Leynes vs. COA

Local government units may grant additional allowances to judges and other national government officials stationed in their locality provided their finances allow, and an administrative circular cannot restrict this statutory power by prohibiting the grant of allowances similar to those provided by the national government.

Judge Tomas C. Leynes, presiding judge of the Municipal Trial Court of Naujan, Oriental Mindoro, received his salary and representation and transportation allowance (RATA) from the Supreme Court, along with a ₱944 monthly allowance from the municipality's local funds starting in 1984. In May 1993, the Sangguniang Bayan of Naujan unanimously approved Resolution No. 101, increasing the judge's monthly allowance to ₱1,600. The corresponding supplemental budget and the 1994 annual budget providing for the allowance were approved by the Municipal Mayor, the Sangguniang Bayan, the Sangguniang Panlalawigan, and the Office of Provincial Budget and Management of Oriental Mindoro.

• Initial Allowance: Petitioner Judge Leynes drew his salary and RATA from the Supreme Court while receiving a ₱944 monthly allowance from the local funds of the Municipality of Naujan starting 1984.
• Increase in Allowance: The Sangguniang Bayan enacted Resolution No. 101 on May 7, 1993, increasing the monthly allowance to ₱1,600. The corresponding supplemental budget and the 1994 annual budget were approved by the Municipal Mayor, Sangguniang Bayan, Sangguniang Panlalawigan, and the Office of Provincial Budget and Management.
• Disallowance: Provincial Auditor Salvacion M. Dalisay directed the municipality to stop payment and demand a refund, citing Section 36 of RA 7645 and National Compensation Circular No. 67, which prohibit collecting RATA from more than one source.
• COA Appeal: Regional Director Gregoria S. Ong affirmed the disallowance, adding that Resolution No. 101 failed to comply with Section 3(e) of Local Budget Circular No. 53, which prohibits LGUs from granting allowances similar to those granted by the national government. The Commission on Audit affirmed the Regional Director, declaring Resolution No. 101 null and void. The allowance was paid only from May 1993 to January 1994.

• Statutory Authority: Petitioner argued that Section 447(a)(1)(xi) of the Local Government Code expressly and unequivocally empowers municipalities to grant allowances to judges, subject only to the condition that their finances allow.
• Invalid Restriction by Circular: Petitioner maintained that the DBM cannot amend or modify a substantive law like the Local Government Code through mere budget circulars, as circulars must conform to, not amend, the law they seek to implement.

• Prohibition on Dual RATA: Respondent countered that National Compensation Circular No. 67 prohibits collecting RATA from more than one source, and RA 7645 provides that RATA is payable from the parent agency's appropriations.
• LBC No. 53 Condition: Respondent argued that Section 3(e) of Local Budget Circular No. 53 prohibits LGUs from granting allowances to national officials when similar allowances are already granted by the national government.

• Validity of Resolution: Whether Resolution No. 101 granting the additional allowance is valid.
• Statutory Authority vs. Administrative Circular: Whether the DBM can restrict the LGU's statutory power to grant allowances through budget circulars.
• Implied Repeal: Whether Section 447(a)(1)(xi) of the Local Government Code was impliedly repealed or modified by RA 7645 and the General Appropriations Act of 1993.
• Entitlement to Allowance: Whether petitioner was entitled to receive the additional allowance.

• Validity of Resolution: Resolution No. 101 was valid. The Sangguniang Panlalawigan's approval of the resolution and the corresponding budget raises a presumption of regularity and compliance with Sections 324 and 325 of the Local Government Code. The COA failed to discharge its burden of proving non-compliance.
• Statutory Authority vs. Administrative Circular: The DBM cannot restrict the LGU's statutory power. An administrative circular cannot supersede, abrogate, modify, or nullify a statute. Section 3(e) of Local Budget Circular No. 53 was declared null and void for violating Section 447(a)(1)(xi) of the Local Government Code and the constitutionally mandated policy of local autonomy.
• Implied Repeal: Section 447(a)(1)(xi) of the Local Government Code was not impliedly repealed by RA 7645. Repeal by implication is not favored. Applying the principle of generalia specialibus non derogant, the Local Government Code is a special law on LGUs, while the GAA is a general law; a general law does not nullify a special law. Furthermore, the prohibition in NCC No. 67 against collecting RATA from "more than one source" applies only to multiple national agencies, not to LGUs.
• Entitlement to Allowance: Petitioner was entitled to the allowance, the grant being in accordance with the Local Government Code and local autonomy.

• Generalia specialibus non derogant — A general law does not nullify a specific or special law. The legislature, in passing a special law, makes special provisions for particular circumstances; a subsequent general law without express intent cannot amend or repeal the special law. Applied to hold that the General Appropriations Act (general) did not impliedly repeal the Local Government Code (special).
• Administrative Circulars vs. Statutes — An administrative circular cannot supersede, abrogate, modify, or nullify a statute. It must conform to the law it seeks to implement. Applied to invalidate Section 3(e) of Local Budget Circular No. 53.
• Presumption of Validity of Ordinances — An ordinance is presumed valid in the absence of evidence showing it is not in accordance with law. The Sangguniang Panlalawigan's approval of a municipal budget creates a presumption of regularity and compliance with statutory budgetary requirements.

• "It is elementary in statutory construction that an administrative circular cannot supersede, abrogate, modify or nullify a statute. A statute is superior to an administrative circular, thus the latter cannot repeal or amend it."
• "By prohibiting LGUs from granting allowances similar to the allowances granted by the national government, Section 3 (e) of LBC No. 53 practically prohibits LGUs from granting allowances to judges and, in effect, totally nullifies their statutory power to do so."

• Dadole, et al. vs. COA, G.R. No. 125350 (December 3, 2002) — Followed. Struck down Local Budget Circular No. 55 setting maximum allowance amounts, upholding LGU autonomy to grant allowances in any amount depending on fund availability.
• Allarde vs. Commission on Audit, 218 SCRA 227 (1993) — Followed. Cited regarding Letter of Instruction No. 1418, noting that the word "may" signifies the allowance cannot be demanded as a right but depends on the municipality's will.
• China Banking Corporation vs. Court of Appeals, 265 SCRA 327 (1996) — Followed. Cited for the doctrine that an administrative circular cannot repeal a statute.
• Villegas vs. Subido, 41 SCRA 190 (1971) — Followed. Cited for the definition of general vs. special laws and the principle that a general law cannot impliedly repeal a special law.

• Section 447(a)(1)(xi), RA 7160 (Local Government Code of 1991) — Empowers the Sangguniang Bayan to provide additional allowances to judges and other national officials when municipal finances allow. Held not to have been impliedly repealed by the GAA and must be upheld.
• Section 36, RA 7645 (General Appropriations Act of 1993) — Provides rates of RATA for national officials payable from their parent agencies' appropriations. Construed as a general law that did not impliedly repeal the Local Government Code.
• Section 3(e), Local Budget Circular No. 53 — Prohibited LGUs from granting allowances similar to those granted by the national government. Declared null and void for violating the Local Government Code and local autonomy.
• National Compensation Circular No. 67 — Prohibited collecting RATA from more than one source. Construed to apply only to national agencies, not LGUs.

Davide, Jr., C.J., Puno, Vitug, Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio, Austria-Martinez, Carpio-Morales, Callejo, Sr., Azcuna, and Tinga, JJ.