[ G.R. No. 219425.

January 10, 2023 ]

VIOLETA C. MAGASO, PETITIONER, VS. THE HON. COMMISSION ON AUDIT,

RESPONDENT.

DECISION

ZALAMEDA, J.:

Our laws mandate that disbursements of government funds shall invariably bear the approval
of the proper officials.1 Time and again, We are confronted with situations where the signatories
of an accountable form disavow liability based on blind reliance on the presumption of regularity.
Undoubtedly, as in this case, their signature as approvers or certifiers were not meant to be mere
rubber stamps and their duty as such is not ministerial. Nonetheless, their liability will be
determined based on the extent of their participation in a disallowed transaction.2

The Case

This Petition for Certiorari (Petition)3 under Rule 64 in relation to Rule 65 of the Rules of
Court seeks to reverse and review the Decision dated 31 March 20094 of the Commission on
Audit (COA) in Legal Services Sector (LSS) Decision No. 2009-163. This Petition also seeks to
challenge the Notice of Finality of Decision dated 23 April 2015.

Antecedents

Sometime in 2004, then Congressman Hussin U. Amin (Congressman Amin) of the First
District of Sulu, identified the Municipality of Panglima Tahil, Sulu as one of the recipients of his
Priority Development Assistance Fund (PDAF) for calendar year (CY) 2004. Congressman Amin
requested the Department of Budget and Management (DBM) to allocate P3,000,000.00 for the
procurement of various medicines, medical supplies, and devices to be distributed to the
constituents of the Municipality of Panglima Tahil. As such, the DBM issued Special Allotment
Release Order (SARO) No. ROIX-2004-071 dated 16 March 2004 in the amount of
P3,000,000.00. Said PDAF was released to the Department of Health (DOH), Regional Field
Office IX, Zamboanga City. Thereafter, Memorandum of Agreement (MOA) dated 19 March 2004
was entered into by and between Brenda B.A. Lopez and Mayor Nedra Burahan (Mayor
Burahan), who were the Regional Director of the Center for Health Development (CHD)
Zamboanga Peninsula of the DOH and Municipal Mayor of the Municipality of Panglima Tahil,
Sulu, respectively.5

In response to a complaint filed relative to said transactions, a Special Audit Team (SAT)
was created under Legal and Adjudication Office Order No. 2005-058 tasked to conduct an audit
investigation on various transactions of the DOH-CHD, Zamboanga Peninsula, covering check
disbursements for CY 2004. During their audit, it was found that a Notice of Cash Allocation No.
149403-2 dated 6 May 2004 was issued by the DBM in the amount of P3,000,000.00 to DOH-
CHD, Zamboanga Peninsula. Said fund was eventually released by the latter through Check
Number 70241 dated 7 May 2004 to the Municipality of Panglima Tahil c/o Mayor Burahan during
the 2004 election period.6

After its audit investigation, the SAT issued the Notice of Disallowance No. 07-022-101 (04)
dated 14 March 2007 as it found the transaction violative of Section 26l(w) of Batas Pambansa
Blg. 881, or the Omnibus Election Code. The SAT named the following persons to be held liable:
Mayor Burahan as payee, DBM Director Gerardo Concepcion for his release of the PDAF,
Regional Director Lopez for approving the transaction, Dr. Caridad Y. Baban for certifying the on-
going project status, Chief Administrative Officer Wilfredo Pacatang (Pacatang) for certifying Box
"A" of Disbursement Voucher No. 101-04-05-12,7 and Accountant III Violeta Magaso (Magaso)
for certifying Box "B" of said disbursement voucher. The Notice of Disallowance further directed
the above-named persons to immediately settle the disallowance.8

Based on the representations made by the officials of the Municipality of Panglima Tahil, the
Regional Director of DOH-CHD informed the Commission on Election (COMELEC) about the
procurement of drugs and medicines which were bidded and awarded on or before 26 March
2004 by the Local Government Unit (LGU) concerned and that expenditures were regular and
routine pursuant to COMELEC Resolution No. 6634. However, the SAT Report disclosed that
there were no documents to show that the project was in fact awarded on or before 26 March
2004. As of the audit period, the Municipality of Panglima Tahil had not yet complied with the
provision in the MOA to submit a report on how the amount was spent through a Fund Utilization
Report.9

