EN BANC

[G.R. No. 237987. March 19, 2019.]

DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS, REGION IV-A

and GENEVIEVE E. CUARESMA, as one of the Certifying O cers at
the time of the grant of the assailed CNA Incentive , * petitioners, vs.
COMMISSION ON AUDIT , respondent.

DECISION

J.C. REYES, JR. , J : p

This is a petition for certiorari under Section 1, Rule 64 of the Rules of Court
which seeks to set aside the Decision No. 2016-377 1 dated November 10, 2016 and
the Resolution No. 2017-458 2 dated December 27, 2017 of the respondent
Commission on Audit (COA), which a rmed Decision No. 2013-29 3 dated October 21,
2013 of the COA Regional O ce No. IV-A (COA IV-A), which in turn a rmed Notice of
Disallowance (ND) No. 09-01-101-(09) dated December 14, 2009. 4

The Facts

On December 16, 2008, the Department of Public Works and Highways (DPWH),
Central O ce, through then Secretary Hermogenes E. Ebdane, Jr. (Secretary Ebdane),
issued a memorandum 5 authorizing the grant of Collective Negotiation Agreement
(CNA) Incentive to rank-and- le employees in the DPWH for calendar year 2008. The
memorandum provides, among others, that:
3. That the CNA Incentive shall be paid out of savings generated from the
Maintenance and Other Operating Expenses (MOOE), completed projects
and Engineering and Administrative Overhead (EAO) of each office (Central
O ce and Regional and District O ces), subject to the usual accounting
and auditing rules and regulations[.] 6
The memorandum was issued pursuant to Administrative Order (A.O.) No. 135,
Series of 2005 dated December 27, 2005, which con rmed the grant of CNA Incentive
to rank-and- le employees in government agencies; and Public Sector Labor-
Management Council (PSLMC) Resolution No. 04, Series of 2002, which supplied the
guidelines for the grant of CNA Incentive to rank-and- le employees in national
government agencies (NGAs), state universities and colleges (SUCs), and local
government units (LGUs).
Later, the DPWH Regional O ce No. IV-A (DPWH IV-A) released CNA Incentive
for calendar year 2008 to its employees and officers amounting to P3,915,000.00.
On January 6, 2010, DPWH IV-A received a copy of ND No. 09-01-101-(09) dated
December 14, 2009, signed by the Regional Audit Team Leader and Supervising Auditor,
both of the COA IV-A. The COA auditors explained that the CNA Incentive in the amount
of P3,915,000.00 was disallowed because it was paid out of the Engineering and
Administrative Overhead (EAO), in violation of the Department of Budget and
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 Management (DBM) Budget Circular No. 2006-1, issued on February 1, 2006, which
states that CNA Incentive shall be sourced solely from the Maintenance and Other
Operating Expenses (MOOE). CAIHTE

The COA auditors also identi ed several DPWH IV-A personnel whom they found
to be liable for the illegal payment of the subject CNA Incentive. Among those found to
be liable is herein petitioner Genevieve E. Cuaresma (Cuaresma), who was then the
Chief Accountant of DPWH IV-A and who certi ed the availability of funds,
completeness of the supporting documents, and validity of the obligation for the
payment of the subject CNA Incentive.
On May 26, 2010, DPWH IV-A Regional Director Marcelina N. Ocampo (Director
Ocampo) sent a letter, by way of an appeal, to the COA IV-A.
Ruling of COA Regional Office IV-A

In its Decision No. 2013-29 dated October 21, 2013, the COA IV-A dismissed
Director Ocampo's appeal. COA IV-A stressed that the MOOE shall be the sole source
of the CNA Incentive as expressly provided for in Budget Circular No. 2006-1; and that
only rank-and- le employees may be granted the bene t of the said incentive. Thus, it
ruled that the release of the subject CNA Incentive, charged from DPWH IV-A's EAO, to
the DPWH IV-A employees including o cers with salary grades 24 and above, was
illegal. The dispositive portion of the said decision states:
All told, the questioned Incentive may not be charged to EAO, hence, the
instant Appeal is hereby DISMISSED for lack of merit. ND No. 2009-01-101-09
is hereby AFFIRMED . 7
Unconvinced, the DPWH IV-A Employees Association, represented by its
president, Engineer Diosdado J. Villanueva (Engr. Villanueva) elevated an appeal, 8
which was treated as a petition for review, to the COA Proper.
Ruling of the COA

