EN BANC

[ G.R. No. 238940. April 19, 2022 ]

ANTONIETA ABELLA, MANCIO DANILO ALEGADO, ALBERTO

BUCA, AURORA CABALLES, JUDITH CALO, JOSEPHINE CHUA,
JOYCE HIDALGO, ALDEBERAN MORDENO, LORDEN VISMANOS,
WILFREDO SAGUSAY, AND AURORA ZAPORTIZA, PETITIONERS,
VS. COMMISSION ON AUDIT PROPER AND COMMISSION ON AUDIT
REGIONAL OFFICE NO. XIII, BUTUAN CITY, RESPONDENTS.
DECISION

LOPEZ, M., J.:

This Petition for Certiorari[1] under Rule 64, in relation to Rule 65, of the Revised Rules of Court assails
the Decision No. 2016-488[2] dated December 29, 2016 of the Commission on Audit (COA) Proper and
the Resolution No. 2018-012[3] dated October 26, 2017 of the COA En Banc, which upheld the
disallowance of the extraordinary and miscellaneous expenses (EME) paid to several City Government of
Butuan officials for calendar years 2004 to 2009, amounting to an aggregate of P8,099,080.66.

FACTS

The Department of Budget and Management (DBM) Regional Office No. XIII disapproved the separate
item for EME appropriation in the City of Butuan's annual budget for the fiscal year 2000 as it violates
Section 325(h)[4] of Republic Act (RA) No. 7160 [5] or the Local Government Code of 1991 (LGC), which
prohibits appropriations with the same purpose as that of discretionary funds. The DBM explained that
the EME is deemed part of the discretionary expenses of the local chief executive; hence, cannot be a
separate item of appropriation.[6] The Sangguniang Panlungsod (SP) of Butuan City sought
reconsideration, but the DBM affirmed the disapproval of such appropriation in its Legal Opinion No. L-
B-2001-10.[7] Nevertheless, the SP of Butuan City enacted SP Ordinance No. 2557-2004, [8] granting EME
allowances to certain officials.[9] By virtue of this, a series of EME disbursements were made.

On January 12, 2006, the Regional Legal and Adjudication Office, COA Regional Office No. XIII, issued
Notice of Disallowance (ND) No. 2006-001 (2004) disallowing the EMEs paid in June and July 2004 in
the total amount of P973,409.09 for lack of legal basis. No appeal was taken within the reglementary
period, rendering the ND final. Accordingly, a Notice of Finality of Decision (NFD) and Final Order of
Adjudication (now COA Order of Execution) were issued on October 26, 2009.[10]
Meanwhile, the City Government of Butuan continued to appropriate and grant EME to its officials until
2010.[11] Consequently, eight more NDs[12] (2009 NDs) were issued in March 2009, disallowing the EMEs
paid in 2008 for a total amount of P2,177,463.16.[13] An appeal was filed but was denied in COA Regional
Office XIII Decision No. 2011-046.[14]
On January 24, 2012, 87 more NDs[15] (2012 NDs) were issued, disallowing all other EMEs paid from
2004 to 2009. Petitioners, as recipients held liable to settle the disallowances, appealed all 2012 NDs,
together with seven[16] of the 2009 NDs, to the COA Regional Office XIII on July 31, 2012. In its
Decision No. 2013-007[17] dated May 6, 2013, the COA Regional Office No. XIII denied the consolidated
appeals for lack of merit. The disallowances were sustained in accordance with DBM Legal Opinion No.
L-B-2001-10. The Regional Director ruled that the DBM is empowered under Section 326 of the LGC to
review appropriation ordinances. Since DBM Legal Opinion No. L-B-2001-10 has never been questioned,
it remains valid and effective, leaving the EME disbursements without legal basis. Thus, petitioners
cannot claim any legal right over the EMEs paid to them.