Aggrieved, Pacatang and Magaso wrote a letter requesting for reconsideration of said Notice
of Disallowar1ce and praying that they be excluded from liability. They cited Section 39 of COA
Circular No. 85-156-B dated 31 May 1989, or the Manual on Certificate of Settlement and
Balances, which provides that the liability of an official or employee for disallowances or
discrepancies in audited accounts shall depend upon his or her participation in the transactions
involved. As such, they argued that: (1) their participation is limited only to their certification in
Box "A" and Box "B" of the disbursement voucher [i.e., Box "A" is for the Chief Administrative
Officer: expenses/advances necessary, lawful and incurred under his/her direct
supervision10 and Box "B" is for the Chief Accountant: supporting documents complete and
proper and cash were available 11]; (2) they signed said disbursement voucher as a matter of
office policy, and their certification was merely based on the supporting documents attached to
it; (3) they totally relied on the representations made by Mayor Burahan that the Municipality of
Panglima Tahil complied with COMELEC Resolution No. 6634; and (4) they were not certifying
the legality and propriety of the events that transpired in the Municipality of Panglima Tahil, but
were only certifying on the completeness of the mandatory minimum supporting documents for
the transaction.12

Ruling of the COA Proper

On 31 March 2009, the COA. thru the LSS, issued the assailed Decision No. 2009-163, the
dispositive portion of which read:

WHEREFORE, premises considered, the herein request for exclusion as

persons liable of Mr. Wilfredo S. Pacatang and Violeta C. Magaso of the
Department of Health, Center for, Health Development (DOH-CHD), Zamboanga
Peninsula, Zamboanga City, from the Notice of Disallowance (ND) No. 07-22-
101 (04) dated March 14, 2007 is hereby. DENIED.13

The COA cited Section 19 of the Manual for Certificate of Settlement and Balance , which
states:

19.1.2 Public officers who certify to the necessity, legality and availability of
funds/budgetary allotments, adequacy of documents, etc. involving the
expenditure of funds or uses of government property shall be liable according to
their respective certifications.

According to the COA, it is evident that Magaso and Pacatang's participation as signatories
of Box "A" and Box "B" of the disbursement voucher is material and, significant enough to the
consummation of the transaction. Without their signature, the transaction could not have been
consummated and the funds could not have been transferred to the Municipality of Panglima
Tahil.14
 In the Notice of Finality of Decision dated 23 April 2015, the COA informed the Regional
Director of DOH-CHD that the foregoing Decision has become final and executory in the absence
of an appeal filed within the reglementary period.15

Issues

Only Magaso filed the instant Petition, raising the following issues:

I. Whether COA gravely erred in ruling that Magaso is liable for the release of P3,000,000.00 fund in
favor of Panglima Tahil Municipality;

II. Whether COA committed grave abuse of discretion amounting to excess of jurisdiction when it
denied Magaso's right to due process of law thereby making the Notice of Finality of Decision
null and void; and

III. Whether COA committed grave abuse of discretion amounting to excess of jurisdiction when it
violated the Constitutional provision requiring that decision rendered must clearly and distinctly
state the facts and law on which it is based.
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Ruling of the Court

The petition is without merit.

At the outset, Magaso alleged that she did not receive any copy of the assailed Decision.
She only learned of it when she received a copy of the Notice of Finality of Decision on 23 June
2015.16 She filed the instant Petition on 23 July 2015, or within 30 days from her receipt of the
Notice of Finality of Decision.17

It must be emphasized that a judgment becomes final and executory by operation of law.
Finality becomes a fact when the reglementary period to appeal lapses and no appeal is
perfected within such period. When a final judgment is executory, it becomes immutable and
unalterable. This doctrine of immutability is founded on considerations of public policy and sound
practice that, at the risk of occasional errors, judgments must become final at some definite point
in time.18 A related concept is the running of reglementary period to appeal, which commences
from receipt of the notice of decision.19

In this case, Magaso alleged, and it was uncontested, that she did not receive a copy of the
assailed Decision. Thus, said Decision has not yet attained finality.

