Department of Science and Technology (DOST) Officials and Personnel vs. Commission on Audit

A decision of the Commission on Audit that has attained finality is immutable and unalterable, and may no longer be modified in any respect even if the modification is meant to correct erroneous conclusions of fact and law. The doctrine of finality of judgment applies not only to decisions of courts but also to decisions of quasi-judicial agencies such as the COA, and only the aggrieved parties named in a notice of disallowance have legal standing to assail it.

The Department of Science and Technology (DOST) is a government agency whose officials and personnel are covered by Republic Act No. 8439, the Magna Carta for Scientists, Engineers, Researchers and other S & T personnel in the Government, enacted on December 22, 1997. Section 7(g) of this law granted S & T personnel monthly longevity pay equivalent to five percent of their monthly basic salary for every five years of continuous and meritorious service, notwithstanding Section 12 of Republic Act No. 6758, the Compensation and Position Classification Act of 1989. The Commission on Audit (COA) is the constitutional body tasked with auditing government expenditures, and its 2009 Revised Rules of Procedure (2009 RRPC) govern the appeal and review of audit disallowances.

On December 22, 1997, Congress enacted Republic Act No. 8439, the Magna Carta for Scientists, Engineers, Researchers and other S & T personnel in the Government. Under Section 7(g) of this law, S & T personnel were granted monthly longevity pay equivalent to five percent of their monthly basic salary for every five years of continuous and meritorious service, as determined by the DOST Secretary, notwithstanding Section 12 of Republic Act No. 6758, the Compensation and Position Classification Act of 1989.

On October 3, 2005, the DOST received Audit Observation Memorandum No. 2005-011(05) from Norberta R. Mateo, who observed that 11 S & T personnel received both step increment and longevity pay. Citing DBM Circular No. 2004-4 dated February 26, 2004 (Guidelines on the Grant of Longevity Pay and Step Increment to Public Health Workers), Mateo opined that S & T personnel had the option to receive either the step increment or longevity pay, but not both. On April 16, 2009, the DOST Accounting Division received ND No. 09-002-101-(05 to 08), which disallowed the step increment differentials for the period January 1, 2005 to December 31, 2008, in the amount of PHP 1,031,928.50, granted to 101 named S & T personnel. The following DOST officers were found liable with the payees by reason of their participation in the disbursements: Bravo, Assistant Secretary for Financial Administration and Legal Affairs, who approved the payment; Fontanilla, Director, ALS, who approved the payment; Adelaida P. Carandang, Chief, Personnel Division, who certified that the payees were entitled to receive the step increment differential; and Gianan and Ceneta, both OIC, Personnel Division.

In a letter dated April 21, 2009, then DOST Secretary Estrella F. Alabastro sought reconsideration of the ND, arguing that RA 8439 governs the longevity pay of S & T personnel, that longevity pay is distinct from step increment under RA 6758, and that DBM Circular No. 2004-04 does not apply to S & T personnel. Notably, not one of the 103 persons held liable under the ND appealed it. When the motion for reconsideration was denied, Sec. Alabastro filed an appeal with the Office of the Director, Cluster B—General Public Services II and Defense National Government Sector. The COA Cluster-B Director upheld the disallowance in Decision No. 2010-003 dated May 17, 2010, holding that DBM Circular Letter No. 2004-4 has in its favor the presumption of validity, and that the issue on the validity of the DBM's interpretations is a question of law not for the COA to decide.

Sec. Alabastro filed a Petition for Review with the COA Proper on July 2, 2010. During its pendency, Sec. Montejo was appointed as the new DOST Secretary. The COA Proper affirmed the disallowance in Decision No. 2014-381 dated December 17, 2014, ruling that: (1) longevity pay and step increment cannot be granted simultaneously as expressly prohibited by Section 13 of RA 8439; (2) RA 6758 mandates compliance with DBM issuances, thus DBM Circular No. 2004-04 must be considered; and (3) DBM Circular No. 2004-04 cannot be disregarded solely because it was signed by the DBM Director, who acted in his official capacity. The DOST received a copy of the assailed Decision on February 17, 2015.