An appeal was lodged before the COA Proper but was likewise denied for lack of merit in the assailed
Decision No. 2016-488.[18] The COA Proper affirmed the COA Regional Office XIII Decision No. 2013-
007 as regards the 2012 NDs. On the other hand, the COA Proper found that the 2009 NDs were already
affirmed in COA Regional Office XIII Decision No. 2011-046, and no appeal from that decision was
filed within the reglementary period; hence, an NFD and an Order of Execution were ordered to be issued
therefor.[19]
In the present recourse, petitioners invoke their right to speedy disposition of cases since the proceedings
before the COA Regional Office XIII took more than one (1) year and four (4) months from the issuance
of the NDs on January 24, 2012, up to the time its Decision No. 2013-007 was rendered. [20] Thereafter, it
took another three (3) years and seven (7) months for the COA Proper to resolve the appeal.
Substantively, petitioners argue that they are not legally bound by the DBM Legal Opinion as it was
issued as a response to the SP's query, to which they are not signatories. [21] Petitioners further claim that
the EME disallowances are anathema to the city government's constitutionally-guaranteed fiscal
autonomy. Lastly, petitioners invoke good faith as passive recipients of the disallowed EMEs to exculpate
them from the liability to refund.[22]
For its part, the COA Proper maintains that the period dedicated to the resolution of the case did not
exceed the reasonable limits for the work involved. It contends that there is no showing that the apparent
delay is vexatious, capricious, and oppressive as to violate petitioners' right to speedy disposition of a
case.[23] Substantively, the COA Proper contends that DBM Legal Opinion No. L-B-2001-10 was issued
upon the City of Butuan's request; thus, binding upon the city and all its officials/employees. It further
explains that the disallowances did not subvert the principle of fiscal autonomy as local government units
(LGU) are still bound by the state policy of judicious utilization of public funds and properties. [24] Finally,
the COA Proper argues that petitioners must refund the EME they received for being given without legal
basis.[25]
ISSUES
I. Whether there was a violation of the right to speedy disposition of cases;

II. Whether the issuance of the NDs was proper; and

III. Whether good faith can exonerate petitioners' liability to settle the disallowances.
RULING

The petition lacks merit.

I. No violation of the right to

speedy disposition of cases

The constitutional guarantee to a speedy disposition of cases is a basic tenet of procedural due process
which articulates that any party to a case may demand expeditious action from all officials who are tasked
with the administration of justice.[26] Section 16, Article III of the Constitution provides:
SEC. 16. All persons shall have the right to a speedy disposition of their cases before all judicial, quasi-
judicial or administrative bodies.Jurisprudence, however, teaches us that not every delay in the
disposition of matters before any justice-administering body is arbitrary and constitutive of a violation of
the constitutional guarantee of speedy disposition of cases. Certain factors must be taken into account,
depending on the circumstances obtaining in every case. We have held:The right to a speedy disposition
of a case, like the right to a speedy trial, is deemed violated only when the proceeding is attended by
vexatious, capricious, and oppressive delays; or when unjustified postponements of the trial are asked for
and secured, or when without cause or justifiable motive, a long period of time is allowed to elapse
without the party having his case tried. Equally applicable is the balancing test used to determine whether
a defendant has been denied his right to a speedy trial, or a speedy disposition of a case for that matter, in
which the conduct of both the prosecution and the defendant are weighed.

[T]his Court, in Martin v. Ver, began adopting the "balancing test" to determine whether a defendant's
right to a speedy trial and a speedy disposition of cases has been violated. As this test necessarily compels
the courts to approach such cases on an ad hoc basis, the conduct of both the prosecution and defendant
are weighed apropos the four-fold factors, to wit: (1) length of delay; (2) reason for the delay; (3)
defendant's assertion or non-assertion of his right; and (4) prejudice to defendant resulting from delay.
None of these elements, however, is either a necessary or sufficient condition; they are related and must
be considered together with other relevant circumstances. These factors have no talismanic qualities as
courts must still engage in a difficult and sensitive balancing process. [27] (Citations omitted)In the seminal
case of Cagang v. Sandiganbayan,[28] the Court laid down definitive guidelines in determining the
existence of inordinate delay which violates the rights to speedy trial and speedy disposition, viz.:
To summarize, inordinate delay in the resolution and termination of a preliminary investigation violates
the accused's right to due process and the speedy disposition of cases, and may result in the dismissal of
the case against the accused. The burden of proving delay depends on whether delay is alleged within the
periods provided by law or procedural rules. If the delay is alleged to have occurred during the given
periods, the burden is on the respondent or the accused to prove that the delay was inordinate. If the delay
is alleged to have occurred beyond the given periods, the burden shifts to the prosecution to prove that the
delay was reasonable under the circumstances and that no prejudice was suffered by the accused as a
result of the delay.

