Melloria vs. Jimenez

Certifying officers who perform purely ministerial duties unrelated to the legality or illegality of a disbursement may be excused from solidary liability to return disallowed amounts if they acted in good faith.

The Municipality of Laak, Compostela Valley, allocated PHP 18,093,705.00 for its 2011 peace and order programs. The Mayor drew cash advances totaling PHP 4,100,000.00 for intelligence and confidential activities. The COA's Intelligence/Confidential Funds Audit Unit (ICFAU) flagged this as exceeding the limit set by DILG Memorandum Circular No. 99-65, which caps such funds at 30% of the total annual amount allocated for peace and order efforts or 3% of the total annual appropriations, whichever is lower. The ICFAU determined that only PHP 5,000,000.00 of the peace and order budget qualified as such, after deducting allocations for human rights advocacy and community development and monitoring programs, which it deemed outside the scope of peace and order programs defined in the circular. Consequently, the maximum allowable intelligence/confidential fund was PHP 1,500,000.00, leading to a disallowance of PHP 2,600,000.00.

• Nature of the Disbursement: The Municipality of Laak's 2011 annual budget appropriated PHP 18,093,705.00 for peace and order programs. Mayor Reynaldo B. Navarro obtained cash advances totaling PHP 4,100,000.00 for intelligence and confidential activities.
• Audit Findings: The COA-ICFAU applied Item II.2 of DILG MC No. 99-65, which limits intelligence/confidential funds to 30% of the peace and order budget or 3% of total appropriations, whichever is lower. It computed the peace and order budget by deducting PHP 13,093,705.00 allocated for human rights advocacy and community development and monitoring programs, reasoning these did not fall under the definition of peace and order programs in Item II.4 of the circular. This left a peace and order budget of PHP 5,000,000.00, making the maximum intelligence/confidential fund PHP 1,500,000.00.
• Disallowed Amount: The excess disbursement of PHP 2,600,000.00 was disallowed. The COA held the Mayor, Municipal Budget Officer, Municipal Accountant (Raquel C. Melloria), and Municipal Treasurer (Eduarda A. Casador) solidarily liable.
• Petitioners' Role: Melloria, as Municipal Accountant, certified that the allotment was obligated for the purpose. Casador, as Municipal Treasurer, certified the availability of funds. Their participation was limited to these certifications.

• Scope of Peace and Order Programs: Petitioners argued that the funds for human rights advocacy and community development and monitoring programs should be included in the peace and order budget. They invoked the doctrine of ejusdem generis, contending that the phrase "shall include, but not limited to" in Item II.4 of DILG MC No. 99-65 allows for analogous programs beyond the specific enumeration.
• Estoppel: Petitioners maintained that the COA was estopped from issuing the disallowance because it had previously issued credit notices for the municipality's 2010 and 2012 intelligence/confidential funds, which included similar items.

• Strict Construction of the Circular: The COA and the Office of the Solicitor General countered that the items under human rights advocacy and community development were not akin to the specific peace and order programs enumerated in Item II.4 of DILG MC No. 99-65 (e.g., purchase of firearms, allowances for PNP/BFP/BJMP personnel). Therefore, they were correctly excluded from the peace and order budget base.
• No Estoppel: Respondent argued that the COA is not estopped by prior credit notices, as each audit year is evaluated independently.

• Validity of the Disallowance: Whether the COA gravely abused its discretion in affirming the disallowance of PHP 2,600,000.00, finding that the municipality exceeded the intelligence/confidential fund limit under DILG MC No. 99-65.
• Liability of Certifying Officers: Whether petitioners Melloria and Casador are solidarily liable to return the disallowed amount.

• Validity of the Disallowance: The COA did not gravely abuse its discretion. The disallowance was proper because the municipality's intelligence/confidential fund disbursements exceeded the 30% cap relative to its qualified peace and order budget. Applying the doctrine of ejusdem generis, the items for human rights advocacy and community development were not of the same kind as the peace and order programs specifically enumerated in Item II.4 of DILG MC No. 99-65, which focus on direct support to uniformed personnel (PNP, BFP, BJMP) and their operational needs.
• Liability of Certifying Officers: Petitioners are excused from solidary liability. Their functions as certifying officers (attesting to the obligation of allotments and availability of funds) were purely ministerial, not involving discretion over the legality of the disbursement. Jurisprudence holds that officers performing such ministerial duties in good faith are not civilly liable for disallowed amounts under Section 38 of the Administrative Code of 1987 and Rule 2(a) of the Madera rules on return.

• Ejusdem Generis — Where a statute or regulation describes things of a particular class or kind accompanied by words of a generic character, the generic words are limited to things of a kindred nature with those particularly enumerated. The Court applied this to hold that the general phrase "shall include, but not limited to" in DILG MC No. 99-65 does not expand the scope of peace and order programs to include unrelated items like human rights advocacy and community development.
• Good Faith Exception for Ministerial Certifying Officers — Approving and certifying officers who act in good faith, in the regular performance of official functions, and with the diligence of a good father of a family are not civilly liable to return disallowed amounts. Good faith is presumed for public officers performing ministerial duties—those requiring no exercise of discretion—such as certifying the availability of funds or completeness of documents.

• "Certifying officers who were merely performing ministerial duties not related to the legality or illegality of the disbursement may be excused from the liability to return the disallowed amounts on account of good faith." — This encapsulates the core ruling on the excusal of liability.
• "Being mere certifying officers, petitioners do not appear to have a hand in deciding the upper limit of the intelligence and confidential funds or which activities could be charged against the intelligence and confidential funds..." — This illustrates the Court's reasoning that their role was confined to ministerial acts.

• Madera v. Commission on Audit, G.R. No. 244128, September 8, 2020 — Established the rules on return for disallowed amounts, including that certifying officers acting in good faith in the regular performance of ministerial functions are not civilly liable to return.
• Celeste v. Commission on Audit, G.R. No. 237843, June 15, 2021 — Held that officials whose participation is limited to certifying availability of funds or completeness of documents are presumed to have acted in good faith.
• Alejandrino v. Commission on Audit, G.R. No. 237843, June 15, 2021 — Explained that certifying officers' participation is ministerial because they could not refuse to certify if the matters were true.

• Item II.2 and II.4, DILG Memorandum Circular No. 99-65 — Provides the cap on intelligence/confidential funds (30% of peace and order budget or 3% of total appropriations, whichever lower) and defines the scope of peace and order programs.
• Sections 102 and 103, Presidential Decree No. 1445 (Government Auditing Code of the Philippines) — Establishes the primary responsibility of agency heads and the personal liability for unlawful expenditures.
• Sections 38 and 39, Book I, Chapter 9, 1987 Administrative Code — Provide that public officers are not civilly liable for acts done in the performance of official duties absent bad faith, malice, or gross negligence.

Chief Justice Gesmundo, Senior Associate Justice Leonen, and Justices Caguioa, Hernando, Lazaro-Javier, Inting, Zalameda, M. Lopez, Gaerlan, Rosario, J. Lopez, Marquez, Kho, Jr., and Singh concurred.