Nonetheless, this Petition must still be denied even if We resolve the case on the merits.

The disallowance of the

transaction based on an
alleged violation of Section
261(w) of the Omnibus
Election Code was proper

The SAT disallowed the transaction due to alleged violation of Section 261(w) of the
Omnibus Election Code. In Guzman v. COMELEC (Guzman),20 We ruled that Section 261(w)
covers two separate and distinct acts, considering the use of the disjunctive "or" to separate
subparagraphs (a) and (b), viz.:

Section 261. xxx

 (w) Prohibition against construction of public works, delivery of materials for public works
and issuance of treasury warrants and similar devices. - During the period of forty-five days
preceding a regular election and thirty days before a special election, any person who:

(a) undertakes the construction of any public works, except for projects or works exempted in the
preceding paragraph; or

(b) issues, uses or avails of treasury warrants or any device undertaking future delivery of money,
goods or other things of value chargeable against public funds.

Consequently, in determining if the legal provision was violated, it is immaterial whether or

not the subject treasury warrant in Guzman was intended for public works.21 Moreover,
in People v. Ting,22 We identified the elements of Section 261(w)(b) as follows:

(1) any person issues, uses or avails of treasury warrants or any device forty-five
days preceding a regular election or thirty days before a special election; (2) the
warrant or device undertakes the future delivery of money, goods or other things
of value; and (3) the undertaking is chargeable against public funds.23 (Italics
supplied.)

Corollary thereto, it is not necessary that the "device undertaking future delivery of money,
goods or other things of value chargeable against public funds" is related to any construction of
public works or delivery of materials for public works.

Here, the device in question is Check No. 70241 dated 07 May 2004, which was released to
the Municipality of Panglima Tahil c/o Mayor Burahan during the 2004 election period.

Unless the Manual on the New Government Accounting System (NGAS) for LGUs,24 which
was in force at the time of the disbursement in 2004, as well as the present Government
Accounting Manual (GAM) for LGUs,25 a disbursement voucher must be prepared to facilitate
payment of money claim. Once the disbursement voucher has been duly accomplished, the
claimant or his/her authorized representative will be issued either cash or check.26 A check is a
bill of exchange drawn on a bank payable on demand.27 Thus, for ail intents and purposes,
Check No. 70241 is a device undertaking future delivery of money which is chargeable against
public funds.

Verily, the COA correctly invoked Section 261(w) of the Omnibus Election Code as basis of
its disallowance.

The COA did not commit

grave abuse of discretion
when it affirmed Magaso's
accountability in the
disallowed transaction

Magaso insists that she should be excluded from liability considering that she merely relied
on the representations of Mayor Burahan that the Municipality of Panglima Tahil complied with
COMELEC Resolution No. 6634 and her participation is limited only to her certification in Box "B"
of the disbursement voucher.

We are not persuaded.

COA Circular No. 92-389 dated 03 November 1992 states:

3. Document Checklist at the Back of the Voucher

 The checklist at the back of the voucher enumerates the mandatory minimum supporting
documents for the selected transactions.

It should be clear, however, that the submission of the supporting documents enumerated
under each type of transaction does not preclude reasonable questions on the funding, legality,
regularity, necessity or economy of the expenditure or transaction. Such questions may be raised
by any of the signatories to the voucher.

The demand for additional documents or equivalents should be in writing. A blank space is
provided for additional requirements, if any, and if authorized by any law or regulation. If the
space is insufficient, separate heck may be used and attached to the voucher. (Emphasis
supplied.)

The foregoing reveals that the signatories in a disbursement voucher may raise questions
and demand additional documents, if necessary. Clearly, therefore, the certifiers and approvers
are expected to review the documents and not merely sign perfunctorily.