The determination of whether the delay was inordinate is not through mere mathematical
reckoning but through the examination of the facts and circumstances surrounding the case. Courts
should appraise a reasonable period from the point of view of how much time a competent and
independent public officer would need in relation to the complexity of a given case. If there has been
delay, the prosecution must be able to satisfactorily explain the reasons for such delay and that no
prejudice was suffered by the accused as a result. The timely invocation of the accused's constitutional
rights must also be examined on a case-to-case basis. [29] (Emphasis supplied)In this case, the COA does
not refute that it took a substantial period of time before the appeals were resolved. Such length of time,
however, is not proof of delay that violates the right to speedy disposition. The consolidated appeals
cover 94 disallowances which means that the COA Regional Office No. XIII and the COA Proper sifted
through and reviewed 94 sets of records, which notably date back from 2004 to 2009. Not to mention,
each ND involves several transactions with several responsible individuals and numerous disbursement
vouchers. As a matter of course, they had to conduct a thorough audit of the transactions, and research the
applicable laws and jurisprudence to judiciously determine the propriety of the EME disbursements. It is
also noteworthy that, gleaned from 87 of the 94 NDs, records pertinent to the cases were already
destroyed when the COA office caught fire on February 4, 2011. Consequently, important details such as
the "signatories of [some disbursement voucher]/payroll cannot be ascertained because the original
payrolls bearing the [names of the] signatories were included in the burned documents." [30] Owing to these
challenges that the COA dealt with in evaluating the questioned transactions, we find nothing capricious
or oppressive in the protracted proceedings on appeal.

Moreover, petitioners failed to seasonably question the violation of their right to speedy disposition, if at
all. Throughout the proceedings before the COA Regional Office and the COA Proper, petitioners never
asserted their right. They could have filed a manifestation or a motion for early resolution of their case
before the COA Regional Office, or invoked their right before the COA Proper on appeal, but did not do
so. Instead, in a last-ditch attempt to seek a favorable resolution, petitioners raise this alleged
constitutional violation for the first time in this petition. Certainly, this lapse deprived the COA of the
opportunity to address the issue and beclouded petitioners' invocation of inordinate delay. We emphasize
that the right to speedy disposition of cases is not a last line of remedy when parties find themselves on
the losing end of the proceedings.[31]
Lastly, the sheer length of time, without allegation and proof of prejudice to the party invoking the right,
does not equate to an inordinate delay to justify the nullification of the COA Proper issuances. The right
to speedy disposition of cases is not a magical invocation that can automatically compel courts or any
justice-administering agency to rule in one's favor. To sustain a violation of this right, there must be an
actual, specific, and real injury to the claimant's rights as a result of the delay, not mere conjectural
supplications of prejudice or generalized invocation of the constitutional right. A claim of prejudice, if at
all, must have a conclusive and factual basis.[32]
II. EME disbursements properly
disallowed

The State recognizes that government officials and employees incur EME in the performance of their
duties. However, the amount intended for that purpose, like any other government expenditure, is subject
to limitations under established rules and regulations to eliminate unnecessary expenses and forestall
possible abuse of power by those exercising authority to disburse funds. Pertinently, Section 325(h) of the
LGC provides:
SEC. 325. General Limitations. — The use of the provincial, city, and municipal funds shall be subject to
the following limitations:

xxxx

(h) The annual appropriations for

discretionary purposes of the local
chief executive shall not exceed
two percent (2%) of the actual
receipts derived from basic real
property tax in the next preceding
calendar year. Discretionary funds
shall be disbursed only for public
purposes to be supported by
appropriate vouchers and subject
 to such guidelines as may be
prescribed by law. No amount
shall be appropriated for the
same purpose except as
authorized under this Section.
(Emphasis supplied)
The provision proscribes any appropriation with the same purpose as that of discretionary funds. The
DBM, as adopted by the COA, opined that EME and discretionary funds have the same purpose, and as
such, cannot be made separate and distinct items of appropriation. This point is remarkable.

