G.R. Nos. 145383-84

EN BANC

G.R. Nos. 145383-84. August 6, 2003.

ATTY. RUDY M. VILLARE A, petitioner, vs. THE COMMISSION ON AUDIT, respondent.

Jose P. Icaonapo for petitioner.

The Solicitor General for respondent.

SYNOPSIS

The Commission on Audit (COA) found petitioner State Auditor, and later City Auditor of Marikina guilty of neglect of duty, simple misconduct and violation of reasonable office rules and regulations for receiving allowances and benefits granted to COA personnel assigned to Marikina City, which included him, in violation of Section 18 of EaISTD

In affirming the decision of the COA, the Supreme Court ruled that implied repeals are not lightly presumed. In case of conflict between

SYLLABUS

1. STATUTORY CONSTRUCTION; INTERPRETATION OF STATUTES; IN CASE OF CONFLICT BETWEEN TWO LAWS, THE PROPER ACTION IS TO GIVE EFFECT TO BOTH, IF POSSIBLE, BY HARMONIZING THE TWO; CASE AT BAR. Implied repeals are not lightly presumed. The rule is that instead of placing one law against another, in a destructive confrontation, courts must exert every effort to reconcile the statutes. Accordingly, in case of a conflict between

2. CONSTITUTIONAL LAW; BILL OF RIGHTS; EQUAL PROTECTION CLAUSE; DOES NOT PRECLUDE CLASSIFICATION OF INDIVIDUALS WHO MAY BE ACCORDED DIFFERENT TREATMENT UNDER THE LAW AS LONG AS CLASSIFICATION IS REASONABLE; CASE AT BAR. Petitioner ignores the well-accepted meaning of the equal protection clause. This clause does not preclude classification of individuals who may be accorded different treatment under the law as long as the classification is reasonable and not arbitrary. Indeed, there are valid reasons to treat COA officials differently from other national government officials. The primary function of an auditor is to prevent irregular, unnecessary, excessive or extravagant expenditures of government funds. To be able properly to perform their constitutional mandate, COA officials need to be insulated from unwarranted influences, so that they can act with independence and integrity. As extensively discussed in Tejada v. Domingo, the prohibition under Section 18 of

D E C I S I O N

AZCUNA, J p:

Petitioner was found guilty by the Commission on Audit (COA) of neglect of duty, simple misconduct and violation of reasonable office rules and regulations. To challenge this decision, he filed the instant consolidated Special Civil Actions for Certiorari and Prohibition.

The facts of the case are not contested. Petitioner, Atty. Rudy M. Villare a, is a State Auditor IV of the COA and assumed the position of Auditor of Marikina on December 1, 1994. He later became City Auditor when Marikina became a city on December 6, 1996. Pursuant to

In line with COA Assignment Orders No. 97-006 and No. 97-051, a Special Audit Team was constituted by the COA to conduct an examination of the cash and accounts of the City Treasurer of Marikina, as well as to audit selected financial transactions of the city. In the course of the examination and audit, the Special Audit Team learned of the allowances given to COA personnel by the City of Marikina and it declared these to have been received in violation of Section 18 of

Section 18 of

SECTION 18. Additional Compensation of Commission on Audit Personnel and of Other Agencies. In order to preserve the independence and integrity of the Commission on Audit (COA), its officials and employees are prohibited from receiving salaries, honoraria, bonuses, allowances or other emoluments from any government entity, local government unit, and government-owned and controlled corporations, and government financial institution, except those compensation paid directly by the COA out of its appropriations and contributions. ITAaHc

Government entities, including government-owned or controlled corporations including financial institutions and local government units are hereby prohibited from assessing or billing other government entities, government-owned or controlled corporations including financial institutions or local government units for services rendered by its officials and employees as part of their regular functions for purposes of paying additional compensation to said officials and employees.

COA Memorandum No. 89-584 states the following:

. . . To ensure the rationality in the payment and receipt of allowances and other forms of fringe benefits by auditing personnel, it is hereby directed that effective January 2, 1989, the receipt of all forms of additional benefits, honorarium, allowances or other forms of compensation by auditing personnel of such allowances and other fringe benefits shall be considered illegal, and shall subject the employee concerned to administrative disciplinary action.