On May 27, 2015—99 days after service—ASec. Santos and Engr. Reyes filed a Motion for Reconsideration on behalf of the regular employees of the DOST. The COA Proper dismissed it in a Resolution dated December 23, 2015, for being filed out of time and for failure to raise any new matter. On April 28, 2016, the Office of the COA Chairperson received a letter from Sec. Montejo seeking relief from the Resolution and the ND, arguing that the Court's decision in Cawad, et al. vs. Sec. Abad, et al. rendered the issuances moot. The COA Proper treated this as a second motion for reconsideration and dismissed it in Resolution No. 2020-036 for lack of jurisdiction and as a prohibited pleading under the 2009 RRPC. Sec. De La Peña was subsequently appointed DOST Secretary and filed the present Petition for Certiorari.

• Procedural Liberality: Sec. De La Peña maintained that the emerging trend of the Court is to afford every litigant the amplest opportunity to properly and justly determine their cause, free from the constraints of technicalities.
• Distinct Nature of Benefits: Sec. De La Peña contended that step increment is inherently different from longevity pay, citing differences in definition, purpose, basis of grant, frequency, and effect on basic salary.
• Statutory Construction: Sec. De La Peña argued that Section 7 of RA 8439 provides that longevity pay shall be granted notwithstanding Section 12 of RA 6758; that DBM Circular No. 2004-04 applies only to public health workers; and that the DOST's contemporaneous construction of the law carries great weight.
• No Violation of Double Benefits Prohibition: Sec. De La Peña contended that the prohibition on double benefits under Section 13 of RA 8439 was not violated by S & T personnel's receipt of both benefits.

• Timeliness: The COA contended that the Petition should be dismissed due to Sec. De La Peña's failure to state the material date of receipt of the assailed Decision, and that the Fresh Period Rule established in Neypes vs. Court of Appeals does not apply to petitions for certiorari under Rule 64 of the Rules of Court.
• Finality of the Assailed Decision: The COA maintained that the Motion for Reconsideration dated May 27, 2015 was belatedly filed and Sec. Montejo's letter was a prohibited motion, so these pleadings did not prevent the assailed Decision from attaining finality.
• No Grave Abuse of Discretion: The COA argued that the Petition failed to establish that the COA acted with grave abuse of discretion, pointing out that the DBM, acting under its authority to implement Presidential Decree No. 985 as amended by RA 6758, issued DBM Circular No. 2004-4 opining that step increment and longevity pay are essentially the same benefits and cannot be granted simultaneously pursuant to Section 13 of RA 8439.

• Timeliness of the Petition: Whether the Petition for Certiorari was timely filed.
• Grave Abuse of Discretion: Whether the COA acted with grave abuse of discretion when it disallowed the step increment differentials due to length of service granted to S & T personnel who also received longevity pay from January 1, 2005 to December 31, 2008.

• Timeliness of the Petition: No. The assailed Decision attained finality on March 19, 2015, five years before the Petition was filed on September 17, 2020. The Motion for Reconsideration filed 99 days after service did not toll the 30-day reglementary period under Rule X, Section 9 of the 2009 RRPC.
• Grave Abuse of Discretion: No. The Court found no practical value in resolving the substantive issue because none of the 103 persons held liable opposed the disallowance, and the DOST—the sole party maintaining the suit—was not adversely affected and had stopped granting step increment due to length of service to S & T personnel who received longevity pay as early as 2013.

