all equipment acquired during the tenure of his two predecessors.

On May 7, 1987, respondent Chairman indorsed petitioner’s
retirement application to the Government Service Insurance System (GSIS),
certifying, among other matters, that petitioner was cleared of money and
property accountability (Rollo, p. 52). The application was returned to the COA pursuant to R.A. No. 1568, which
vests in the COA the final approval thereof.

On September 25, 1987, the inventory committee finally submitted
its report, recommending petitioner’s clearance from property accountability
inasmuch as there was no showing that he personally gained from the missing
property or was primarily liable for the loss thereof (Rollo, pp. 53­-58).

Not satisfied with the report, respondent Chairman issued a
Memorandum directing the inventory committee to explain why no action should be
filed against its members for failure to complete a physical inventory and
verification of all equipment; for exceeding their authority in recommending
clearances for petitioner and Chairman Guingona; and for recommending
petitioner’s clearance in total disregard of Section 102 of P.D. No. 1445
(Government Auditing Code of the Philippines). The members of the committee were subsequently administratively charged.

On January 2, 1988, respondent Chairman created a special audit
team for the purpose of conducting a financial and compliance audit of the COA
transactions and accounts during the tenure of petitioner from 1976 to 1984
(COA Office Order 88-10677; Rollo, pp. 66-67).

On February 28, 1989, the special audit team submitted its report
stating: (i) that the audit consisted
of selective review of post-audit transactions in the head offices and the
State Accounting and Auditing Center; (ii) that the audit disclosed a number of
deficiencies which adversely affected the financial condition and operation of
the COA, such as violations of executive orders, presidential decrees and
related rules and regulations; and (iii) that there were some constraints in
the audit, such as the unavailability of records and documents, and personnel
movements and turnover. While the
report did not make any recommendation, it instead mentioned several officials
and employees, including petitioner, who may be responsible or accountable for
the questioned transactions (Rollo, pp. 73, 147-151).

Respondent Chairman rendered a Decision dated November 20, 1989,
in the administrative case filed against the principal members of the first
inventory committee. He found them guilty as charged and issued them
a reprimand. The other members were
meted a stern warning, except for one who was exonerated for not taking part in
the preparation of the inventory report.

In a letter dated December 21, 1989, a copy of which was received
by petitioner on December 27, 1989, respondent Chairman informed petitioner of
the approval of his application for retirement under R.A. No. 1568, effective
as of March 9, 1986 (Rollo, pp. 68-69). However, respondent Chairman added:

“xxx In view, however, of the audit findings and inventory
report adverted to above, payment of only one-half (1/2) of the money value of
the benefits due you by reason of such retirement will be allowed, subject to
the availability of funds and the usual accounting and auditing rules. Payment of the balance of said retirement
benefits shall be subject to the final results of the audit concerning your
fiscal responsibility and/or accountability as former Chairman of this
Commission.”

In a letter dated January 22, 1990, petitioner requested full
payment of his retirement benefits.

Petitioner was furnished a copy of the report of the special
audit team in the letter dated December 21, 1989 of respondent Chairman on
January 29, 1990, nearly a year after its completion. Attached to a copy of the report was a letter dated November 14,
1989 from respondent Chairman, who required petitioner to submit his comment
within 30 days (Rollo, p. 153).

Petitioner submitted
a letter-comment, wherein he cited certain defects in the manner the audit was
conducted. He further claimed that the
re-audit was not authorized by law since it covered closed and settled
accounts.

Upon petitioner’s request, he was furnished a set of documents
which he needed to prepare his comment. He was likewise given another 30-days to submit it.

A series of correspondence between petitioner and respondent
Chairman ensued. On September 10, 1990,
petitioner requested a copy of the working papers on which the audit report was
based. This was denied by respondent
Chairman, who claimed that under the State Audit Manual, access to the working
paper was restricted. Petitioner’s
reconsideration was likewise denied and he was given a non-extendible period of
five days to submit his comment.

Instead of submitting his comment, petitioner sought several
clarifications and specifications, and requested for 90 days within which to
submit his comment, considering that the report covered a ten-year period of
post-audited transactions. Ignoring petitioner’s
request, respondent Chairman demanded an accounting of funds and a turn over of
the assets of the Fiscal Administration Foundation, Inc. within 30 days.

II

Petitioner then filed the instant petition. As prayed for by petitioner, this Court issued
a temporary restraining order on January 17, 1991.

Petitioner argues that notwithstanding the two clearances
previously issued, and respondent Chairman’s certification that petitioner had
been cleared of money and property accountability, respondent Chairman still
refuses to release the remaining half of his retirement benefits – a purely
ministerial act.

Petitioner was already issued an initial clearance during his
tenure, effective December 31, 1985 (Rollo, p. 44). All the required signatures were present. It also bore a certification that petitioner
“is cleared from money, property and/or other accountabilities by this
commission” with the following notation:

“No property accountability under the Chairman’s name as the
person. Final clearance as COA Chairman
subject to the completion of ongoing reconciliation of Accounting &
P(roperty) records and to complete turnover of COA property assigned to him as
agency head.

xxx

The responsibility of the Chairman for the disbursement and
collection accounts of this Commission for CYs Sept. ‘75 to Aug. ‘85, were
completely post-audited, however as of Dec. 31, 1985, the suspensions and
disallowances in the amounts of P36,196,962.11 and P28,762.36 respectively, are
still in the process of settlement” (Rollo, pp. 44 – 45).

Petitioner also applied for a second clearance to cover the
period from January 1 to March 9, 1986, which application had been signed by
all the officials, except the Chairman
(Rollo, p. 49).

