Philippine Charity Sweepstakes Office (PCSO) vs. Michael G. Aguinaldo

The COA properly disallows CNA benefits granted by a GOCC when they violate compensation laws or lack required DBM review and presidential approval; the GOCC Board’s power to fix compensation is not absolute but subject to pertinent civil service and compensation laws. Approving and certifying officers are solidarily liable only for disallowed amounts where their certifications were not merely ministerial and were erroneous as to the substantive ground for disallowance; passive recipients whose exoneration became final may no longer be held liable.

The Philippine Charity Sweepstakes Office is a government-owned and controlled corporation operating under its charter, Republic Act No. 1169, as amended. Its employees are represented by the Sweepstakes Employees Union, with which PCSO entered into collective negotiation agreements governing economic benefits. The Commission on Audit is constitutionally mandated to prevent irregular, unnecessary, excessive, extravagant, or unconscionable expenditures or uses of government funds and properties. The dispute concerns benefits granted under a 2008 CNA to PCSO’s Camarines Norte Provincial District Office employees for CY 2009.

On March 4, 2008, the Philippine Charity Sweepstakes Office and the Sweepstakes Employees Union entered into a Collective Negotiation Agreement valid for three years, which authorized the payment of several economic benefits to PCSO employees. The individual petitioners were SEU members assigned at the PCSO Camarines Norte Provincial District Office. In CY 2009, PCSO paid them benefits under the CNA, namely Hazard Pay, Rice Allowance, Christmas Bonus, Staple Food Allowance, Grocery Allowance, Educational Assistance, Anniversary Bonus, Signing Bonus, and Revenue Performance Incentive Pay, in the total amount of PHP 2,020,452.40.

In 2010, the Audit Team assigned to PCSO issued notices of suspension which, in February 2011, matured into Notices of Disallowance covering the grant of benefits under the CNA. ND No. 11-01-09-OF(PCSO) disallowed Hazard Pay of PHP 120,000.00 for failure to submit a certification from the Secretary of National Defense on strife-torn or embattled areas under Sections 55 and 59 of the General Appropriations Act of 2009. ND No. 11-02-OF-2009(PCSO) disallowed Rice Allowance of PHP 180,000.00 for failure to submit favorable review by the Department of Budget and Management and approval of the President. ND No. 11-03-OF-2009(PCSO) disallowed Christmas Bonus of PHP 517,025.40 because Republic Act No. 6686, as amended by Republic Act No. 8441, authorized only one month salary as Christmas Bonus and a cash gift of PHP 5,000.00, while PCSO paid the equivalent of three months’ salary. ND No. 11-04-OF-2009(PCSO) disallowed Staple Food Allowance of PHP 60,000.00, and ND No. 11-05-OF-2009(PCSO) disallowed Grocery Allowance of PHP 300,000.00, both for lack of DBM review and presidential approval. ND No. 11-06-OF-2009(PCSO) disallowed Educational Assistance of PHP 418,427.00 for lack of DBM review and presidential approval. ND No. 11-07-OF-2009(PCSO) disallowed Anniversary Bonus of PHP 125,000.00 and Signing Bonus of PHP 100,000.00 for lack of DBM review and presidential approval; the signing bonus was also not considered truly reasonable compensation under Social Security System vs. COA, and the Anniversary Bonus exceeded the PHP 3,000.00 maximum per employee under Administrative Order No. 26. ND No. 11-08-OF-2009(PCSO) disallowed Revenue Performance Incentive Pay of PHP 200,000.00 for lack of DBM review and presidential approval and because Administrative Order No. 161 limited incentive pay to PHP 2,000.00, later increased to PHP 2,500.00, while PCSO granted performance incentive five times at PHP 20,000.00 per payout.

Under the NDs, the participation of petitioners was determined as follows: Estrella P. Abasolo was a payee and certified the correctness of the payroll; for Hazard Duty Pay, Staple Food Allowance, Grocery Allowance, and Revenue Performance Incentive Pay, she was a signatory to the budget utilization slip certifying that the charges were legal, necessary, and under her direct supervision. Edna M. Teoxon, Rowena E. Villespin, Eric D. Basit, and Ela C. Peña were payees. Remeliza M. Gabuyo was a signatory to Box B of Disbursement Vouchers approving payment.

