Republic of the Philippines

COMMISSION ON AUDIT
Commonwealth Avenue, Quezon City

CRISTINA B. BALANON, CRISTY

M. BANGUG, NOEMI M.
BOADO, RINAROSE BUDENG,
RODRIGO BUSTILLO, REMALYN
Q. CASEM, MARY ANN C.
CORPUZ, DARWIN T. GALLETA,
FELY ROSE B. MANAOIS,
EUNICE A. PALOMO, EMMALOU
PIMENTEL, ALLIVER B.
SAPITULA, NESTOR SORIANO,
MARK KRISTIAN C. LEDDA,
ARNOLD C. LICAYAN, ZHELLA
ANNE V. NISPEROS, SHEENA I. Case No. _______________
SAPUAY, PAULITO C.
NISPEROS, RAJEINDER JAIN D.
LUMILAN, PERLA S. GARCIA
and LEONILA A. CARREON,
Petitioners,

- versus -

HON. MICHAEL R. BACANI, in

his capacity as COA REGIONAL
DIRECTOR,
Respondent.
x---------------------------x

 
PETITION FOR REVIEW


PETITIONERS unto this Honorable Office respectfully aver:

STATEMENT OF THE CASE

This is a petition for review of the Decision with number 2019-045 of
Hon. MICHAEL R. BACANI, Regional Director of the Regional Office 1 of
the Honorable Commission. The dispositive portion of RO I Decision No.
2019-100 dated April 2, 2019 reads:
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Petition for Review
Page 1 of 10
 WHEREFORE, all premises considered, the herein appeal
of Cristina B. Baliton et al, all of Don Mariano Marcos Memorial
State University (DMMMSU) - Mid-La Union Campus is
hereby DENIED. Accordingly, Notice of Disallowance (ND)
Nos. 18-005-101-(17) dated May 16, 2018 on the payment of
Collective Negotiation Agreement (CNA) Incentives to scholar
grantees on study leave in the amount of P370,833.33, is hereby
AFFIRMED.

Copy of the aforementioned Decision is hereto attached as Annex “A” for

reference and to form part of this petition.

The questioned ND was received by petitioners last May 21, 2018.

Aggrieved by the NDs, petitioners appealed these disallowances. The
appeal was received by Regional Office No. I of the Honorable
Commission last July 5, 2018. It tolled the running of the prescriptive
period for appeal pursuant to Section 4 of Rule V of the 2009 Revised Rules
of Procedure of the Commission on Audit. Subsequently thereafter, the
Regional Director, respondent in this case, denied the appeal of petitioners
in his aforementioned decision. Said decision was received by petitioners
last April 15, 2019.

The petitioners have a period of six (6) months to appeal the said
disallowance before it becomes final and executory. Hence, the submission
of this petition is within the period provided for by said rule.

PARTIES
Petitioners are all employees of Don Mariano Marcos Memorial State
University (DMMMSU) at its Mid-La Union Campus located at Brgy.
Catbangen, San Fernando City, La Union. Appellants CRISTINA B.
BALANON, CRISTY M. BANGUG, NOEMI M. BOADO, RINAROSE
BUDENG, RODRIGO BUSTILLO, REMALYN Q. CASEM, MARY ANN
C. CORPUZ, DARWIN T. GALLETA, FELY ROSE B. MANAOIS,
EUNICE A. PALOMO, EMMALOU PIMENTEL, ALLIVER B.
SAPITULA, NESTOR SORIANO, MARK KRISTIAN C. LEDDA,
ARNOLD C. LICAYAN, ZHELLA ANNE V. NISPEROS, SHEENA I.
SAPUAY are all faculty members assigned at different colleges of the Mid-
La Union Campus. Petitioner PAULITO C. NISPEROS is the Campus
Chancellor then at the time the ND was issued, petitioner RAJEINDER
JAIN D. LUMILIAN is the Finance Head, petitioner LEONILA A.
CARREON is the Internal Auditor (OIC), and petitioner PERLA S. GARC
IA is the Head for Administrative Services. All appellants can be served

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Petition for Review
Page 2 of 10
with summons, notices, orders and other processes of the Honorable Office
at their place of employment above-stated.

Respondent MICHAEL R. BACANI, on the other hand, is the

Regional Director of the Regional Office of the Honorable Commission
who issued the herein assailed decision. His principal office address is
situated at Government Center, Sevilla, San Fernando City, La Union.