Item 4.7 of COA Circular No. 85-55A [33] states that EME appropriations were, in fact, formerly
denominated as discretionary funds, which answer for the following expenses, viz.:
4.7. EXTRAORDINARY AND MISCELLANEOUS EXPENSE (FORMERLY
DISCRETIONARY FUND)

4.7.1. For National Government Sector

Extraordinary and miscellaneous expenses shall include, but not limited to, expenses incurred
for or during meetings, seminars and conferences, official entertainment of the official or
through his authorized representative, public relations, educational, athletic [,]and cultural
activities, contributions to civic or charitable institutions, membership fees in government
associations, informative magazines, library books and materials, office equipment and
supplies and other similar expenses that are not supported by the regular budget
allocations, PROVIDED, that no portion of the amounts authorized thereon shall be used for
the creation of positions, nor for salaries, wages, allowances, intelligence or confidential
expenses.

4.7.2. Local Government and Corporate Sectors

The above provision contained in 4.7.1 shall also apply to the local government and corporate
sectors. (Emphasis supplied)
COA Circular No. 2006-001,[34] albeit applicable only to government-owned and controlled corporations,
government financial institutions, and their subsidiaries, consistently characterized EME as similar to
discretionary expenses or those which pertain to the same list[35] of expenses enumerated under Item 4.7 of
COA Circular No. 85-55A. In the same vein, COA Circular No. 89-300, [36] although issued for national
government agencies, similarly described the general nature and purpose of EME as an answer to various
financial demands from officials by reason of their positions which are not covered by their salaries and
other emoluments.[37] More recently, in COA Circular No. 2012-001, [38] applicable to LGUs, EME was
also categorized with discretionary expenses.[39]
Undeniably, EME appropriations and discretionary funds have the same purpose, i.e., to have an available
source of funds for certain expenses in relation to the discharge of official functions which are not
covered by the regular budget allocation. It is noteworthy that SP Ordinance No. 2557-2004, which was
the basis of the disallowed disbursements, already had an appropriation for the Office of the City Mayor's
discretionary expenses.[40] Thus, separate amounts appropriated in the local budget ordinance are patent
circumventions of the limitation under Section 325(h) of the LGC. To stress, the provision expressly
prohibits the appropriation of a separate amount for discretionary purposes other than the two percent
(2%) allocated for the local chief executive's discretionary fund.

Furthermore, the COA Regional Director correctly observed that the SP designated its Mayor, Vice
Mayor, and SP/Government Department Heads as having equal ranks to those officials entitled to EME
under the General Appropriations Acts (GAA) of 2004 to 2009, [41] to wit: Department Secretary,
Department Assistant Secretary, and "Assistant Bureau/Director." [42] The SP designations were, however,
made without authorization from the DBM, which was a patent contravention of the GAAs. [43] The
pertinent GAA provisions are clear that only those officials named in the GAA, the officers of equivalent
rank as the DBM authorized, and the offices under them are entitled to claim EME in the amounts
provided in the GAAs.[44]
Petitioners cannot rely on the principle of local autonomy to validate the EME disbursements which were
based on a provision in the local ordinance that patently contravenes the prescribed limitations in the
LGC and the GAAs. The concept of local autonomy does not preclude intervention by the national
government in the form of supervision to ensure that the local programs, fiscal and otherwise, are
consistent with the national goals. [45] Fiscal decentralization — as an aspect of local autonomy — "does
not signify the absolute freedom of the LGUs to create their own sources of revenue and to spend their
revenues unrestrictedly or upon their individual whims and caprices." [46] Indeed, local autonomy was
never intended to sever the partnership and interdependence between the central administration and
LGUs.[47] Thus, notwithstanding autonomy, local appropriations and expenditures are still under the
supervision of the President, through the DBM, [48] as well as the authority of the COA under its plenary
auditing power, to ensure compliance with laws and regulations. Concomitant to the COA's auditing
power is the authority to disallow disbursements of government funds, which contravenes established
laws as in this case.[49]
III. Passive recipients are liable to
refund