PCSO appealed the NDs to the Office of the Regional Director of the COA Regional Office No. V. The COA Regional Director partially granted the appeal, modifying only ND No. 11-07-OF-2009(PCSO) by reducing the Anniversary Bonus from PHP 125,000.00 to PHP 110,000.00. On automatic review, the COA-CP affirmed the Regional Director’s decision with further modification in Decision No. 2019-309 dated August 9, 2019, reducing the total disallowed amount to PHP 1,993,052.40. The COA-CP explained that DBM Budget Circular No. 2006-1 set limitations for CNA Incentives: all cash incentives in CNAs shall be consolidated into a single cash incentive; the CNA incentive shall not be pre-determined since it depends on savings; it shall be paid as a one-time benefit after the end of the year; and it shall be sourced only from savings from released Maintenance and Other Operating Expenses allotments. The COA-CP also held that PCSO’s Board of Directors’ discretion in determining personnel compensation is not absolute and should comply with standards laid down by law. Passive recipients were excused from refunding the amounts they received in good faith, while approving officers were found solidarily liable for the total amount disallowed.

PCSO moved for reconsideration on October 1, 2019, arguing that there was post-facto approval by the President of the allowances and benefits. It submitted a letter signed by former Executive Secretary Paquito N. Ochoa, Jr. addressed to then PCSO Chairperson Margarita P. Juico, stating that PCSO had requested post-facto approval of various benefits/incentives previously given to PCSO officials and employees, and that the Office of the President approved/confirmed the grant of said benefits/incentives prior to 8 September 2010, the effectivity date of Executive Order No. 7. Executive Order No. 7, Section 9, imposed a moratorium on increases in salaries, allowances, incentives, and other benefits. In its Assailed Resolution dated January 28, 2022, the COA-CP affirmed the disallowances in the modified amounts, held that the supposed post-facto approval did not validate the allowances because they violated compensation laws, and reinstated the liability of payees to return the amounts they respectively received. Approving/certifying officers remained solidarily liable for the net disallowed amount, which is the total disallowance less the amount refunded by the payees.

• PCSO Charter Authority: Petitioners argued that Section 9 of Republic Act No. 1169, the PCSO Charter, as amended, empowers the PCSO Board to fix the salaries and determine the reasonable allowances, bonuses, and other incentives of the officers and employees of the agency.
• Regular Compensation and Long Practice: Petitioners maintained that the PCSO Board approved the release of PCSO benefits as part of the employees’ regular compensation and remuneration, and that these benefits had become part of the compensation package by reason of long and regular concession.
• Source of Funds: Petitioners argued that the release of benefits was sourced from PCSO’s operating fund representing 15% of the revenue allocation, which is for day-to-day operation, maintenance, and capital expenditures, and charged against the savings of PCSO.
• Ex Post Facto Presidential Approval: Petitioners claimed that the ex post facto approval by the Office of the President on May 19, 2011 expressly authorized the grant of the benefits/incentives to PCSO officials and employees, rendering the NDs moot and academic and superseded by the approval.
• Good Faith of Approving and Certifying Officers: Petitioners argued that PCSO’s Board of Directors and other approving and certifying officers acted in good faith and without malice, citing a reasonable textual interpretation of the legality of the grant based on the PCSO Charter, several presidential approvals over the years, and the alleged vagueness of Executive Secretary Ochoa’s letter as a mistake of fact or difficult question of law.
• GOCC Fiscal Autonomy: Petitioners claimed that government-owned and controlled corporations are generally a class of their own, distinct from National Government Agencies, because GOCCs are proprietary in nature and compete with the private sector; they cited Central Bank Employees Association, Inc. vs. Bangko Sentral ng Pilipinas and argued that Republic Act No. 10149’s enactment proved that GOCCs with original charters generally enjoy fiscal autonomy.