Here, as admitted by Magaso, she certified that the "[s]upporting documents [are] complete
and proper and cash were available."28 By certifying the propriety of the supporting documents
of the disbursement voucher, Magaso attests to its entirety, which necessarily includes
compliance with existing laws.

The surrounding circumstances should have raised Magaso's suspicion, i.e., the timing of the
disbursement during the 2004 election period and the instruction that the check be issued c/o
Mayor Burahan. Instead of her blind reliance, Magaso should have indicated her questions or
concerns in the disbursement voucher or required the submission of additional documents.
Records are bereft of any showing that she did so.

Magaso erroneously invokes Buscaino v. COA (Buscaino).29 In ruling that the Chief
Financial Management Officer was not liable for the disallowed amount, We considered in said
case that he could not have questioned the grant of housing allowance as his task was just to
certify that the disbursement was properly supported by the Resolution of the Board of
Trustees.30

However, it may be noted that the disbursement voucher discussed in Buscaino was Form
No. 5A, Rev. 1981, wherein the accounting officer only certify that the transaction
has: (1) adequate available funds; (2) expenditure properly certified; (3)supported by documents
appearing legal and proper; and (4) account codes proper.31 Based on these certifications, it is
sufficient that the documents appear legal and proper. Hence, in Buscaino, We held that "[a]s
accounting officer, petitioner's duty was merely to sign the vouchers for the disbursement of the
funds therefor."32

It is worth highlighting that the required certification for accounting officers has since been
amended. COA Circular No. 92-389 dated 03 November 1992 states that one of the objectives of
the revisions in the disbursement voucher is to make it more effective and responsive to the
requirements of Republic Act No. (RA) 6713, or the Code of Conduct and Ethical Standards for
Public Officials and Employees, and RA 7160, or the Local Government Code of 1991. At
present, similar to Magaso's case, accounting officers are required to attest that the supporting
documents are in fact complete and proper, as opposed to "appearing legal and proper."

In Umipig v. People,33 We denied the chief accountant's claim that her duty in certifying Box
"B" of a disbursement voucher is merely ministerial.

We took into account that she was not precluded from raising questions on the legality or
regularity of the transaction involved. We further stressed the nature of her responsibilities as an
accountable officer, to wit:
 Accountable. (a) Having responsibility or liability for cash or other property held in trust or
under some other relationship with another. (b) [government accounting] Personally liable for
improper payments; said of a certifying or disbursing officer. (c) Requiring entry on the
books of account; said of a transaction not yet recorded, often with reference to its timing. (d)
Responsible.

Accountable office. An officer who, by reason of the duties of his office, is accountable for
public funds or property.34

The presumption of good faith fails when an explicit law, rule or regulation has been violated,
as in this case.35 The palpable disregard of laws and applicable directives amounts to gross
negligence.36

The COA did not violate

Magaso's Constitutional
right to due process and
right be informed of the
facts and law upon which
the ruling against her is
based

Magaso raised for the first time that she believes that her right to due process was violated
when the other signatories to the disbursement voucher were not duly notified of the
disallowance37 She also argues the decision of the COA did not exhaustively resolve the merits
of her case, in violation of Section 14, Article VIII of the Constitution.38

We are not convinced.

On the alleged failure of the COA to notify the other signatories to the disbursement voucher
of the notice of disallowance, We observed that this was not denied in the Comment by the COA
through its counsel, the Office of the Solicitor General.39 Be that as it may, Magaso is not the
proper party to raise the due process violation on the part of the other signatories found liable
under the Notice of Disallowance. Even assuming that the other signatories were not informed of
the disallowance, she need not depend on their arguments because her accountability is based
on her actual participation. Since she certified that the supporting documents to the disbursement
voucher are complete and proper, she should be aware of the factual and legal basis of her
certification.
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At any rate, it is well-settled that their civil liability is solidary under Sections 43 of the
Administrative Code of 1987. Their solidary liability for amounts they may" or may not have
received is justified considering that the payees would not have received the disallowed amounts
if it were not for the officers irregular discharge of their duties.40