• Timeliness of the Petition: Under Rule IV, Section 8 of the 2009 RRPC, the decision of the Auditor becomes final upon the expiration of six months from the date of receipt. In a disallowed payroll with several payees, the six-month period is reckoned from the time the ND was served to the accountant, which constitutes constructive service to all payees listed in the payroll. More than 15 years had passed since the DOST's Accounting Department received the ND on April 16, 2009, and none of the 103 persons held liable appealed. Thus, the ND had long attained finality with respect to them. Under Rule X, Section 9 of the 2009 RRPC, a decision of the COA Proper becomes final and executory after the lapse of 30 days from notice. The assailed Decision was served to the DOST on February 17, 2015, so the period to file a petition before the Court lapsed on March 19, 2015. The Motion for Reconsideration filed on May 27, 2015—99 days after service—did not toll the running of the reglementary period. The doctrine of finality or immutability of judgment provides that when a decision has attained finality, it may no longer be modified in any respect even if the modification is meant to correct erroneous conclusions of fact and law. This doctrine applies not only to decisions of courts but also to decisions of quasi-judicial agencies such as the COA. The established exceptions—correction of clerical errors, nunc pro tunc entries, void judgment, and circumstances transpiring after finality that render execution unjust and inequitable—did not obtain in this case. The immutability attached to the assailed Decision was not affected by the appointment of a new DOST Secretary, as to hold otherwise would bring no end to litigations involving government agencies. Sec. De La Peña's explanation for omitting the date of receipt—that the DOST's copy could not be located—was unacceptable and disingenuous, as the date was clearly stated in the motion for reconsideration attached to the Petition.
• Grave Abuse of Discretion: Sec. De La Peña lacked legal standing to file the Petition. Under Rule V, Section 1 and Rule VII, Section 1 of the 2009 RRPC, only an aggrieved party may appeal decisions of the Auditor and the Director. A liability in a disallowance case is a personal obligation of the persons held liable. The COA ruling on a question of law, even if final, does not create a binding legal precedent that will apply to future cases, as administrative decisions do not enjoy the same level of recognition as judicial decisions. Other S & T personnel, even if similarly situated, are strangers to the case and are not bound by the judgment. Sec. De La Peña was not among the 103 persons held liable; the incumbent DOST Secretary at the time the ND was issued was Sec. Alabastro, so no liability could attach to Sec. De La Peña; and the DOST's interest was not adversely affected by the ND and the assailed Decision. Sec. De La Peña failed to allege, much less demonstrate, that the assailed Decision adversely affects the interest of the DOST. Under Rule XII, Section 1 of the 2009 RRPC, the head of an agency may file a petition only when the decision adversely affects the interest of that agency. Sec. De La Peña provided no proof of authority, such as a special power of attorney, from any of the 103 persons held liable to file the Petition on their behalf. The requisites for a representative suit were not proven: the suit was not brought on behalf of an identified beneficiary whose right was violated, and Sec. De La Peña was not authorized by law or the Rules of Court to represent the beneficiaries. The concern that a head of an agency may have for their subordinates, no matter how laudable, does not clothe them with the authority to fight legal battles on their behalf. The case was also moot, as the DOST, DBM, and COA had already arrived at a consensus more than a decade ago—embodied in Item 13.6 of DOST-DBM Joint Circular No. 1, series of 2013—that S & T personnel cannot simultaneously enjoy both longevity pay and step increment due to length of service.

• Doctrine of Finality or Immutability of Judgment — When a decision has attained finality, it may no longer be modified in any respect even if the modification is meant to correct erroneous conclusions of fact and law. The Court applied this doctrine to hold that the COA Proper's Decision No. 2014-381, having become final on March 19, 2015, could no longer be assailed or modified, even by the COA itself, and even assuming it was erroneous in fact and law.
• Legal Standing / Real Party-in-Interest — Every action shall be prosecuted and defended in the name of the real party-in-interest. In disallowance cases, only the persons held liable in the notice of disallowance are the aggrieved parties with legal standing to assail it. The head of an agency may file a petition for certiorari only when the interest of the agency is adversely affected by the assailed COA issuance.
• Mootness Doctrine — A case or issue is considered moot and academic when it ceases to present a justiciable controversy by virtue of supervening events, so that an adjudication of the case or a declaration on the issue would be of no practical value or use. The Court found no practical value in resolving the substantive issue because none of the liable persons opposed the disallowance and the DOST had stopped granting the disallowed benefits as early as 2013.

• "The doctrine of finality or immutability of judgment provides that when a decision has attained finality, it may no longer be modified in any respect even if the modification is meant to correct erroneous conclusions of fact and law." — This passage states the controlling doctrine that barred the Court from reviewing the COA decision on the merits, as the assailed Decision had become final five years before the Petition was filed.
• "[T]he orderly administration of justice requires that, at the risk of occasional errors, the judgments/resolutions of a court must reach a point of finality set by the law. The noble purpose is to write finis to [a] dispute once and for all. This is a fundamental principle in our justice system, without which there would be no end to litigations." — Quoted from Mocorro, Jr. v. Ramirez, this passage explains the wisdom behind the doctrine of immutability of judgment and was relied upon to justify dismissing the Petition.
• "The concern that a head of an agency may have for their subordinates, no matter how laudable, does not clothe them with the authority to fight legal battles on their behalf." — This passage articulates the Court's holding that the DOST Secretary lacked legal standing to assail the disallowance on behalf of the 103 persons held liable, as he was not the real party-in-interest.