In its assailed Decision 9 No. 2016-377 dated November 10, 2016, the COA
denied DPWH IV-A Employees Association's petition. The COA concurred with COA IV-
A's conclusion that DPWH IV-A violated DBM Budget Circular No. 2006-1 when it paid
the CNA Incentive out of the savings from the EAO, instead of the MOOE. Further, the
COA observed that DPWH IV-A and its Employees Association failed to show any proof
of the cost-cutting measures it undertook to generate savings as required under DBM
Budget Circular No. 2006-1, PSLMC Resolution No. 4, Series of 2002, and Section 3 of
A.O. No. 135, Series of 2005. The dispositive portion of the assailed decision provides:
WHEREFORE , premises considered, the Petition for Review of Engr.
Diosdado J. Villanueva, President, Department of Public Works and Highways
(DPWH) Region IV-A Employees Association, of Commission on Audit Regional
O ce (RO) No. IV-A Decision No. 2013-29 dated October 21, 2013 is hereby
DENIED . Accordingly, Notice of Disallowance No. 2009-01-101-(09) dated
December 14, 2009 on the payment of 2008 Collective Negotiation Agreement
incentive to o cials and employees of DPWH RO No. IV-A in the total amount
of P3,915,000.00 is AFFIRMED . 1 0
DPWH IV-A Employees Association, through Engr. Villanueva, moved for
reconsideration, but the same was denied by the COA in its Resolution 1 1 No. 2017-458
dated December 27, 2017. In denying the motion for reconsideration, the COA
maintained that the CNA Incentive could not be validly sourced from the EAO. It
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 stressed that DBM Budget Circular No. 2006-1 is clear on this point. Further, it
reiterated the liability of the o cers who approved the invalid release of the CNA
Incentive as well as the o cers who certi ed the availability of funds and su ciency of
documents necessary for such release. It, however, clari ed that the o cers and
employees who were mere passive recipients of the said bene t need not refund the
amounts they received in good faith. The dispositive portion of the resolution states:
WHEREFORE , premises considered, the Motion for Reconsideration of
Engr. Diosdado J. Villanueva, President, Department of Public Works and
Highways (DPWH) Regional O ce (RO) No. IV-A Employees Association, is
hereby DENIED with FINALITY . Accordingly, Commission on Audit (COA)
Decision No. 2016-377 dated November 10, 2016, denying the Petition for
Review of COA RO No. IV-A Decision No. 2013-29 dated October 21, 2013 and
a rming Notice of Disallowance No. 09-01-101-(09) dated December 14, 2009,
on the payment of Collective Negotiation Agreement Incentive for calendar year
2008 to o cials and employees of DPWH RO No. IV-A in the total amount of
P3,915,000.00, is AFFIRMED . However, passive recipients need not refund the
bene ts they received in good faith, while the approving/certifying o cers
remain solidarily liable for the entire amount of disallowance based on the
Silang case. 1 2 DETACa

On February 28, 2018, Cuaresma received a copy of the COA Resolution No.
2017-458. Considering that she was among those found to be liable for the disallowed
incentive, Cuaresma was prompted to file this petition.