• Grave Abuse of Discretion / Disallowance: Whether the COA gravely abused its discretion in disallowing PCSO’s payment of various CNA benefits and allowances to its Camarines Norte officers and employees for CY 2009.
• Post-Facto Presidential Approval: Whether the alleged ex post facto approval by the Office of the President through Executive Secretary Ochoa’s letter validated the disallowed benefits and rendered the NDs moot.
• PCSO Board’s Compensation Power: Whether the PCSO Board’s charter authority to fix compensation and benefits exempted it from compensation laws and from DBM review and presidential approval.
• Liability of Approving and Certifying Officers: Whether approving and certifying officers may be held solidarily liable for disallowed amounts notwithstanding their claim of good faith.
• Liability of Passive Recipients and Payees: Whether passive recipients and payees may be required to return disallowed amounts, considering the COA’s earlier exoneration and the finality of that exoneration.
• TRO / Preliminary Injunction: Whether petitioners established entitlement to a temporary restraining order or preliminary injunction.
• Procedural Defects: Whether the petition should be dismissed for late filing, non-payment of docket fees, lack of affidavit of service, and defective verification.

• Grave Abuse of Discretion / Disallowance: No. The COA correctly disallowed the benefits and allowances, as it was performing its constitutional mandate to prevent irregular, unnecessary, excessive, extravagant, or unconscionable expenditures of government funds.
• Post-Facto Presidential Approval: No. Executive Secretary Ochoa’s letter was too vague, did not identify the benefits being approved, and could not validate benefits that violated express provisions of law.
• PCSO Board’s Compensation Power: No. The PCSO Board’s power under its charter is subject to pertinent civil service and compensation laws; DBM review and presidential approval were required, and the Board did not possess absolute fiscal autonomy.
• Liability of Approving and Certifying Officers: Yes, but only to the extent of their participation. Good faith excused ministerial certifications unrelated to the disallowance; erroneous certifications for Hazard Pay, Staple Food Allowance, Grocery Allowance, and Revenue Performance Incentive Pay created liability.
• Liability of Passive Recipients and Payees: Passive recipients Teoxon, Villespin, Basit, and Peña are excused because the COA’s earlier exoneration became final and executory; Abasolo remains liable as payee and certifying officer.
• TRO / Preliminary Injunction: No. Petitioners failed to show extreme urgency, a clear right, and grave and irreparable injury.
• Procedural Defects: The petition was filed out of time and suffered from procedural defects, but the Court relaxed the rules to prevent a miscarriage of justice and rule on the merits.

• Grave Abuse of Discretion / Disallowance: The COA-CP affirmed the disallowance of the subject CNA benefits and allowances for violating various laws and administrative rules. The defects were not limited to lack of presidential and DBM approval: Hazard Pay lacked the DND certification required by Sections 55 and 59 of the GAA of 2009; Christmas Bonus exceeded the amount allowed by Republic Act No. 6686, as amended by Republic Act No. 8441; Anniversary Bonus exceeded the maximum under Administrative Order No. 26; and Revenue Performance Incentive Pay exceeded the limit under Administrative Order No. 161 and was granted multiple times. The COA acted within its mandate under Article IX-D, Section 2(2) of the Constitution to prevent irregular, unnecessary, excessive, extravagant, or unconscionable expenditures. No grave abuse of discretion was shown.

• Post-Facto Presidential Approval: Executive Secretary Ochoa’s letter could not defeat the disallowances. First, some benefits outright violated provisions of law, such as Hazard Pay, which required a DND certification, and Christmas Bonus, which had a specific maximum amount. Second, the letter did not clearly state which benefits were being approved; it was a response to a PCSO request and merely approved/confirmed the grant of benefits/incentives prior to 8 September 2010, while directing PCSO to comply with Executive Order No. 7 and Executive Order No. 24. Without proof that the benefits referred to in the letter were the very same benefits disallowed by COA, no presidential approval could be established. Prior PCSO vs. COA cases, including PCSO vs. Chairperson Pulido-Tan, held that where an express provision of law prohibits the grant of certain benefits, the law must be enforced even if it prejudices certain parties due to an error committed by public officials; an executive act is valid only when it is not contrary to law or the Constitution. The approval was too vague to be a source of rights.