Petitioners' invocation of good faith as passive recipients cannot exonerate their liability to refund. In
Madera v. Commission on Audit,[50] we clarified that the recipients' good faith or bad faith is
inconsequential in the determination of their liability in disallowed transactions, applying the principles of
solutio indebiti[51] and unjust enrichment.[52] Certainly, no legal right is conferred to a recipient of any
amount sourced from the public coffers without legal basis. On this premise, the responsibility to return
may be excused (1) upon a showing that the questioned benefits or incentives were genuinely given in
consideration of services rendered; or (2) when excused by the Court on the basis of undue prejudice,
social justice considerations, and other bona fide exceptions depending on the purpose, nature, and
amount of the disallowed benefit or incentive relative to the attending circumstances, [53] because in these
circumstances, the concept of unjust enrichment or mistake in payment is negated. In Abellanosa v.
Commission on Audit,[54] we further explained that such exceptions shall be "limited to disbursements
adequately supported by factual and legal bas[e]s, but were nonetheless validly disallowed x x x on
account of procedural infirmities."[55] Similarly, factors such as "ostensible statutory or legal cover" for
the grant and its "clear, direct, and reasonable connection to the actual performance of the recipients'
official work and functions" must be considered in excusing the recipients' liability on equitable grounds.
[56]

Additionally, recent jurisprudence allows recipients' absolution from the liability to refund when three
years have already lapsed from the time of receipt of the disallowed allowances or benefits before an ND
or any similar notice indicating illegality or irregularity of the disbursement was issued. As enunciated in
Cagayan De Oro City Water District v. Commission on Audit,[57] on grounds of equity and fairness, the
lapse of this three-year period is reasonable to excuse recipients from liability in the disallowed
transactions.

Here, the EME grants were solely hinged upon the appropriation in the local ordinance. No vouchers or
similar supporting documents required under the LGC and COA rules and regulations were presented to
substantiate the EME reimbursements.[58] Records are bereft of any proof that the disallowed amounts
were genuinely used in consideration of or in connection with the recipients' services. Neither is there any
bona fide equitable consideration relevant to the nature, purpose, and amount of the grant that would
warrant the recipients' absolution from their civil obligation to the government. As well, the three-year-
period rule cannot be applied specifically with regard to the 2012 NDs since sufficient notice on the
illegality of the EME disbursements was already available even before the issuance of the 2012 NDs
considering the similar disallowances issued in 2006 and 2009. [59] Thus, it is only proper for petitioners to
return the amounts that they individually received without legal basis.

FOR THESE REASONS, the Petition for Certiorari is DISMISSED. The Decision No. 2016-488 dated
December 29, 2016 and the Resolution No. 2018-012 dated October 26, 2017 of the Commission on
Audit Proper are AFFIRMED.

SO ORDERED.
Gesmundo, C.J., Perlas-Bernabe, S.A.J., Leonen, Caguioa, Hernando, Lazaro-Javier, Inting, Zalameda,
Rosario, J. Lopez, Dimaampao, Marquez, and Kho, Jr., JJ., concur.
Gaerlan, J., on official leave.

[1]
Rollo, pp. 3-40.

[2]
Id. at 137-145: signed by Chairperson Michael G. Aguinaldo, and Commissioners Jose A. Fabia and
Isabel D. Agito.

[3]
Id. at 152.

