National Transmission Corp. v. COA

Facts: Petitioner TransCo is a government instrumentality created under EPIRA Law, operating and managing the power transmission system that links power plants to electric distribution utilities nationwide. Its concession was awarded to the NGCP. 

Agulto was a regular employee of Petitioner received his separation benefits (P656,597.50) pursuant to the petitioner’s Early Separation Program. During post-audit, Supervising Auditor issued a Notice of Disallowance disallowing the amount of P22,965.81 from Agulto's separation benefits as said amount pertained to the period during which Agulto's employment status was still contractual. Petitioner appealed before the COA Director arguing that the payment of separation benefits to contractual employees was lawful as it was in accordance with the EPIRA Law, the Corporation Code, and the Board Resolutions of petitioner. COA Director partially granted the appeal  by exempting Agulto from liability since he received his separation benefits in good faith. COA Chairperson disapproved the decision of COA Director.

Issue: Whether COA-CP committed grave abuse of discretion in disallowing a portion of Agulto’s separation benefits and in finding him and the members of petitioner TransCo's Board of Directors solidarily liable.

Held: In this case, since there was no proof that Agulto's appointment was duly approved or attested to by the CSC, the disallowance of the amount of P22,965.81 was valid and proper. Thus, the Court finds no grave abuse of discretion on the part of respondent COA-CP is sustaining the disallowance.

The disallowed amount, however, need not be refunded by the members of petitioner TransCo's Board of Directors as well as by Agulto, following the ruling of the Court in National Transmission Corporation -

The Court, nevertheless, finds that TransCo and Miranda be excused from refunding the disallowed amount notwithstanding the propriety of the ND in question. In view of TransCo's reliance on Lopez, which the Court now abandons, the Court grants TransCo's petition pro hac vice and absolved it from any liability in refunding the disallowed amount.

On another note, even if the ND is to be upheld, Miranda should not be solidarily liable to refund the same. In Silang v. COA, the Court had ruled that passive recipients of the disallowed disbursements who acted in good faith, are absolved from refunding the same. x x x