• PCSO Board’s Compensation Power: Petitioners’ reliance on Central Bank Employees Association, Inc. vs. Bangko Sentral ng Pilipinas was misplaced. That case explained that GFIs and GOCCs were a class of their own because the charters of other GFIs exempted their employees from the Salary Standardization Law, making BSP’s rank-and-file employees’ continued coverage discriminatory. PCSO’s charter contains no such exemption; Section 9 subjects the Board’s power to fix salaries and determine reasonable allowances, bonuses, and incentives to pertinent civil service and compensation laws. Presidential Decree No. 985, Section 2, which petitioners cited, required presidential approval and had already been repealed by Republic Act No. 6758. Republic Act No. 10149 did not support petitioners’ claim of fiscal autonomy. Intia, Jr. vs. Commission on Audit, Philippine Retirement Authority vs. Buñag, and PhilHealth vs. Commission on Audit all held that a GOCC Board’s discretion over personnel compensation is not absolute and must conform to standards laid down by law, including DBM review under Presidential Decree No. 1597. PCSO vs. Chairperson Pulido-Tan likewise held that the PCSO charter does not grant the Board unbridled authority to set salaries and allowances and that PCSO was covered by Presidential Decree No. 985, Presidential Decree No. 1597, and the rules of the Office of Compensation and Position Classification under the DBM.

• Liability of Approving and Certifying Officers: Under Madera vs. Commission on Audit, if a Notice of Disallowance is upheld, approving and certifying officers who acted in good faith, in regular performance of official functions, and with the diligence of a good father of the family are not civilly liable to return under Section 38 of the Administrative Code of 1987. Approving and certifying officers clearly shown to have acted in bad faith, malice, or gross negligence are solidarily liable to return only the net disallowed amount under Section 43. Recipients are liable to return the amounts respectively received unless they show the amounts were genuinely given in consideration of services rendered, and the Court may excuse return based on undue prejudice, social justice considerations, and other bona fide exceptions. Celeste vs. Commission on Audit and Jalbuena vs. Commission on Audit explain that officers performing ministerial duties are not involved in decision-making and are bound to implement directives of higher policy-determining positions; if the disallowance is due to a substantive flaw separate and distinct from the contents of their certifications, and COA has not found the certifications false, they acted in good faith. Applying these rules per benefit: for Hazard Pay, Gabuyo certified that supporting documents were complete and proper and that funds were available, but her certification was incorrect because the DND certification was required; Abasolo certified the correctness of the payroll and that the charges were legal, necessary, and under her direct supervision, which was also incorrect. Both cannot be considered in good faith as to Hazard Pay. For Staple Food Allowance and Grocery Allowance, Abasolo’s certification that the charges were legal and necessary was erroneous because the required approvals were lacking; Gabuyo’s certification as to completeness of documents and availability of funds was unrelated to the ground for disallowance, so she acted in good faith. For Christmas Bonus, Abasolo certified only the correctness of the payroll and Gabuyo certified only completeness of documents and availability of funds; neither certification determined the amount paid, which was decided by the PCSO Board, so both acted in good faith. For Rice Allowance, Educational Assistance, Anniversary Bonus, and Signing Bonus, Abasolo’s certification of payroll correctness and Gabuyo’s certification of completeness of documents and availability of funds were ministerial and not relevant to the main ground for disallowance, so both acted in good faith. For Revenue Performance Incentive Pay, Abasolo certified the correctness of the payroll and that the charges were legal, necessary, and under her direct supervision; the latter certification was improper, so she is liable, while Gabuyo performed a ministerial duty and acted in good faith.

• Liability of Passive Recipients and Payees: In its August 9, 2019 Decision No. 2019-309, the COA had already absolved the passive recipients on the ground that they received the amounts in good faith. Under Madera, the liability of payees who did not participate in the grant and approval of disbursements to return disallowed amounts is rooted in unjust enrichment and solutio indebiti; good faith in receiving does not ordinarily excuse return. However, the exclusion of the passive recipients from liability was no longer raised as an error in the Motion for Reconsideration, and it became final and executory upon the lapse of the reglementary period under the COA Rules of Procedure. The reglementary period as to the liability of payees lapsed on October 9, 2019, and the COA reinstated that liability only in its Assailed Resolution dated January 28, 2022, well after the earlier exoneration had become final. As held in Incumbent and Former Employees of the National Economic and Development Authority, Regional Office XIII vs. Commission on Audit, parties who do not challenge a favorable ruling for obvious reasons can no longer be prejudiced by a subsequent unilateral review. Thus, passive recipients Teoxon, Villespin, Basit, and Peña are excused. Abasolo is distinguished from the passive recipients because she was a payee and also participated as a certifying officer; she was not among those excused by the COA in its earlier Decision, so her liability to return the amounts she received persists. She must return the amounts of Hazard Pay, Staple Food Allowance, Grocery Allowance, Christmas Bonus, Rice Allowance, Educational Assistance, Anniversary Bonus, Signing Bonus, and Revenue Performance Incentive Pay which she received. As to Hazard Pay, she shares solidary liability with Gabuyo, who was not a payee but erroneously certified that supporting documents for the disbursement of Hazard Pay were complete and proper. The Court also noted that the disallowed amount of Educational Assistance differs between ND No. 11-06-OF-2009(PCSO), which stated PHP 418,427.00, and COA-CP Decision No. 2019-309, which stated PHP 418,527.00; the COA was directed to clarify the correct amount and determine the proper amount of Educational Assistance solidarily due from Abasolo and Gabuyo.