[4]
SEC. 325. General Limitations. – The use of the provincial, city, and municipal funds shall be subject
to the following limitations:
xxxx
(h) The annual appropriations for discretionary purposes of the local chief executive shall not exceed two
percent (2%) of the actual receipts derived from basic real property tax in the next preceding calendar
year. Discretionary funds shall be disbursed only for public purposes to be supported by appropriate
vouchers and subject to such guidelines as may be prescribed by law. No amount shall be appropriated
for the same purpose except as authorized under this Section. (emphasis supplied)

[5]
Entitled "AN ACT PROVIDING FOR A LOCAL GOVERNMENT CODE OF 1991." Approved:
October 10, 1991. https://www.dbm.gov.ph/wp-content/uploads/Issuances/Legal/ra/lo_no_2001-10.pdf;
last accessed March 28, 2021.

[7]
Id.

[8]
Entitled "AN ORDINANCE APPROPRIATING THE SUM OF SEVEN HUNDRED TWENTY-
EIGHT MILLION TWO HUNDRED SIXTY-ONE THOUSAND SIX HUNDRED NINETY-NINE
(P728,261,699.00) PESOS OR SO MUCH THEREOF, FROM THE GENERAL FUND FOR THE
GOVERNMENT OPERATIONS OF THE CITY OF BUTUAN FOR FISCAL YEAR 2005, AND FOR
OTHER PURPOSE," approved on December 28, 2004, id. 167-225.

[9]
SEC. 9. Extra-ordinary & Miscellaneous Expenses. x x x [T]he following Local Government Officials
and Employees are deemed equivalent in rank to national officials as follows:
Undersecretary — City Mayor
Assistant Secretary — Vice Mayor
Assistant Bureau/Director — Sangguniang Panlungsod/ Gov't/ Department Heads
As equivalent in rank these local officials may use for extraordinary expenses not exceeding the herein
authorized appropriations, as follows:
Mayor — P65,000.00
Vice Mayor — [P]35,000.00
Sangguniang Panlungsod/City Gov't. Department Head — [P]18,000.00
In addition, miscellaneous expenses not exceeding P50,000.00 for each of the offices under the
above[-]named officials are herein authorized.

[10]
Rollo, p. 139.

[11]
Id.

[12]
Notices of Disallowance (ND) Nos. 2009-001 – 005 (2008) and 2009-03-006 – 007 (2008), id. at 67--
73; ND No. 2009-008 (2008) not attached.

[13]
Id. at 139.

[14]
Id. at 140.

[15]
ND Nos. 2012-001 – 013 (2009), id. at 42-54; ND Nos. 2012-016 – 019 (2009), id. at 55-58; ND Nos.
2012-021 – 028 (2009), id. at 59-66; ND Nos. 2012-032 – 033 (2007), id. at 75-76; ND Nos. 2012-036 –
037 (2007), id. at 77-78; ND Nos. 2012-039 – 040 (2007), id. at 79 – 80; ND Nos. 2012-042 – 048
(2007), id. at 81-87; ND Nos. 2012- 054 – 055 (2007), id. at 88-89; ND Nos. 2012-058 – 060 (2007), id.
at 90-92; ND Nos. 2012-062 – 067 (2007), id. at 93-98; ND Nos. 2012-071 – 072 (2007), id. at 99-100;
ND No. 2012-077 (2006). id. at 101; ND Nos. 2012-079 – 080 (2006). id. at 102-103: ND Nos. 2012-082
– 083 (2006), id. at 104-105; ND Nos. 2012-085 – 086 (2006), id. at 106-107; ND Nos. 2012-088 – 089
(2006), id. at 108-109; ND. Nos. 2012-091 – 102 (2006), id. at 110-121; ND No. 2012-119 (2005), id. at
122; ND No. 2012-123 (2005), id. at 123; ND Nos. 2012-125 – 12 (2005), id. at 124-127; ND Nos. 2012-
132 – 133 (2005), id. at 128-129; ND No. 2012-153 (2004), id. at 130; ND No. 2012-157 (2004), id. at
131; ND Nos. 2012-161 – 164 (2004), id. at 132-135; and ND No. 2012-169 (2004) id. at 136.

[16]
ND Nos. 2009-001 – 005 (2008) and 2009-03-006 – 007 (2008), id. at 67-73.