I.
WHETHER OR NOT THE GRANT OF THE CNA INCENTIVE IS VALID AND
SUPPORTED BY LAW AND OTHER PERTINENT RULES AND REGULATIONS.
II.
WHETHER OR NOT RESPONDENT COA ACTED WITH GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN DENYING
WITH FINALITY THE MOTION FOR RECONSIDERATION OF ENGR. DIOSDADO J.
VILLANUEVA AND FURTHER AFFIRMED THE DECISION NO. 2016-377 DATED
NOVEMBER 10, 2016, DENYING THE PETITION FOR REVIEW OF COA RO NO. IV-
A DECISION NO. 2013-29 DATED OCTOBER 21, 2013 AND AFFIRMING THE
NOTICE OF DISALLOWANCE NO. 09-01-101-(09) DATED DECEMBER 14, 2009,
ON THE PAYMENT OF COLLECTIVE NEGOTIATION AGREEMENT INCENTIVE
FOR CALENDAR YEAR 2008 TO OFFICIALS AND EMPLOYEES OF DPWH RO NO.
IV-A IN THE TOTAL AMOUNT OF PHP3,915,000.00.
III.
WHETHER OR NOT RESPONDENT COA ACTED WITH GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN
MODIFYING THE SAID DECISION AND DECLARING THAT PASSIVE RECIPIENTS
NEED NOT REFUND THE BENEFITS THEY RECEIVED IN GOOD FAITH, WHILE
THE APPROVING/CERTIFYING OFFICERS REMAIN SOLIDARILY LIABLE FOR
THE ENTIRE AMOUNT OF DISALLOWANCE BASED ON SILANG CASE. 1 3
Cuaresma insists that the subject CNA Incentive was validly paid out of the EAO.
She argues that payment of the CNA Incentive out of the savings from the EAO in lieu of
the MOOE is allowed under the General Appropriations Act (GAA) because MOOE and
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 EAO serve substantially the same purpose. According to her, this intent could be
gleaned from the budget deliberations of the DPWH in Congress, where the reason for
the reduction of DPWH's MOOE was discussed.
Cuaresma further argues that she should not be held liable for the amount of the
disallowance. She explains that she merely relied on the authority given by then DPWH
Secretary Ebdane, when the latter issued a memorandum stating that the CNA Incentive
may be paid out of the savings from the EAO.
Lastly, Cuaresma avers that the COA committed grave abuse of discretion
amounting to lack or in excess of jurisdiction when it disallowed the subject CNA
Incentive. She asserts that DPWH IV-A was among the o ces singled out by the COA
concerning the disallowance of the CNA Incentive. She claims that there were other
o ces which granted the CNA Incentive sourced from the savings from EAO but these
releases were allowed. Cuaresma further points out that the DPWH IV-A's CNA
Incentive for calendar year 2007, or for the previous year, was also paid out of the
savings from the EAO. Surprisingly, however, the COA did not disallow the release of
this incentive.
In its Comment 1 4 dated August 23, 2018, the COA, through the O ce of the
Solicitor General, maintains that the subject CNA Incentive was invalidly released and
paid out of the savings from the EAO. It counters that DBM Budget Circular No. 2006-1
unequivocally states that the CNA Incentive shall be sourced solely from the savings
from the MOOE and to no other fund.
As to Cuaresma's defense that she merely relied on the authority given by
Secretary Ebdane, the COA stresses that the December 16, 2008 memorandum itself
cited A.O. No. 135, Series of 2005 as its basis and even speci ed that the CNA
Incentive shall be subject to the usual accounting and auditing rules and regulations. As
such, the authority under the aforesaid memorandum must be consistently
implemented with the procedural guidelines and be subjected to the conditions
imposed under DBM Budget Circular No. 2006-1. aDSIHc

From the submissions of the parties, the issues to be resolved by the Court could
be summarized as follows: (1) whether the COA committed grave abuse of discretion
amounting to lack or in excess of jurisdiction when it disallowed the subject CNA
Incentive; and (2) whether the COA committed grave abuse of discretion amounting to
lack or in excess of jurisdiction when it adjudged certain DPWH IV-A o cers, including
Cuaresma, liable for the amount of the disallowance, while passive recipients were not
ordered to share in the liability.

The Court's Ruling

The petition is partly meritorious.

The COA did not commit any grave
abuse of discretion when it disallowed
the subject CNA incentive.