• TRO / Preliminary Injunction: Rule 58, Section 3 of the Rules of Civil Procedure requires that the applicant be entitled to the relief demanded, that the act complained of probably work injustice, or that a party is doing or attempting an act in violation of rights tending to render judgment ineffectual. Tiong Bi, Inc. vs. Philippine Health Insurance Corporation held that a TRO is issued only if the matter is of such extreme urgency that grave injustice and irreparable injury will arise unless it is issued immediately. Petitioners failed to prove entitlement to reversal of the COA-CP’s Assailed Resolution and the lifting of the NDs; in fact, the COA-CP correctly disallowed the benefits. There was no clear showing that petitioners’ rights would be violated or that they would suffer grave and irreparable injury if the disallowances were upheld. The prayer for TRO and/or preliminary injunction was denied.

• Procedural Defects: The last day to file the Petition was July 25, 2023, but the Petition was posted and deemed filed on July 26, 2023. Petitioners also failed to pay the necessary docket fee. The Petition did not come with an affidavit of service or an explanation why service was not done personally. There was also no proper verification, because the attached verification qualified affiant Irma S. Guemo’s personal knowledge as being “supported by the records relating to this case,” and Guemo failed to attest, as required by Section 4, Rule 7 of the Rules of Court, that the pleading was not filed to harass, cause unnecessary delay, or needlessly increase the cost of litigation, and that the factual allegations had evidentiary support or would have evidentiary support after a reasonable opportunity for discovery. Having no proper verification, the Petition would ordinarily be deemed unsigned. These defects could constitute sufficient grounds for dismissal, but the Court relaxed the rules to prevent undue prejudice and rule on the merits.

• COA’s Constitutional Mandate to Disallow Irregular Expenditures — Article IX-D, Section 2(2) of the 1987 Constitution empowers the COA to prevent irregular, unnecessary, excessive, extravagant, or unconscionable expenditures or uses of government funds and properties. The Court applied this mandate in holding that the COA-CP correctly disallowed the PCSO benefits and allowances.

• GOCC Board’s Compensation Power Is Not Absolute — The authority of a GOCC’s Board to fix compensation and other benefits for personnel is always subject to pertinent laws and rules and does not equate to absolute fiscal autonomy. The PCSO Board’s power under Section 9 of Republic Act No. 1169 is subject to pertinent civil service and compensation laws. The Court relied on Intia, Jr. vs. Commission on Audit, Philippine Retirement Authority vs. Buñag, PhilHealth vs. Commission on Audit, and PCSO vs. Chairperson Pulido-Tan to hold that DBM review and presidential approval were required and that the PCSO Board could not unilaterally grant the disallowed benefits.

• Executive Approval Cannot Validate Unlawful Benefits — Where there is an express provision of law prohibiting the grant of certain benefits, the law must be enforced even if it prejudices certain parties on account of an error committed by public officials in granting the benefit. An executive act is valid only when it is not contrary to the laws or the Constitution. The Court applied this doctrine in rejecting Executive Secretary Ochoa’s letter as a source of validation for benefits that violated the GAA of 2009, Republic Act No. 6686, Administrative Order No. 26, and Administrative Order No. 161.

• Vagueness of Presidential Approval — A presidential approval that does not clearly identify the benefits being approved cannot be a source of rights. The Court held that Executive Secretary Ochoa’s letter was too vague because it did not list the benefits or incentives supposedly approved and did not prove that the benefits referred to were the same ones disallowed by COA.