STATEMENT OF FACTS
Petitioners are adopting the same statement of facts as narrated in
their appeal filed with the Respondent, to wit:

It has been a tradition of DMMMSU to give CNA

incentives to its employees. This is pursuant to the CNA
between DMMMSU and its accredited personnel organizations
(teaching and non-teaching) and existing budget circulars of the
Department of Budget and Management (DBM). It is usually
given at the end of the year sourced out from the savings of
DMMMSU’s budget specifically that savings from the
Maintenance and Other Operating Expenses (MOOE) portion
of the University’s budget.

Last year, 2017, DMMMSU has apportioned an amount of

Php25,000.00 for each employee including appellants herein.
This is pursuant to a board resolution issued by the Board of
Regents of DMMMSU. Copy of the board resolution is hereto
attached as Annex “B” for reference and to form part of this
appeal. With that, the necessary documentary requirements for
the release of said incentive were prepared. Consistent with
previous practice, the Finance Department prepared the payroll
for the CNA incentive covering all employees of the Mid-La
Union Campus entitled to receive the same including the
appellants. Its Head, Appellant Rajeinder Jain D. Lumilan,
certified that supporting documents were complete and
amount claimed proper while the Head for Admin Services,
Appellant Perla S. Garcia, certified that the services has been
rendered. Appellant Leonila A. Carreon, on the other hand,
verified and found the transaction in order thereby allowing
payment. The Chancellor, Appellant Paulito C. Nisperos,
approved payment of the said incentive, hence, the incentive
was released and received by qualified Mid-La Union Campus
employees including all appellants last December 20, 2017.

--
Petition for Review
Page 3 of 10
 To the surprise of all appellants, State Auditor ELMA L.
MAXIMO issued a Notice of Disallowance covering the
entitlement of appellants faculty members to the CNA
incentive. State Auditor Maximo disallowed the entire amount
of Php25,000.00 for 12 faculty members. She also forwarded the
conclusion that five (5) faculty members should have not
received the full amount of Php25,000.00. Her reasoning is that
these 12 faculty members have not rendered full time service
during the year when the incentive was granted while the other
five (5) faculty members, the amount received by them should
be reduced in proportion to number of months actually
rendered. All appellant faculty members were scholarship
grantees pursuing professional or career advancement, hence,
on study leave. 12 appellant faculty members were on leave for
the entire year duration of 2017 while the other five (5) reported
to work within 2017 because their study leave ended.

Feeling aggrieved by this disallowance, appellants deems

it best to seek for a reversal of the findings of State Auditor
ELMA L. MAXIMO. It is the humble capitulation of appellants
that said verdict is misplaced, hence, the submission of this
appeal.

Last April 15, 2019, petitioners received the decision of their appeal.
Respondent denied their appeal, hence, this Petition for Review.

ISSUE
WHETHER OR NOT RESPONDENT IS CORRECT IN AFFIRMING THE
NOTICES OF DISALLOWANCE AGAINST PETITIONERS.

ARGUMENTS AND DISCUSSION

The denial of petitioners’ appeal is anchored on the proposition that
petitioners, grantees of the CNA, did not contribute to the accomplishment
of DMMMSU’s performance targets. The reasoning is that the petitioners
who are grantees of the questioned incentive were not physically present
since they are on study leave to be able to contribute to the agency’s
performance targets. They were not able to contribute to the cost-cutting

--
Petition for Review
Page 4 of 10
measures and system improvement of the agency that redounded to actual
savings on the part of the agency where the said incentive was sourced out.

With due respect to the respondent, his circumspect evaluation of

facts and circumstances on the matter may have seem to be confined and
irrational.

We will not argue on the legal basis laid down by the respondent on
the grant of the questioned incentive. Indeed, they have been the core
guide of DMMMSU in the grant of the questioned incentive to each of its
hardworking and committed employees both teaching and non-teaching
personnel. But to restrict the grant of the same to petitioners without any
express prohibition provided for by law is beyond acceptance.

It may have escape the realization of respondent that the cost-cutting

measures and system improvements which have been the basis of the grant
of CNA by government agencies to its employees is only a way or system
of management to be able to source out funds to finance the grant of this
incentive as there is no specific item for the same in the General
Appropriations Act. It simply specious to say without any basis that only
those who have contributed to these savings would have to be benefitted.