In the discharge of its constitutional mandate, the COA is endowed with enough
latitude to determine, prevent and disallow irregular, unnecessary, excessive,
extravagant, or unconscionable expenditures of government funds. It has the power to
ascertain whether public funds were utilized for the purpose for which they had been
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 intended. 1 5 The 1987 Constitution has expressly made the COA the guardian of public
funds, vesting it with broad powers over all accounts pertaining to government revenue
and expenditures and the exclusive authority to de ne the scope of its audit and
examination, establishing the techniques and methods for such review, and to
promulgate accounting and auditing rules. 1 6
The grant of CNA Incentive in favor of the employees in the NGAs, such as the
DPWH, is governed by PSLMC Resolution No. 4, Series of 2002, A.O. No. 135, Series of
2005, and DBM Budget Circular No. 2006-1.
PSLMC Resolution No. 4, Series of 2002, authorized the grant of CNA Incentive
for employees in the NGAs, SUCs, and LGUs. It states that CNA Incentive may be
provided in the CNAs between the government agency and the employees association
therein in recognition of the joint efforts of labor and management to achieve all
planned targets, programs, and services approved in the budget of the agency at a
lesser cost. 1 7 The resolution also provided guidelines which must be followed in the
grant of CNA Incentive to employees in NGAs, SUCs, and LGUs. Among these is Section
1 which mandated that only the savings generated after the signing of the CNA may be
used for the CNA Incentive; 1 8 and Section 2 which required the inclusion of provisions
on cost-cutting measures and systems improvement that will be undertaken by both
the management and the labor organization to ensure that savings will be generated
after the signing of each CNA. 1 9
A.O. No. 135, Series of 2005, con rmed the grant of CNA Incentive under PSLMC
Resolution No. 4, Series of 2002. It reiterated that CNA Incentive shall be sourced solely
from the savings generated during the life of the CNA, 2 0 and that there must be
provisions on cost-cutting measures in the CNA. 2 1 It further clari ed that CNA
Incentive may be extended to rank-and-file employees only. 2 2
Finally, DBM Budget Circular No. 2006-1 provided limitations and conditions for
the grant of CNA Incentive. Among these is Item No. 7, which speci ed the fund from
which the CNA Incentive may be sourced.
7.0 Funding Source
7.1 The CNA Incentive shall be sourced solely from savings
from released Maintenance and Other Operating Expenses
(MOOE) allotments for the year under review , still valid for
obligation during the year of payment of the CNA, subject to the
following conditions:
7.1.1 Such savings were generated out of the cost-cutting
measures identified in the CNAs and supplements thereto;
7.1.2 Such savings shall be reckoned from the date of signing
of the CNA and supplements thereto;
7.1.3 Such savings shall be net of the priorities in the use
thereof such as augmentation of amounts set aside for
compensation, bonus, retirement gratuity, terminal leave
bene ts, old-age pension of veterans and other personnel
bene ts authorized by law and in special and general
provisions of the annual General Appropriations Act, as well
as other MOOE items found to be de cient. Augmentation
shall be limited to the actual amount of de ciencies incurred;
and
7.1.4 The basic rule that augmentation can be done only if there
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 is de ciency in speci c expenditure items, should be strictly
observed. (Emphasis supplied) ETHIDa

Clear from the foregoing is that CNA Incentive may not be allocated out of the
savings of any fund. To be valid, the CNA Incentive must be released from the savings
of the MOOE. In this case, there is no dispute that the subject CNA Incentive was paid
out of the savings from the EAO. The violation of the provisions of DBM Budget Circular
No. 2006-1 is glaring. Thus, the COA correctly a rmed ND No. 09-01-101-(09) as there
are factual and legal justifications therefor.
Cuaresma, however, insists that savings from the EAO may be used to pay CNA
Incentive considering that EAO and MOOE serve the same purpose. She pointed out
that DPWH's MOOE was reduced because its EAO may be used to cover for the
department's administrative expenses. She cited the following exchange during the
budget deliberation before the Committee on Appropriations hearing on September 22,
2010 in support of her argument:
REP. ACHARON:
xxx xxx xxx
  No, you reported that the budget, as I've seen it, [is] really declining from
2009 to x x x last year x x x including the other operating expenses in
different regional o ces. Is that correct? So how will you appropriate this
money when you reduce it by almost 55 percent. You mean to say that
other regional offices will no longer have electricity or water? How's that?
MR. SINGSON:
    Your Honor, there is also what we call engineering administrative
overhead, that is between 3 and 3.5 percent that is provided for the various
regions and districts for overhead expenses and operating expenses, Your
Honor.
REP. ACHARON:
  Okay, so you charge it to the indirect cost of the project. Okay. So I hope
that there will be no complaints from regional o ces that they can no
longer pay their x x x. 2 3
The Court is not convinced.
In the rst place, the cited exchange does not have any material relation to the
issue at hand. The Court notes that the subject hearing before the Committee on
Appropriations on September 22, 2010 was for the purpose of enacting the 2011 GAA.
On the other hand, the issue in this case it involves the disallowance of a disbursement
of a fund from the 2008 GAA.
Moreover, nothing in the cited exchange would support Cuaresma's conclusion
that savings from the EAO may be used to pay the CNA Incentive in lieu of the savings
from the MOOE. While former DPWH Secretary Rogelio Singson explained that the EAO
fund may be used for the administrative expenses of the DPWH and its regional o ces,
he never suggested that savings from the EAO may also be the source of the CNA
Incentive. Thus, the Court concurs with the COA's observation:
Further, the TSN shows that Secretary Singson proposed the reduction of
DPWH's MOOE considering that there were other sources of funds to cover
DPWH administrative expenses such as the EAO. The House of Representatives
only con rmed the proposed budget of DPWH for 2011 and did not, in any way,
declare that EAO can be used as a source of CNA incentive in lieu of MOOE. The
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 approval of the proposed budget of DPWH is not a blanket authority to use the
EAO fund without complying with the existing laws and regulations. 2 4
Cuaresma also faults the COA for allegedly being selective when it disallowed the
subject CNA Incentive. She claims that there were other departments and regional
o ces which sourced their respective CNA Incentive from the EAO but the COA
allowed their releases. Thus, she alleges violation of the equal protection clause.
This argument is misplaced. cSEDTC