[17]
Id. at 260-263.
[18]
Id. at 137-145.

[19]
Id. at 144.

[20]
Id. at 17-18.

[21]
Id. at 24.

[22]
Id. at 29.

[23]
Id. at 342.

[24]
Id. at 346.

[25]
Id. at 349.

[26]
Magante v. Sandiganbayan (Third Division), 836 Phil. 1108, 1118-1119 (2018).

[27]
Remulla v. Sandiganbayan, 808 Phil. 739, 747-748 (2017).

[28]
837 Phil. 815 (2018).

[29]
Id. at 876-877.

[30]
Rollo, pp. 42-66 and 75-136.

[31]
Republic v. Sandiganbayan (Special Second Division), G.R. No. 231144, February 19, 2020.

[32]
Id.

[33]
COA Circular No. 85-55A, "Amended Rules and Regulations on the Prevention of Irregular,
Unnecessary, Excessive or Extravagant Expenditures or Uses of Funds and Property," dated September 8,
1985.

[34]
"Guidelines on the Disbursement of Extraordinary and Miscellaneous Expenses and Other Similar
Expenses in Government-Owned and Controlled Corporations/Government Financial Institutions and
their Subsidiaries," dated January 3, 2006.
[35]
III. SCOPE AND COVERAGE
This Circular shall be applicable to all GOCCs, GFIs, and their subsidiaries. It shall cover extraordinary
and miscellaneous expenses and other similar expenses such as discretionary, business development
expenses, representation expenses and the like, provided that the nature or purpose of said expenditures
pertain to any of the following:

a. meetings, seminars and conferences;

b. official entertainment;
c. public relations;
d. educational, athletic and cultural activities;
e. contributions to civic or charitable institutions;
f. membership in government associations;
g. membership in national professional organizations duly accredited by the Professional
Regulations Commissions;
h. membership in the Integrated Bar of the Philippines;
i. subscription to professional technical journals and informative magazines, library books and
materials;
j. other similar expenses not supported by the regular budget allocation.
The above enumeration is not exclusive and shall not prevent the inclusion of other similar disbursements
which may be categorized as extraordinary and miscellaneous expenses within its contemplation.
(Emphases supplied)

[36]
"Audit Guidelines on Disbursement for Extraordinary and Miscellaneous Expenses in National
Government Agencies pursuant to Section 19 and other related sections of RA 6688 (General
Appropriations Act for 1989)," dated March 21, 1989.

[37]
III. GENERAL AUDIT PRINCIPLES AND GUIDELINES —
1. The underlying principle behind the provision for authority to use appropriations for extraordinary and
miscellaneous expenses recognizes the need to grant some form of assistance to officials occupying key
positions in the National Government to enable them to meet various financial demands that otherwise
would not have been made on them. Verily, by reason of their incumbency to these positions, they
have to incur expenses of the sort which are not normally charged to or covered by their salaries
and other emoluments. These officials should thus be accorded as much flexibility as possible in the
utilization of the funds involved, subject to limitations imposed by law. (Emphasis supplied)

[38]
"Prescribing the Revised Guidelines and Documentary Requirements for Common Government
Transactions," dated June 14, 2012.