• Liability for Disallowed Amounts Under Madera vs. Commission on Audit — If a Notice of Disallowance is set aside, no return is required. If upheld, the rules on return are: (a) approving and certifying officers who acted in good faith, in regular performance of official functions, and with the diligence of a good father of the family are not civilly liable to return under Section 38 of the Administrative Code of 1987; (b) approving and certifying officers clearly shown to have acted in bad faith, malice, or gross negligence are solidarily liable to return only the net disallowed amount under Section 43; (c) recipients, whether approving or certifying officers or mere passive recipients, are liable to return the disallowed amounts respectively received unless they show the amounts were genuinely given in consideration of services rendered; and (d) the Court may excuse return based on undue prejudice, social justice considerations, and other bona fide exceptions on a case-to-case basis. The Court applied these rules to determine the liability of Abasolo, Gabuyo, and the passive recipients.

• Ministerial vs. Discretionary Certifications — Officers performing ministerial duties are not involved in decision-making for the agency and are bound to implement the directives of higher policy-determining positions. If the disallowance is due to a substantive flaw separate and distinct from the contents of their certifications, and COA has not found the certifications false, these certifying officers acted in good faith and cannot be held liable. The Court applied this doctrine per benefit, excusing Gabuyo for Staple Food Allowance, Grocery Allowance, Christmas Bonus, Rice Allowance, Educational Assistance, Anniversary Bonus, Signing Bonus, and Revenue Performance Incentive Pay, but not for Hazard Pay.

• Finality and Immutability of COA Exoneration — Parties who do not challenge a favorable ruling for obvious reasons can no longer be prejudiced by a subsequent unilateral review. The Court applied this doctrine to excuse passive recipients Teoxon, Villespin, Basit, and Peña because the COA’s earlier exoneration became final and executory before the COA reinstated their liability.

• Unjust Enrichment and Solutio Indebiti for Payees — The liability of payees who did not have any hand in the grant and approval of disbursements to return disallowed amounts is rooted in the civil law concepts of unjust enrichment and solutio indebiti. Good faith in receiving does not ordinarily excuse return, but the Court may excuse return based on finality, undue prejudice, social justice, or other bona fide exceptions. The Court applied this to distinguish Abasolo, who remained liable as payee and certifying officer, from the passive recipients who were already excused.

• CNA Incentive Limitations Under DBM Budget Circular No. 2006-1 — All cash incentives in CNAs shall be consolidated into a single cash incentive collectively paid as the CNA Incentive; the CNA incentive shall not be pre-determined since it depends on savings generated from cost-cutting measures and systems improvement; it shall be paid as a one-time benefit after the end of the year, provided planned programs have been implemented; and it shall be sourced only from savings from released Maintenance and Other Operating Expenses allotments. The COA-CP used these limitations in disallowing the PCSO benefits.

• Specific Statutory and Administrative Limits on Benefits — Hazard Pay requires a certification from the Secretary of National Defense that the location is strife-torn or embattled under Sections 55 and 59 of the GAA of 2009. Christmas Bonus is limited by Republic Act No. 6686, as amended by Republic Act No. 8441, to one month salary and a PHP 5,000.00 cash gift. Anniversary Bonus is limited by Administrative Order No. 26 to PHP 3,000.00 maximum per employee. Revenue Performance Incentive Pay is limited by Administrative Order No. 161 to PHP 2,000.00, later increased to PHP 2,500.00. Signing Bonus was not considered truly reasonable compensation under Social Security System vs. COA. These limits supported the disallowances.

• "where there is an express provision of the law prohibiting the grant of certain benefits, the law must be enforced even if it prejudices certain parties on account of an error committed by public officials in granting the benefit. An executive act shall be valid only when it is not contrary to the laws or the Constitution." — The Court quoted this in rejecting the alleged post-facto presidential approval; it states the ratio that executive approval cannot validate benefits expressly prohibited by law.

• "the authority of a GOCC's Board to fix compensation and other benefits for personnel is always subject to pertinent laws and rules and does not equate to absolute fiscal autonomy." — This is the Court’s canonical formulation of the rule that the PCSO Board’s charter power over compensation is not absolute and must comply with compensation laws and DBM/OP requirements.