Whatever infirmities or limitations existed in said clearances
were cured after respondent Chairman favorably indorsed petitioner’s
application for retirement to the Government Service Insurance System and
recommended its approval to take effect on March 10, 1986. In said endorsement, respondent Chairman made
it clear that there were no pending administrative and criminal cases against
petitioner (Rollo, p. 52).

Regardless of petitioner’s monetary liability to the government
that may be discovered from the audit concerning his fiscal responsibility or
accountability as former COA Chairman, respondent Chairman cannot withhold the
benefits due petitioner under the retirement laws.

In Romana Cruz v. Hon. Francisco
Tantuico, 166 SCRA 670 (1988), the National Treasurer withheld the
retirement benefits of an employee because of his finding that she negligently
allowed the anomalous encashment of falsified treasury warrants.

In said case, where petitioner herein was one of the respondents,
we found that the employee had been cleared by the National Treasurer from all
money and property responsibility, and held that the retirement pay accruing to
a public officer may not be withheld and applied to his indebtedness to the
government.

In Tantuico, we cited Justice Laurel’s essay on the rationale
for the benign ruling in favor of the retired employees, thus:

“xxx Pension in this case is a bounty flowing from the
graciousness of the Government intended to reward past services and, at the
same time, to provide the pensioner with the means with which to support
himself and his family. Unless
otherwise clearly provided, the pension should inure wholly to the benefit of
the pensioner. It is true that the
withholding and application of the amount involved was had under Section 624 of
the Administrative Code and not by any judicial process, but if the gratuity
could not attached or levied upon execution in view of the prohibition of
Section 3 of Act No. 4051, the appropriation thereof by administrative action,
if allowed, would lead to the same prohibited result and enable the respondent
to do indirectly what they can not do directly under Section 3 of the Act No.
4051. Act No. 4051 is a later statute
having been approved on February 21, 1933, whereas the Administrative Code of
1917 which embodies Section 624 relied upon by the respondents was approved on
March 10 of that year. Considering
Section 3 of Act No. 4051 as an exception to the general authority granted in
Section 624 of the Administrative Code, antagonism between the two provisions
is avoided (Hunt v. Hernandez, 64 Phil. 753 [1937]).

Under Section 4 of R.A. No. 1568 (An Act to Provide Life Pension
to the Auditor General and the Chairman or Any Member of the Commission on
Elections), the benefits granted by said law to the Auditor General and the
Chairman and Members of the Commission on Elections shall not be subject to
garnishment, levy or execution. Likewise, under Section 33 of P.D. No. 1146, as amended (The Revised
Government Service Insurance Act of 1977), the benefits granted thereunder
“shall not be subject, among others, to attachment, garnishment, levy or
other processes.”

Well-settled is the rule that retirement laws are liberally
interpreted in favor of the retiree because the intention is to provide for the
retiree’s sustenance and comfort, when
he is no longer capable of earning his livelihood (Profeta vs. Drilon, 216 SCRA
777 [1992]).

Petitioner also wants us
to enjoin the re-audit of his fiscal responsibility or accountability, invoking
the following grounds:

1.     
The re-audit involved settled and closed accounts which under
Section 52 of the Audit Code can no longer be re-opened and reviewed.

2.     
The re-audit was initiated by respondent Chairman alone, and
not by the Commission as a collegial body;

3.     
The report of the special audit team that recommended the
re-audit is faulty as the team members themselves admitted several constraints
in conducting the re-audit, e.g. unavailability of the documents, frequent
turn-over and movement of personnel, etc.;

4.     
The re-audit covered transactions done even after petitioner’s
retirement;

5.     
He was not given prior notice of the re-audit;

6.     
He was not given access to the working papers; and

7.     
Respondents were barred by res judicata from
proceeding with the re-audit (Rollo, pp. 19­-40).

The petition must fail insofar as it seeks to abort the
completion of the re-audit. While at
the beginning petitioner raised objections to the manner the audit was
conducted and the authority of respondents to re-open the same, he subsequently
cooperated with the examination of his accounts and transactions as a COA
official.

With respect to the legal
objections raised by petitioner to the partial findings of the respondents with
respect to his accountability, such findings are still tentative. As petitioner has requested, he is entitled
to a reasonable time within which to submit his comment thereon.

But in order to prepare his comment, petitioner should be given
access to the working papers used by the special audit team. The audit report covered a period of ten
years (1976-1985) and involved numerous transactions. It would be unfair to expect petitioner to comment on the COA’s
findings of the report without giving him a chance to verify how those findings
were arrived at.

It has been seven years since petitioner’s retirement. Since then he was only paid half of his
retirement benefits, with the other half being withheld despite the issuance of
two clearances and the approval of his retirement application. As of the filing of this petition on
December 21, 1990, no criminal or administrative charge had been filed against
petitioner in connection with his position as former Acting Chairman and
Chairman of the COA.

WHEREFORE, the petition is GRANTED insofar as it seeks to
compel respondent Chairman of the COA to pay petitioner’s retirement benefits
in full and his monthly pensions beginning in March 1991.

The petition is DENIED insofar as it seeks to nullify COA Office
Order No. 88-10677 and the audit report dated February 28, 1989 but petitioner
should be given full access to the working papers to enable him to prepare his
comment to any adverse findings in said report. The temporary restraining order is LIFTED.

SO ORDERED.

Narvasa, C.J., Cruz, Feliciano, Padilla, Bidin, Regalado,
Davide, Jr., Romero, Nocon, Bellosillo, Melo, Puno, Vitug, and Kapunan, JJ., concur.