The Supreme Court (SC) unanimously affirmed the Commission on Audit (COA) ruling, which declared as illegal the 2008 car plan scheme implemented by the Philippine Rice Research Institute (PhilRice) to entice its officials and employees to stay in the agency.
However, the Court en banc found the officials of PhilRice not liable to refund the government in the amount of P10.15 million representing the expenses incurred during the implementation of the car plan program.
The said amount was the subject of 26 notices of disallowance (ND) issued by the COA in 2013.
The SC held that the officials acted in good faith in allowing the release of government funds for the procurement and use of the vehicles under the scheme.
“Here, while petitioners approved and authorized the payment of government funds in violation of Section 12 of RA No. 6758 [Compensation and Position Classification Act of 1989], nevertheless, the exceptional circumstances surrounding the case…tenaciously show they acted in good faith and were solely propelled by a valid and genuine cause—the prevention of ‘brain drain’ within the institute through a more cost-effective approach,” the SC said in a decision penned by Associate Justice Japar Dimaampao.
The petitioners in the case are Sophia T. Borja, Ma. Ethel P. Gibe, Mary Grace DG. Corpuz, Joy T. Agudia, Aurea C. Cosio, Wilfredo B. Collado, Myrna D. Malabayabas, Evelyn F. Javier, Eduardo Jimmy P. Quilang, Rizal G. Corales, Renato B. Bajit, Manuel Jose C. Regalado, Glenda DC. Ravelo, Leo C. Javier, Caesar Joventino M. Tado, Rhemilyn Z. Relado and Babylinda 0. Reyes.
The petitioners were signatories to the vouchers approving the release of the disallowed amounts, with petitioner Borja as one of the car owners.
“Thusly, petitioners, in their capacity as approving/certifying officers, are likewise excused from liability under Rule 2 of the Madera rules,” it added.
In determining petitioners’ liability to return the disallowed amounts, the SC said it is guided by its landmark ruling in the case of Madera v. Commission on Audit.
In the said ruling, the SC held that if a notice of disallowance is upheld, the “approving and certifying officers who acted in good faith in regular performance of official functions and with the diligence of a good father of the family are not civilly liable to return consistent with Section 38 of the Administrative Code of 1987.”
The SC said the purpose of the car plan scheme was to keep the brilliant and exceptional officials and employees of PhilRice from seeking greener pastures outside the agency.
Likewise, the SC noted that the operations of PhilRice as a research and development institution, entailed countless of land travels, which necessitated the costs, such purchase price of vehicle, fuel, oil, maintenance expenses and comprehensive insurance premiums.
In point of fact, based on a cost benefit analysis, PhilRice could save around P6.00 to P 7.00 per kilometer in rented vehicles rather than owning and maintaining vehicles.
Records also further showed, according to the SC, the petitioners observed the strict guidelines mandated by PhilRice in the car rental plan.
The car plan scheme operated as a rental plan under which qualified officials and employees procured vehicles of their choice through the financing scheme of the Philippine National Bank (PNB) for a period of three years, payable on a monthly installment basis.
These private green-plated vehicles were then mortgaged to the PNB until full settlement of the obligation.
Thereafter, the vehicles were rented out to PhilRice for use in the operations in its central station located in the Science City of Muñoz and other branches/stations around the country.
The rental payments were used to pay for the private vehicles.
The petitioners maintained that the car rental plan was guided by Opinion No. 121, Series of 1988 issued by the Office of the Government Corporate Counsel (OGCC).
Following an audit conducted in 2013, the COA issued NDs issued for “expenses incurred during the trips made using rented private vehicles under the car plan.”
The COA said the car plan scheme was not approved by the President as required under Section 215 of Presidential Decree (P.D.) No. 98 and that it contravened the required austerity measures of the government.
It further ruled that the scheme was not included in the exemption of standardized salary under Republic Act (RA) 6758.
It added that the rental of the vehicles did not conform with Section 7 of RA 6713, which prohibits public officers and employees from having any interest in any transaction requiring the approval of their office and Section 8, Article IX-B of the Constitution which prohibits additional or double compensation.