In People v. Dela Piedra , 2 5 the Court declared that an erroneous performance of

statutory duty — such as an apparent selective enforcement of the statute — could not
be considered a violation of the equal protection clause, unless the element of
intentional or purposeful discrimination is shown. In that case, the Court ruled that there
is no violation of the equal protection of the laws in prosecuting only one of the many
equally guilty persons. This lone circumstance would not be su cient to uphold the
claim of denial of the equal protection clause. Absent a clear showing of intentional
discrimination, the prosecuting o cers shall be presumed to have regularly performed
their official duties. Thus:
The prosecution of one guilty person while others equally guilty are not
prosecuted, however, is not, by itself, a denial of the equal protection of the
laws. Where the o cial action purports to be in conformity to the
statutory classi cation, an erroneous or mistaken performance of the
statutory duty, although a violation of the statute, is not without more
a denial of the equal protection of the laws . The unlawful administration
by o cers of a statute fair on its face, resulting in its unequal application to
those who are entitled to be treated alike, is not a denial of equal protection
unless there is shown to be present in it an element of intentional or purposeful
discrimination. This may appear on the face of the action taken with respect to
a particular class or person, or it may only be shown by extrinsic evidence
showing a discriminatory design over another not to be inferred from the action
itself. But a discriminatory purpose is not presumed, there must be a showing of
"clear and intentional discrimination." Appellant has failed to show that, in
charging appellant in court, that there was a "clear and intentional
discrimination" on the part of the prosecuting o cials. 2 6 (Emphasis supplied;
citations omitted; italics in the original)
Like the prosecution which has been given the discretion to prosecute whoever it
believes to have committed a crime, depending on its sound assessment of the
evidence, the COA has the authority to disallow disbursements of public funds if, in its
judgment, they were utilized in violation of its intended purpose. Consequently, it is up
to the person who claims to have been the victim of selective enforcement to prove
that the same was made for a discriminatory purpose.
In this case, aside from her allegation that DPWH IV-A was among those singled
out by the COA concerning the disallowance of the CNA Incentive, Cuaresma failed to
present even a single evidence to show that the disallowance of the subject CNA
Incentive was made pursuant to a discriminatory purpose. Clearly, no violation of equal
protection clause for selective enforcement could be attributed to the COA as
Cuaresma failed to prove that there was intentional discrimination.
Neither could the alleged allowance by the COA of the CNA Incentive for calendar
year 2007 be su cient reason to conclude that the commission is guilty of grave
abuse of discretion. Su ce it to state that the State cannot be put in estoppel by the
mistakes or errors of its o cials or agents. 2 7 The supposed error by the COA in
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 allowing DPWH IV-A's CNA Incentive for calendar year 2007, allegedly similarly sourced
from the savings from the EAO, is insu cient justi cation to uphold the validity of the
CNA Incentive in question. A contrary ruling would compel the COA to contravene its
constitutional duty as the guardian of public funds.
The COA erred when it absolved the
DPWH IV-A employees who received
the benefit from any liability.