• "Approving and certifying officers who acted in good faith, in regular performance of official functions, and with the diligence of a good father of the family are not civilly liable to return consistent with Section 38 of the Administrative Code of 1987." — The Court quoted this from Madera vs. Commission on Audit as the controlling rule on the liability of approving and certifying officers for disallowed amounts.

• "parties who do not challenge a favorable ruling for obvious reasons can no longer be prejudiced by a subsequent unilateral review." — The Court quoted this from Incumbent and Former Employees of the National Economic and Development Authority, Regional Office XIII vs. Commission on Audit in excusing the passive recipients whose earlier exoneration had become final and executory.

• PCSO vs. Chairperson Pulido-Tan, 785 Phil. 266 (2016) — Controlling precedent holding that the PCSO charter does not grant its Board unbridled authority to set salaries and allowances; PCSO is covered by Presidential Decree No. 985, Presidential Decree No. 1597, and OCPC/DBM rules; post-facto approval cannot validate benefits that violate express law.
• Madera vs. Commission on Audit, 882 Phil. 744 (2020) — Controlling precedent on the rules on return and liability of approving/certifying officers, recipients, and payees for disallowed amounts.
• Celeste vs. Commission on Audit, 904 Phil. 199 (2021) — Followed for the rule that officers performing ministerial duties, whose certifications are unrelated to the substantive ground for disallowance and not shown to be false, acted in good faith and cannot be held liable.
• Jalbuena vs. Commission on Audit, G.R. No. 218478, June 19, 2018 — Cited in Celeste for the principle that officers implementing board resolutions perform ministerial duties and are bound to implement directives of higher policy-determining positions.
• Intia, Jr. vs. Commission on Audit, 366 Phil. 273 (1999) — Followed for the rule that a GOCC Board’s discretion on personnel compensation is not absolute and must conform to the Salary Standardization Law and the General Appropriations Act, with DBM review under Presidential Decree No. 1597.
• Philippine Retirement Authority vs. Buñag, 444 Phil. 859 (2003) — Followed for the rule that notwithstanding exemptions from the Office of Compensation and Position Classification, a GOCC must observe policies and guidelines issued by the President and report its compensation plans to the President through the Budget Commission.
• PhilHealth vs. Commission on Audit, 801 Phil. 427 (2016) — Followed for the rule that a GOCC’s power to fix compensation does not give it unbridled discretion to issue allowances; such power is subject to standards laid down by applicable laws, and sustaining unlimited authority would result in invalid delegation of legislative power.
• Central Bank Employees Association, Inc. vs. Bangko Sentral ng Pilipinas, 487 Phil. 531 (2004) — Distinguished; the Court held it did not support PCSO’s claim of fiscal autonomy because it merely explained that other GFI charters exempted employees from the Salary Standardization Law, while PCSO’s charter contains no such exemption.
• Social Security System vs. COA, 433 Phil. 946 (2002) — Cited for the finding that the signing bonus was not a “truly reasonable compensation,” supporting the disallowance of the Signing Bonus.
• Incumbent and Former Employees of the National Economic and Development Authority, Regional Office XIII vs. Commission on Audit, 947 Phil. 591 (2023) — Followed for the rule that parties who do not challenge a favorable ruling for obvious reasons can no longer be prejudiced by a subsequent unilateral review; applied to excuse the passive recipients.
• Tiong Bi, Inc. vs. Philippine Health Insurance Corporation, 847 Phil. 906 (2019) — Cited for the rule that a TRO is issued only if the matter is of such extreme urgency that grave injustice and irreparable injury will arise unless it is issued immediately.
• Philippine Charity Sweepstakes Office vs. Commission on Audit, 892 Phil. 407 (2020) — Cited as a similar PCSO disallowance case where the Court could not rule on the validity of alleged post-facto approval because PCSO failed to offer evidence.
• Philippine Charity Sweepstakes Office vs. Commission on Audit, 919 Phil. 970 (2022) — Cited for the ruling that the approval by the Office of the President was too vague to be a source of rights since there was no list of benefits or incentives supposedly being approved.