DBM Budget Circular No. 2017-3 dated November 16, 2017 providing
for the guidelines of the grant of the CNA incentive for fiscal year 2017 is
very clear on this matter.1 The exact provision states:

The CNA Incentive may be given equally to all qualified

employees under item 3.0 hereof or at varying rates in
consideration of the employee's or his/her office's
contribution to the accomplishment of performance targets,
efficiency, productivity, or profitability, as determined by the
agency head upon recommendation of the Employees'
Organization- Management Consultative Committee.2
(Emphasis supplied)

The grant of the questioned incentive is based on the contribution of the

employee to the accomplishment of the agency’s performance targets,
efficiency, productivity, or profitability and not his contribution to the
attainment of savings for the agency from where the fund will be sourced
out to finance this incentive. Again, as pointed out in the appeal of
petitioners, personnel who are not physically present may still contribute
to the attainment of the agency’s performance targets as in the case of
petitioners-grantees. This has been aptly discussed in the appeal but the
respondent chose to ignore it. Petitioners are adopting the same arguments
1
DBM Budget Circular No. 2017-3, November 16, 2017.
2
Id., Section 4.2.2.
--
Petition for Review
Page 5 of 10
for purposes of this petition. By way of incorporation and reference, the
appeal is hereto attached as Annex “B” to form part of this petition.

Lastly, jurisprudence is replete and consistent in its declaration that

in cases involving the disallowance of salaries, emoluments, benefits, and
allowances due to government employees, recipients or payees in good
faith need not refund these disallowed amounts. 3 For as long as there is no
showing of ill intent and the disbursement was made in good faith, public
officers and employees who receive subsequently disallowed benefits or
allowances may keep the amounts disbursed to them.4 (Emphasis and
underscoring supplied)

On the part of the approving officers, they shall only be required to

refund if they are found to have acted in bad faith or were grossly
negligent amounting to bad faith.5

The Supreme Court speaking through Justice Leonen in DAP vs.

Pulido-Tan et. al.,6citing Philippine Economic Zone Authoriry vs. COA7 defined
“good faith” in the context of disallowed benefits or allowances as:

In common usage, the term ‘good faith’ is ordinarily used to describe

that state of mind denoting “honesty of intention, and freedom from
knowledge of circumstances which ought to put the holder upon
inquiry; an honest intention to abstain from taking any
unconscientious advantage of another, even through technicalities of
law, together with absence of all information, notice, or benefit or
belief of facts which render transaction unconscientious.”

With the above cited rules, the receipt of the questioned incentive by
appellant faculty members cannot be said to have malice or that they acted
in bad faith considering that their participation in the disallowed benefit is
only to receive the incentive. Appellant faculty members honestly believe
that even if they are out on study leave and have not reported for work
because of their pursuit of higher learning, they are still entitled to receive
the Php25,000.00 in full as it is not their attendance that is the basis of the
said grant. As provided for in the budget circular, the basis in granting the
CNA incentive is the employee’s contribution to the agency’s
accomplishment of its performance targets, efficiency, productivity, or
profitability. As articulated above, it is their humble submission that they

3
DAP vs. Pulido-Tan et. al., G.R. No. 203072, October 18, 2016 citing Manila International Airport Authority v.
Commission on Audit, 681 Phil. 644, 668-670 (2012) and Benguet State University v. Commission on Audit, 551 Phil.
878, 888 (2007).
4
Id. citing J. Brion, Concun-ing and Dissenting Opinion in Technical Education and Skills Development Authority
v. Commission on Audit, G.R. No. 204869, March 11, 2014, 718 SCRA 402, 449.
5
Id.
6
Id.
7
690 Phil. 104 (2012).
--
Petition for Review
Page 6 of 10
indeed have contributed even if they did not physically report for work in
2017. This is consistent with the ruling of the Supreme Court in Blaquera vs
Alcala8 and Bayabay Water District vs. COA9 where petitioners in the said
cases received the allowances and bonuses in good faith under the honest
belief that there is legal basis authorizing such payment.

Similarly with the approving officers, the other appellants herein,

they cannot also be said to have acted in bad faith nor were grossly
negligent amounting to bad faith considering that the award of CNA
Incentive to all qualified employees of DMMMSU has never been
questioned since its inception. This coupled with the honest belief that the
appellant faculty members are indeed entitled because appellant faculty
members have contributed to the agency’s accomplishment of its
performance targets, efficiency, productivity, or profitability as elucidated
above. So, even if the disallowance would be upheld, the other appellants,
by jurisprudence, are relieved of any personal liability to refund the
disallowed amount.

PRAYER
WHEREFORE, with the above articulated arguments, it is
respectfully prayed of this Honorable Office to SET ASIDE the ROI I
Decision No. 2019-045 dated April 2, 2019 and absolve petitioners from any
liability arising from the questioned disallowances.

Other just and equitable reliefs under the premises are likewise
prayed for.

RESPECTFULLY SUBMITTED this ______________ at San Fernando

City, La Union, Philippines.