• Cawad, et al. vs. Sec. Abad, et al., 764 Phil. 705 (2015) — Cited by Sec. Montejo in his letter to the COA Chairperson as rendering the disallowance moot; the Court in that case declared a DBM-DOH Joint Circular unenforceable for failure to file it with the University of the Philippines Law Center-Office of the National Administrative Register.
• Mocorro, Jr. vs. Ramirez, 582 Phil. 357 (2008) — Quoted for the doctrine of immutability of judgment and the wisdom behind the finality of judgments, which the Court applied to dismiss the Petition.
• Bangko Sentral ng Pilipinas vs. Commission on Audit, 913 Phil. 99 (2021) — Cited for the propositions that the doctrine of finality applies to decisions of quasi-judicial agencies and that administrative decisions do not enjoy the same level of recognition as judicial decisions applying or interpreting the laws or the Constitution.
• Fortune Life Insurance Company, Inc. vs. COA Proper, 752 Phil. 97 (2015) — Cited by the COA for the proposition that the Fresh Period Rule established in Neypes vs. Court of Appeals does not apply to petitions for certiorari under Rule 64 of the Rules of Court.
• Neypes vs. Court of Appeals, 506 Phil. 613 (2005) — Cited by the COA in arguing that the Fresh Period Rule does not apply to Rule 64 petitions.
• Aquino vs. Commission on Audit, 888 Phil. 643 (2020) — Cited for the requisites of a representative suit and for the proposition that the absence of authority on the part of DOST officials to act on behalf of the liable persons cleared the way for the ND to attain finality.
• White Light Corp. vs. City of Manila, 596 Phil. 444 (2009) — Cited for the requisites for allowing a party to bring a suit on behalf of a third party: injury-in-fact, close relation to the third party, and the third party's hindrance in protecting their own interest.

• Section 7(g), Republic Act No. 8439 — Granted S & T personnel monthly longevity pay equivalent to five percent of their monthly basic salary for every five years of continuous and meritorious service, notwithstanding Section 12 of RA 6758.
• Section 13, Republic Act No. 8439 — The provision against double benefits, which provides that S & T personnel already receiving the same benefits under any other law shall not be allowed to avail of the benefits under the Act unless they submit in writing their intention to withdraw the benefits already being received and opt for those provided thereunder. The COA Proper relied on this provision to uphold the disallowance.
• Section 12, Republic Act No. 6758 — The consolidation of allowances and compensation provision, which the DOST invoked as the provision that longevity pay was granted notwithstanding.
• Rule IV, Section 8, 2009 RRPC — Provides that the decision of the Auditor shall become final upon the expiration of six months from the date of receipt thereof, unless an appeal to the Director is taken. The Court applied this to hold that the ND had long attained finality with respect to the 103 persons held liable.
• Rule X, Sections 9, 10, 12, and 13, 2009 RRPC — Govern the finality of decisions or resolutions of the COA Proper (30 days from notice), motions for reconsideration (only one, filed within 30 days), the effect of a motion for reconsideration, and entry of decision. The Court applied these to hold that the assailed Decision became final on March 19, 2015.
• Rule XII, Section 1, 2009 RRPC — Provides that any decision, order, or resolution of the Commission may be brought to the Supreme Court on certiorari by the aggrieved party within 30 days from receipt, and that when the decision adversely affects the interest of any government agency, the appeal may be taken by the proper head of that agency.
• Rule 3, Section 2, Rules of Court — Provides that every action shall be prosecuted and defended in the name of the real party-in-interest.
• Rule 3, Section 3, Rules of Court — Governs representatives as parties, requiring that the beneficiary be included in the title of the case and deemed the real party in interest.
• Rule 64, Section 5, Rules of Court — Requires that the petition name the aggrieved party as petitioner.
• Rule 65, Section 1, Rules of Court — Provides that a person aggrieved by a tribunal's act without or in excess of jurisdiction, or with grave abuse of discretion, may file a verified petition for certiorari.
• Item 13.6, DOST-DBM Joint Circular No. 1, series of 2013 — Provides that an S & T personnel previously granted Step Increment Due to Length of Service shall no longer be granted subsequent Step Increment Due to Length of Service, and that S & T personnel hired on or after the effectivity of the Joint Circular shall not be granted Step Increment Due to Length of Service. The Court cited this to show that the DOST, DBM, and COA had already reached a consensus that the two benefits cannot be simultaneously enjoyed.

Gesmundo, C.J., Leonen, SAJ., Caguioa, Hernando, Lazaro-Javier, Zalameda, M. Lopez, Gaerlan, Rosario, J. Lopez, Dimaampao, Marquez, and Kho, Jr., JJ., concurred. Singh, J., was on leave.