[39]
7.0 Extraordinary and Miscellaneous Expenses
General Guidelines
The amount fixed under the GAA for National Government offices and officials shall be the ceiling in the
disbursement of extraordinary and miscellaneous expenses. It shall cover extraordinary and miscellaneous
expenses and other similar expenses, such as discretionary, business development expenses,
representation expenses and the like. The audit guidelines on disbursement for these expenses in National
Government Agencies are prescribed under COA Circular No. 89-300 dated March 21, 1989. x x x x
For the LGUs, the annual appropriation for discretionary purpose of the local chief executive shall
not exceed 2 percent of the actual receipts derived from the basic real property tax in the next
preceding calendar year as provided under Section 325(h) of the Local Government Code (RA No.
7160).
Appropriations for extraordinary and miscellaneous expenses may be used for the following
purposes, among others:
● Meetings, seminars and conferences
● Official entertainment
● Public relations
● Educational, athletic and cultural activities
● Contributions to civic and charitable institutions
● Membership in government associations
● Membership in national professional organizations duly accredited by the Professional
Regulatory Commission
● Membership in the Integrated Bar of the Philippines
● Subscription to professional technical journals and informative magazines and materials
(include library books and materials)
● Office equipment and supplies
● Other similar expenses not supported by the regular budget allocation
No portion of the amounts authorized in the GAA shall be used for salaries wages allowances confidential
and intelligence expenses. In case of deficiency, the requirements for the foregoing purposes shall be
charged against savings of the agency. These expenditures shall be subject to pertinent accounting and
auditing rules and regulations (Section 23 of FY 2012 GAA or pertinent provisions of the GAA for the
year). (Emphases supplied)

[40]
Rollo, p. 169.

[41]
See REPUBLIC ACT (RA) NO. 9206 or the 2003 General Appropriations Act (GAA) (Reenacted for
2004), SEC. 23; RA No. 9336 or the 2005-2006 GAAs, SEC. 25; RA No. 9401 or the 2007 GAA; RA
No. 9498 or the 2008 GAA, SEC. 25; and RA NO. 9524 or the 2009 GAA, SEC. 26.

[42]
See rollo, p. 222. Note that under the pertinent GAAs, an "Assistant Bureau/Director" is not included
in the list of officials entitled to EME.

[43]
Id. at 262-263.

[44]
Technical Education and Skills Development Authority (TESDA) v. The Commission on Audit,
729 Phil 60, 73 (2014).

[45]
Id. at 77-78.

[46]
Mandanas v. Ochoa, Jr., 835 Phil. 97, 148 (2018).

[47]
Pimentel v. Ochoa, 691 Phil. 143, 153-154 (2012).

[48]
See Villafuerte, Jr. v. Robredo, 749 Phil. 841, 865 (2014); RA No. 7160. SEC. 326. Review of
Appropriation Ordinances of Provinces. Highly-Urbanized Cities, Independent Component Cities arid
Municipalities within the Metropolitan Manila Area. — The Department of Budget and Management
shall review ordinances authorizing the annual or supplemental appropriations of provinces, highly-
urbanized cities, independent component cities, and municipalities within the Metropolitan Manila Area
in accordance with the immediately succeeding Section.

[49]
Veloso v. Commission on Audit, 672 Phil. 419, 434 (2011).

[50]
G.R. No. 244128, September 8, 2020.

[51]
NEW CIVIL CODE, ART. 2154. if something is received when there is no right to demand it, and it
was unduly delivered through mistake, the obligation to return it arises.

[52]
NEW CIVIL CODE, ART. 22. Every person who through an act of performance by another, or any
other means, acquires or comes into possession of something at the expense of the latter without just or
legal ground, shall return the same to him.

[53]
Abellanosa, et al. v. Commission on Audit (Resolution), G.R. No. 185806, November 17 2020.
[54]
Id.

[55]
Citing Reflections of Justice Caguioa on Aballanosa, et al., v. Commission on Audit, id.

[56]
Id.

[57]
G.R. No. 213789, April 27, 2021.

[58]
RA No. 7160, SEC. 325. x x x (h) x x x Discretionary funds shall be disbursed only for public
purposes to be supported by appropriate vouchers and subject to such guidelines as may be prescribed
by law. (emphasis supplied); and COA Circular No. 2012-001, Item No. 7.0 requires "[i]nvoices/receipts
for x x x LGUs x x x [and] [o]ther supporting documents as are necessary depending on the nature of
expense charged."

[59]
As keenly observed by Justice Rodil V. Zalameda during deliberations, petitioners already had
sufficient notice of the potential illegality of the grant considering that EMEs were similarly disallowed in
2006 and 2009, thereby removing the 2012 NDs from coverage of the three-year-period ruled.

Source: Supreme Court E-Library | Date created: March 30, 2023

This page was dynamically generated by the E-Library Content Management System