The Court concurs with the COA's pronouncement that Cuaresma, as well as the
other certifying and approving o cers of DPWH IV-A, must be held liable for the
amount of the disallowance. AaCTcI

I n Manila International Airport Authority v. Commission on Audit , 2 8 the Court

held that o cers of the Manila International Airport Authority (MIAA) were not in the
position to approve and certify the funding for the CNA Incentive without assuring
themselves that the conditions imposed by PSLMC Resolution No. 2, Series of 2003,
are complied with. PSLMC Resolution No. 2 is the resolution governing the grant of
CNA Incentive to employees in Government Financial Institutions and Government-
Owned and Controlled Corporations, such as the MIAA.
In this case, Cuaresma, as one of the certifying o cers of DPWH IV-A, was duty-
bound to ensure compliance with the conditions and limitations imposed in PSLMC
Resolution No. 4, Series of 2002, in relation to DBM Budget Circular No. 2006-1, before
she could issue certi cation on the availability of funds for the subject CNA Incentive.
Unfortunately, she failed in this regard considering the non-observance with the
limitation that savings from MOOE shall be the sole source of CNA Incentive. Hence,
she must be held liable for the amount of the disallowance.
Nevertheless, although the CNA Incentive released by the DPWH IV-A was
properly disallowed, the COA erred when it ruled that the DPWH IV-A employees who
bene ted from the incentive need not refund the amounts they received. The Court
holds that the DPWH IV-A employees are obliged to return the amounts they received
under the principle of unjust enrichment.
Jurisprudence holds that there is unjust enrichment when a person unjustly
retains a bene t to the loss of another, or when a person retains money or property of
another against the fundamental principles of justice, equity and good conscience. The
statutory basis for the principle of unjust enrichment is Article 22 of the Civil Code
which provides that "[e]very person who through an act of performance by another, or
any other means, acquires or comes into possession of something at the expense of
the latter without just or legal ground, shall return the same to him."
The principle of unjust enrichment under Article 22 requires two conditions: (1)
that a person is bene ted without a valid basis or justi cation, and (2) that such bene t
is derived at another's expense or damage. There is no unjust enrichment when the
person who will benefit has a valid claim to such benefit. 2 9
The conditions set forth under Article 22 of the Civil Code are present in this
case.
It is settled that the subject CNA Incentive was invalidly released by the DPWH
IV-A to its employees as a consequence of the erroneous application by its certifying
and approving o cers of the provisions of DBM Budget Circular No. 2006-1. As such, it
only follows that the DPWH IV-A employees received the CNA Incentive without valid
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 basis or justi cation; and that the DPWH IV-A employees have no valid claim to the
benefit. Moreover, it is clear that the DPWH IV-A employees received the subject benefit
at the expense of another, speci cally, the government. Thus, applying the principle of
unjust enrichment, the DPWH IV-A employees must return the bene t they unduly
received.
The obligation of the DPWH IV-A employees to reimburse the amounts they
received becomes more obvious when the nature of CNA Incentive as negotiated
benefit is considered.
It must be recalled that CNA Incentive is granted as a form of reward to motivate
employees to exert more effort toward higher productivity and better performance.
However, before any CNA Incentive may be granted, the CNA on which it is based must
rst be negotiated, approved, and implemented. On the negotiation and approval of
CNAs, Rule XII of the Amended Rules and Regulations Governing the Exercise of the
Right of Government Employees to Organize, provides: EcTCAD