Lastly, the pertinent portion of COA Chairman's Indorsement of March 23, 1995 reads as follows:

Request of Mr. Arnulf E. Lancin, City Auditor, Cagayan de Oro, for authority to collect allowances in the form of honoraria chargeable against local funds, which is denied for want of merit.

Thus, in the Special Audit Team's Confidential Report dated June 19, 1997, it was recommended that the COA personnel should be ordered to stop receiving additional fringe benefits, honoraria, allowances and other forms of compensation from the City of Marikina and to refund all those previously received. The Confidential Report further stated that under COA Memorandum No. 89-584 the COA may apply appropriate administrative sanctions to the concerned COA personnel.

On the basis of the Report, on July 15, 1997, a formal charge was initiated against petitioner for grave misconduct, gross neglect of duty, and conduct grossly prejudicial to the best interest of the service and/or violation of office rules and regulations.

In his Answer, petitioner averred that he received the benefits fully believing that Section 18 of

On August 4, 1998, COA Decision No. 98-359 was rendered finding petitioner guilty of neglect of duty, simple misconduct and violation of reasonable office rules and regulations. He was fined in an amount equivalent to four months' salary and was ordered to refund the sums he received from the City of Marikina, in the amount of P227,092.50. Within the reglementary period, petitioner moved for reconsideration of the decision. The motion was partially granted in that the fine was reduced to one month and one day's salary, but the decision was affirmed in all other respects.

Petitioner now comes to this Court seeking judicial review.

Petitioner argues that he validly received the allowances, honoraria and benefits by virtue of the ordinances enacted by the legislative council of the City of Marikina, under the authority provided for by the IcHTED

SECTION 447. Powers, Duties, Functions and Compensation. (a) The sangguniang bayan, as the legislative body of the municipality, shall enact ordinances, approve resolutions and appropriate funds for the general welfare of the municipality and its inhabitants pursuant to Section 16 of this

(1) Approve ordinances and pass resolutions necessary for an efficient and effective municipal government, and in this connection shall:

xxx xxx xxx

(xi) When the finances of the municipal government allow, provide for additional allowances and other benefits to judges, prosecutors, public elementary and high school teachers, and other national government officials stationed in or assigned to the municipality;

xxx xxx xxx

SECTION 458. Powers, Duties, Functions and Compensation. (a) The sangguniang panlungsod, as the legislative body of the city, shall enact ordinances, approve resolutions and appropriate funds for the general welfare of the city and its inhabitants pursuant to Section 16 of this

(1) Approve ordinances and pass resolutions necessary for an efficient and effective city government, and in this connection, shall:

xxx xxx xxx

(xi) When the finances of the city government allow, provide for additional allowances and other benefits to judges, prosecutors, public elementary and high school teachers, and other national government officials stationed in or assigned to the city;

xxx xxx xxx

Petitioner argues that as an employee of the COA, stationed in the City of Marikina, he falls under the phrase "other national government officials" and is thus entitled to whatever additional allowances and benefits the City of Marikina may give such officials.

With regard to the prohibitions found in

SECTION 534. Repealing Clause.

xxx xxx xxx

(f) All general and special laws, acts, city charters, decrees, executive orders, proclamations and administrative regulations, or part or parts thereof which are inconsistent with any of the provisions of this

In fine, petitioner argues that the adoption of

The Office of the Solicitor General, on the other hand, points out that

We agree with the Office of the Solicitor General.

It is significant to note that petitioner cited only paragraph (f) of the

SECTION 534. Repealing Clause. (a)

(b) Presidential Decree Nos. 684, 1191, 1508 and such other decrees, orders, instructions, memoranda and issuances related to or concerning the barangay are hereby repealed.