• Article IX-D, Section 2(2), 1987 Constitution — Empowers the COA to prevent irregular, unnecessary, excessive, extravagant, or unconscionable expenditures or uses of government funds and properties. The Court held the COA-CP was performing this mandate when it disallowed the PCSO benefits.
• Rule 58, Section 3, Rules of Civil Procedure — Sets the requisites for preliminary injunction. The Court applied it in denying petitioners’ prayer for a TRO and/or preliminary injunction.
• Rule 64 in relation to Rule 65, Rules of Court — The procedural basis for the Petition for Certiorari with Prayer for Temporary Restraining Order.
• Rule 7, Section 4, Rules of Court — Requires verification and attestation that the pleading is not filed to harass, cause unnecessary delay, or needlessly increase the cost of litigation, and that factual allegations have evidentiary support. The Court found the verification defective.
• Republic Act No. 1169 (PCSO Charter), Section 9, as amended — Empowers the PCSO Board to fix salaries and determine reasonable allowances, bonuses, and other incentives, but subject to pertinent civil service and compensation laws. The Court held this did not grant absolute fiscal autonomy.
• Republic Act No. 6758 (Compensation and Position Classification Act of 1989), Section 16 — Expressly repealed Section 2 of Presidential Decree No. 985. The Court used this to reject petitioners’ reliance on Presidential Decree No. 985, Section 2.
• Presidential Decree No. 985, Section 2 — Stated that additional financial incentives may be established by government corporations and financial institutions for their employees, subject to approval of the President. The Court noted it had been repealed by Republic Act No. 6758.
• Presidential Decree No. 1597, Section 6 — Requires review and approval by the Department of Budget and Management of board resolutions affecting compensation. The Court cited this to show the PCSO Board’s power was not absolute.
• Republic Act No. 10149 (GOCC Governance Act of 2011) — Cited by petitioners to argue GOCC fiscal autonomy; the Court found it did not support that interpretation and that PCSO’s charter already subjected it to civil service and compensation laws.
• Republic Act No. 6686, as amended by Republic Act No. 8441 — Authorized Christmas Bonus equivalent to only one month salary and a cash gift of PHP 5,000.00. The Court used this to support the disallowance of the excess Christmas Bonus.
• Administrative Order No. 26 — Authorized an Anniversary Bonus of PHP 3,000.00 maximum per employee. The Court used this to support the disallowance of the PHP 25,000.00 Anniversary Bonus per employee.
• Administrative Order No. 161 — Prescribed a standard incentive pay system and limited incentive pay based on productivity and performance to PHP 2,000.00, later increased to PHP 2,500.00. The Court used this to support the disallowance of the Revenue Performance Incentive Pay.
• Executive Order No. 7, Sections 9 and 10 — Section 9 imposed a moratorium on increases in salaries, allowances, incentives, and other benefits until specifically authorized by the President; Section 10 suspended the grant of allowances, bonuses, incentives, and other perks to members of the Board. The Court cited this in rejecting the post-facto approval.
• Executive Order No. 24, Section 8 — Limits compensation of members of the Board to per diems and performance-based incentives. The Court cited this in rejecting the post-facto approval.
• DBM Budget Circular No. 2006-1 — Set limitations for CNA Incentives: consolidation into a single cash incentive, no pre-determination, one-time payment after the end of the year, and sourcing only from savings from released Maintenance and Other Operating Expenses allotments. The COA-CP used these limitations in disallowing the benefits.
• Sections 55 and 59, General Appropriations Act of 2009 — Required a certification from the Secretary of National Defense on strife-torn or embattled areas for Hazard Pay. The Court used this to support the disallowance of Hazard Pay.
• Administrative Code of 1987, Sections 38 and 43 — Section 38 governs the civil liability of approving and certifying officers who acted in good faith; Section 43 governs solidary liability of officers who acted in bad faith, malice, or gross negligence. The Court applied these through Madera vs. Commission on Audit.
• COA Circular No. 2002-002, NGAS Volume 2, Appendix 43 — Describes Box B of Disbursement Vouchers as a certification of the Head of Accounting Unit/Authorized Official that supporting documents are complete and proper and that funds are available. The Court used this to assess Gabuyo’s certification.
• Section 7, Rule V, 2009 Revised Rules of Procedure of the COA — Provides for automatic review by the Commission Proper of the Director’s decision. The case reached the COA-CP through this automatic review.

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