RULE XII
COLLECTIVE NEGOTIATIONS
Section 1. Subject of negotiation. — Terms and conditions of
employment or improvements thereof, except those that are xed by law, may
be the subject of negotiation.
Section 2. Negotiable matters. — The following concerns may be the
subject of negotiation between the management and the accredited employees'
organization:
xxx xxx xxx
(m) CNA incentive pursuant to PSLMC Resolution No. 4, s.
2002 and Resolution No. 2, s. 2003; and
(n) such other concerns which are not prohibited by law and
CSC rules and regulations.
xxx xxx xxx
Section 4. Effectivity of CNA. — The CNA shall take effect upon
its signing by the parties and rati cation by the majority of the rank-
and-file employees in the negotiating unit . (Emphasis supplied)
xxx xxx xxx
From the provisions of the aforecited rule, there are two necessary steps which
must be undertaken before the CNA Incentive could be released to the government
employees: first, the negotiation between the government agency and the employees'
collective negotiation representative; and second, the approval by the majority of the
rank-and- le employees in the negotiating unit. In the rst step, the government
employees concerned participates through their duly-elected representative; in the
second, the rank-and- le employees participate directly. Thus, unlike ordinary monetary
bene ts granted by the government, the CNA Incentive involve the participation of the
employees who are intended to be the beneficiaries thereof.
In this case, the DPWH IV-A employees' participation in the negotiation and
approval of the CNA, whether direct or indirect, certainly gives them the necessary
information to know the requirements for the valid release of the CNA Incentive. Verily,
when they received the subject bene t, they must have known that they were
undeserving of it.
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 WHEREFORE , the Decision No. 2016-377 dated November 10, 2016 and the
Resolution No. 2017-458 dated December 27, 2017, both of the Commission on Audit,
are hereby AFFIRMED with MODIFICATION . The certifying and approving o cers, as
well as all the employees of the DPWH IV-A who received the subject CNA Incentive, are
liable for the amount of the disallowance. They must reimburse the amounts they
received through salary deduction, or through whatever mode of payment the COA may
deem just and proper under the circumstances. HSAcaE

SO ORDERED.
Carpio, *** Peralta, Del Castillo, Perlas-Bernabe, Leonen, Jardeleza, Caguioa, A.B.
Reyes, Jr., Gesmundo, Carandang and Lazaro-Javier, JJ., concur.
Bersamin, ** C.J., is on official business.
Hernando, **** J., is on leave.

Footnotes
* Also referred to as "CNA Incentives" in the Petition and in some parts of the rollo.
** On Official Business.
*** Designated as Acting Chief Justice per Special Order No. 2644 dated March 15, 2019.
**** On leave.

1. Concurred in by COA Chairperson Michael G. Aguinaldo, Commissioner Jose A. Fabia and

Commissioner Isabel D. Agito; rollo, pp. 68-74.

2. Id. at 19-21. (The said Resolution was docketed as "Decision No. 2017-458.")
3. Penned by COA Regional Director Nilda M. Blanco; id. at 56-60.
4. Id. at 51.
5. Id. at 47.
6. Id.

7. Id. at 59-60.
8. Id. at 61-67.
9. Supra note 1.
10. Id. at 72-73.

11. Supra note 2.

12. Id. at 20.
13. Id. at 7-8.
14. Id. at 95-109.
15. Metropolitan Waterworks and Sewerage System v. Commission on Audit, G.R. No. 195105,
November 21, 2017, citing Sanchez v. Commission on Audit, 575 Phil. 428, 444-445
(2008).

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 16. Id., citing Yap v. Commission on Audit, 633 Phil. 174, 189 (2010).
17. PSLMC Resolution No. 4, Series of 2002, Section 1.
18. Id.
19. Id. at Section 2.
20. Administrative Order No. 135, Series of 2005, Section 4.

21. Id. at Section 3.

22. Id. at Section 2.
23. Rollo, pp. 9; 64.
24. Id. at 71.
25. 403 Phil. 31 (2001).

26. Id. at 54-55.

27. Republic v. Intermediate Appellate Court, 284-A Phil. 528, 540 (1992); Republic v. Go Bon
Lee, 111 Phil. 805, 809 (1961); Development Bank of the Philippines v. Commission on
Audit, 301 Phil. 207, 212 (1994).
28. 681 Phil. 644 (2012).
29. Car Cool Philippines, Inc. v. Ushio Realty & Development Corp., 515 Phil. 376, 384 (2006);
Cabrera v. Ameco Contractors Rental, Inc., G.R. No. 201560, June 20, 2012 (Minute
Resolution); Government Service Insurance System v. Commission on Audit, 694 Phil.
518, 526 (2012).

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