(d) HCIaDT

(e) The following provisions are hereby repealed or amended insofar as they are inconsistent with the provisions of this

Since

Implied repeals are not lightly presumed. The rule is that instead of placing one law against another, in a destructive confrontation, courts must exert every effort to reconcile the statutes. Accordingly, in case of a conflict between

In , a conflict arose between the

In the case at bar, the two statutes can easily be harmonized. Under the

By allocating a portion of the local budget for financial assistance to the auditing office of Marikina City, the legislative council of Marikina acted in excess of its powers under the

Petitioner next argues that Section 18 of

Indeed, there are valid reasons to treat COA officials differently from other national government officials. The primary function of an auditor is to prevent irregular, unnecessary, excessive or extravagant expenditures of government funds. To be able properly to perform their constitutional mandate, COA officials need to be insulated from unwarranted influences, so that they can act with independence and integrity. As extensively discussed in , the prohibition. under Section 18 of Constitutional provision mandating the COA to prevent or disallow irregular, unnecessary, excessive, extravagant, or unconscionable expenditures or uses of government funds and properties.

Stated otherwise, the COA personnel who have nothing to look forward to or expect from their assigned offices in terms of extra benefits, would have no reason to accord special treatment to the latter by closing their eyes to irregular or unlawful expenditures or use of funds or property, or conducting a perfunctory audit. The law realizes that such extra benefits could diminish the personnel's seriousness and dedication in the pursuit of their assigned tasks, affect their impartiality and provide a continuing temptation to ingratiate themselves to the government entity, local government unit, government-owned and controlled corporations and government financial institutions, as the case may be. In the end then, they would become ineffective auditors.

Next, petitioner alleges good faith in receiving the amounts from the City of Marikina. This argument is not relevant, considering that petitioner was found guilty of neglect of duty, simple misconduct and violation of reasonable office rules and regulations. These infractions can be committed even if the offender was in good faith.

Finally, petitioner claims he was denied due process when the Special Audit Team allegedly openly disregarded the procedures set by the Manual on Certificate of Settlement and Balances which requires them to issue to him a Notice of Disallowance. This contention is likewise untenable. During the audit no charges had yet been brought against petitioner and he was not the focus of the investigation. The audit was merely a routine procedure to conduct an examination of the cash and accounts of the City Treasurer of Marikina and to audit selected financial transactions of the city. What is important is that after the audit, petitioner was formally charged and given the opportunity to present evidence and refute the findings of the Special Audit Team.

As regards the amount to be refunded, the stated figure of P221,092.50 is inaccurate. Petitioner, on his part, claims that the annexes attached to the confidential report would add up to only P76,989.50. On the other hand, the records indicate that petitioner has custody of other vouchers, payrolls, and other documents which were not submitted during the audit, despite repeated requests to do so. According to the COA, if these vouchers and payrolls were included in the audit the amount to be refunded may increase. It appears, therefore, that the amount of P221,092.50 was derived from an incomplete audit. Hence, it is necessary to remand the case to the COA for the sole purpose of ascertaining the exact amount that petitioner must refund to the City of Marikina. ECTIHa

WHEREFORE, this Court affirms COA Decision No. 2000-266 finding petitioner guilty of neglect of duty, simple misconduct and violation of reasonable office rules and regulations and ordering him to pay a fine equivalent to one month and one day's salary, and to refund the amount he received without authority from the City of Marikina. The amount to be refunded, however, will have to be recomputed by the COA in conformity with this decision.

Cost de oficio.

SO ORDERED.

Davide, Jr., C .J ., Bellosillo, Puno, Vitug, Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio, Austria-Martinez, Corona, Carpio-Morales and Tinga, JJ ., concur.

Callejo, Sr., J ., is on leave.

Footnotes

1. COA Decisions Nos. 98 359 and 2000 266.

2. Parties' Memoranda, Rollo, pp. 100 135.

3. Annex "A" of Petition, Rollo, pp. 19 28.

4. Annex "B" of Petition, Rollo, pp. 30 31.

5. Annex "C" of Petition, Rollo, pp. 32 48.

6. Annex "D" of Petition, Rollo, pp. 49 53.

7. Annex "E" of Petition, Rollo, pp. 54 59.

8. Annex "G" of Petition, Rollo, pp. 65 66.

9. , 234 SCRA 255 (1994).

10. Ibid.

11. , 197 SCRA 52 (1991).

12. , 180 SCRA 309 (1989).

13. 205 SCRA 138 (1992).

14. Section 2(2), Article IX-D of the

15. Letter March dated 13, 2000 of Elpidia Balignasay and Letter dated February 10, 1999 of Josie Dizon-Munoz, Records Vol. I; Annex IX of Confidential Report, Records Vol. II.