As regards the alleged violation of Section 14, Article VIII of the Constitution, in Yao v.
CA, We stressed that "[t]he parties to a litigation should be informed of how it was decided, with
an explanation of the factual and legal reasons that led to the conclusions of the court,"41 viz:

Faithful adherence to the requirements of Section 14, Article VIII of the

Constitution is indisputably a paramount component of due process a fair, play. It
is likewise demanded by the due process clause of the Constitution. The parties
to a litigation should be informed of how it was decided, with an explanation of
the factual and legal reasons that led to the conclusions of the court. The court
cannot simply say that judgment is rendered in favor of X and against Y and just
leave it at that without any justification whatsoever for its action. The losing party
is entitled to know why he lost, so be may appeal to the higher court, if permitted,
should he believe that the decision should be reversed. A decision that does not
 clearly and distinctly state the facts and the law on which it is based leaves the
parties in the dark as to how it was reached and is precisely prejudicial to the
losing party, who is unable to pinpoint the possible errors of the court for review
by a higher tribunal.42

A perusal of the assailed decision of the COA shows that it adequately covered the relevant
facts and law of the case, and thus informed the parties of how it was decided. While the
discussion of the ruling was concise, it sufficiently explained the factual and legal reasons in
affirming the Notice of Disallowance. The COA cited Section 19 of the Manual for Certificate of
Settlement and Balances and ruled that the participation of Pacatang and Magaso as the
respective signatories of Box, "A" and Box "B" of the disbursement voucher is material and
significant enough to the consummation of the transaction. Without their signatures, the
transaction could not have been consummated and the funds could not have been transferred to
the Municipality of Panglima Tahil. Notwithstanding the brevity of the decision of the COA, this
complies with the Constitutional requirement of stating clearly and distinctly the facts and law on
which a decision is based.

As a final note, Magaso explains that even if she refused to sign the disbursement voucher, it
will not ultimately stop the transaction but will only hold the project in abeyance until such time
funds will be available. Further, she raised for the first time that the advances for P3,000,000.00
appears to have been fully liquidated based on the DOH-Regional Office IX Certification dated 06
July 2015.43

Contrary to Magaso's contention, the check would not have been released if not for her
signature and certification that the supporting documents are complete and proper. Moreover, if
the transaction was completed after the 2004 election period, there is no election offense to
begin with. Whether or not the amount has been fully liquidated is immaterial since this should
not have been spent in the first place. At any event, there is nothing in the DOH-Regional Office
IX Certification that clearly shows that it pertains to the same disallowed transaction in this case.
Consistent with Our ruling in People v. Ting, for as long as the device is issued, used, or availed
of within the prohibited period to undertake the future delivery of money chargeable against
public funds, an election offense is committed.44 Thus, the violation of Section 261 (w)(b) was
committed upon the issuance of Check No. 70241 to Mayor Burahan. Accordingly, the
responsible officers who made this possible should be held accountable.

Indeed, the Constitution vests the broadest latitude in the COA in discharging its role as the
guardian of public funds and properties. In recognition of such constitutional empowerment, the
Court has generally sustained the COA's decisions or resolutions in deference to its expertise in
the implementation of the laws it has been entrusted to enforce. Thus the Constitution and the
Rules of Court provide the remedy of a petition for certiorari in order to restrict the scope of
inquiry to errors of jurisdiction or to grave abuse of discretion amounting to lack or excess of
jurisdiction Committed by the COA. For this purpose, grave abuse of discretion means that there
is, on the part of the COA, an evasion of a positive duty or a virtual refusal to perform a duty
enjoined by law or to act in contemplation of law, such as when the assailed decision or
resolution rendered is not based on law and the evidence but on caprice, whim and
despotism.45 In this case, Magaso failed to show that the COA gravely abused its discretion.

WHEREFORE, in view of the foregoing, the present Petition is hereby DENIED. The
Decision of the Commission on Audit in Legal Services Sector No. 2009-163 dated 31 March
2009 is hereby AFFIRMED.

SO ORDERED.