CRISTINA B. BALANON CRISTY M. BANGUG

Petitioner Petitioner

NOEMI M. BOADO RINAROSE BUDENG

Petitioner Petitioner

RODRIGO BUSTILLO REMALYN Q. CASEM

Petitioner Petitioner
8
356 Phil. 678 (1998).
9
425 Phil. 326 (2002).
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Petition for Review
Page 7 of 10
 MARY ANN C. CORPUZ DARWIN T. GALLETA
Petitioner Petitioner

FELY ROSE B. MANAOIS EUNICE A. PALOMO

Petitioner Petitioner

EMMALOU PIMENTEL ALLIVER B. SAPITULA

Petitioner Petitioner

NESTOR SORIANO MARK KRISTIAN C. LEDDA

Petitioner Petitioner

ARNOLD C. LICAYAN ZHELLA ANNE V. NISPEROS

Petitioner Petitioner

SHEENA I. SAPUAY PERLA S. GARCIA

Petitioner Petitioner

RAJEINDER JAIN D. LUMILAN LEONILA A. CARREON

Petitioner Petitioner

PAULITO C. NISPEROS
Petitioner

Republic of the Philippines)

Province of La Union ) S.S
City of San Fernando )

VERIFICATION AND CERTIFICATION

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Petition for Review
Page 8 of 10
 We, CRISTINA B. BALANON, CRISTY M. BANGUG, NOEMI M.
BOADO, RINAROSE BUDENG, RODRIGO BUSTILLO, REMALYN Q.
CASEM, MARY ANN C. CORPUZ, DARWIN T. GALLETA, FELY ROSE
B. MANAOIS, EUNICE A. PALOMO, EMMALOU PIMENTEL,
ALLIVER B. SAPITULA, NESTOR SORIANO, MARK KRISTIAN C.
LEDDA, ARNOLD C. LICAYAN, ZHELLA ANNE V. NISPEROS,
SHEENA I. SAPUAY, PAULITO C. NISPEROS, RAJEINDER JAIN D.
LUMILAN, PERLA S. GARCIA and LEONILA A. CARREON, all of legal
age, Filipinos, and with principal office address at DMMMSU Mid-La
Union Campus, Brgy. Catbangen, San Fernando City, La Union, after
having been duly sworn to in accordance with law, do hereby depose and
state that:

1. We have caused the preparation of the foregoing Appeal

Memorandum, the contents of which are supplied by us and are all
true and correct upon our personal knowledge, information and
belief, the allegations therein are true and correct and were based on
authentic documents at hand;

2. That we further certify that: (a) we have not theretofore commenced

any other action or proceeding or filed any claim involving the same
issues or matter in any court, tribunal, or quasi-judicial agency and,
to the best of our knowledge, no such action or proceeding is
pending therein; (c) if we should thereafter learn that the same or
similar action or proceeding has been filed or is pending before the
Supreme Court, the Court of Appeals, or any other tribunal or quasi-
judicial agency, we undertake to report such fact within five (5) days
therefrom to the court or agency wherein the original pleading and
sworn certification contemplated herein have been filed.

IN WITNESS WHEREOF, we have hereunto set my hand this

_________________ in San Fernando City, La Union, Philippines.

CRISTINA B. BALANON CRISTY M. BANGUG

Petitioner Petitioner

NOEMI M. BOADO RINAROSE BUDENG

Petitioner Petitioner

RODRIGO BUSTILLO REMALYN Q. CASEM

Petitioner Petitioner

MARY ANN C. CORPUZ DARWIN T. GALLETA

Petitioner Petitioner

FELY ROSE B. MANAOIS EUNICE A. PALOMO

--
Petition for Review
Page 9 of 10
 Petitioner Petitioner

EMMALOU PIMENTEL ALLIVER B. SAPITULA

Petitioner Petitioner

NESTOR SORIANO MARK KRISTIAN C. LEDDA

Petitioner Petitioner

ARNOLD C. LICAYAN ZHELLA ANNE V. NISPEROS

Petitioner Petitioner

SHEENA I. SAPUAY PERLA S. GARCIA

Petitioner Petitioner

RAJEINDER JAIN D. LUMILAN LEONILA A. CARREON

Petitioner Petitioner

PAULITO C. NISPEROS
Petitioner

SUBSCRIBED AND SWORN to before this _________________ at

San Fernando City, La Union, Philippines.

Copy furnished

HON. MICHAEL R. BACANI

Regional Director, COA Regional Office No. I
Government Center, Sevilla
San Fernando City, La Union

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Petition for Review
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