Case Digest - NAC Vs COA

G.R. No.
156982 (September 8, 2004)
NATIONAL AMNESTY COMMISSION, Petitioner,

vs.
COMMISSION ON AUDIT, JUANITO G. ESPINO, Director IV, NCR, Commission on Audit, and
ERNESTO C. EULALIA, Resident Auditor, National Amnesty Commission, Respondents.
FACTS:
 National Amnesty Commission (NAC) is a government agency created on March 25, 1994 by then President
Fidel V. Ramos through Proclamation No. 347
 NAC is composed of seven members: a Chairperson, three regular members appointed by the President, and the
Secretaries of Justice, National Defense and Interior and Local Government as ex officio members
 After personally attending the initial NAC meetings, the three ex officio members turned over said
responsibility to their representatives who were paid honoraria beginning Dec. 12, 1994
 COA issued Memorandum No. 97-038 on September 19, 1997

Implementation of Senate Committee Report No. 509 Committee on Accountability of Public Officers and
Investigations and Committee on Civil Service and Government Reorganization
 NAC resident auditor Eulalia disallowed on audit the payment of honoraria to these representatives amounting
to ₱255,750 for the period December 12, 1994 to June 27, 1997, pursuant to COA Memorandum No. 97-038.
 NAC passed Administrative Order No. 2 on April 28, 1999 (the new Implementing Rules and Regulations of
Proclamation No. 347) which was approved by Pres. Estrada on Oct. 19, 1999
 NAC sought to annul the decisions of COA disallowing the payment of honoraria to the representatives of
petitioner's ex officio members per COA Memorandum No. 97-038
ISSUE:
1. Whether or not it is proper for COA to implement COA Memorandum No. 97-038 without notice and
publication
2. Whether or not it is proper for COA to disallow the honoraria to ex officio members' representatives
3. Whether or not it is proper for COA to declare as null and void:
Section 1, Rule II of Administrative Order No. 2 – The ex officio members may designate their representatives
to the Commission. Said Representatives shall be entitled to per diems, allowances, bonuses and other benefits
as may be authorized by law.
RULING:
1. Contrary to Petitioner's claim, COA Memorandum No. 97-038 does not need, for validity and effectivity,
the publication required by Article 2 of the Civil Code
COA Memorandum No. 97-038 is merely an internal and interpretative regulation or letter of instruction which
does not need publication to be effective and valid. It is not an implementing rule or regulation of a statute but a
directive issued by the COA to its auditors to enforce the self-executing prohibition imposed by Section 13,
Article VII of the Constitution on the President and his official family, their deputies and assistants, or their
representatives from holding multiple offices and receiving double compensation.
2. The COA is correct that there is no legal basis to grant per diem, honoraria or any allowance whatsoever
to the NAC ex officio members' official representatives
The ex-officio position being actually and in legal contemplation part of the principal office, it follows that the
official concerned has no right to receive additional compensation for his services in the said position. The
reason is that these services are already paid for and covered by the compensation attached to his principal
office.
NAC ex officio members' representatives are not exempt from the general prohibition because there is no law or
administrative order creating a new office or position and authorizing additional compensation therefor.
3. Section 1, Rule II of Administrative Order No. 2 is valid
The problem lies not in the administrative order but how the NAC and the COA interpreted it. The
administrative order itself acknowledges that payment of allowances to the representatives must be authorized
by the law, that is, the Constitution, statutes and judicial decisions. As already discussed, payment of such
allowances is not allowed, prohibited even.
The representatives are not entitled to something their own principals are prohibited from receiving. Neither can
they claim good faith, given the express prohibition of the Constitution.
CASE DISMISSED FOR LACK OF MERIT.

COMMISSION ON AUDIT MEMORANDUM NO. 97-038
SUBJECT: Implementation of Senate Committee Report No. 509 Committee on Accountability of Public Officers
and Investigations and Committee on Civil Service and Government Reorganization.
The Commission received a copy of Senate Committee Report No. 509 urging the Commission on Audit to immediately
cause the disallowance of any payment of any form of additional compensation or remuneration to cabinet secretaries,
their deputies and assistants, or their representatives, in violation of the rule on multiple positions, and to effect the refund
of any and all such additional compensation given to and received by the officials concerned, or their representatives, from
the time of the finality of the Supreme Court ruling in Civil Liberties Union v. Executive Secretary to the present. In the
Civil Liberties Union case, the Supreme Court ruled that Cabinet Secretaries, their deputies and assistants may not hold
any other office or employment. It declared Executive Order 284 unconstitutional insofar as it allows Cabinet members,
their deputies and assistants to hold other offices in addition to their primary office and to receive compensation therefor.
The said decision became final and executory on August 19, 1991.
In view thereof, all unit heads/auditors/team leaders of the national government agencies and government owned or
controlled corporations which have effected payment of subject allowances, are directed to implement the
recommendation contained in the subject Senate Committee Report by undertaking the following audit action:
1. On accounts that have not been audited and settled under certificate of settlements and balances on record from
August 19, 1991 to present - to immediately issue the Notices of disallowance and corresponding certificate of
settlements and balances.
2. On accounts that have been audited and settled under certificate of settlements and balances on record - to review
and re-open said accounts, issue the corresponding notices of disallowance, and certify a new balance thereon. It
is understood that the re-opening of accounts shall be limited to those that were settled within the prescriptive
period of three (3) years prescribed in Section 52 of P.D. 1445.
3. On disallowances previously made on these accounts - to submit a report on the status of the disallowances
indicating whether those have been refunded/settled or have become final and executory and the latest action
taken by the Auditor thereon.
All auditors concerned shall ensure that all documents evidencing the disallowed payments are kept intact on file in their
respective offices.
Any problem/issue arising from the implementation of this Memorandum shall be brought promptly to the attention of the
Committee created under COA Officer Order No. 97-698 thru the Director concerned, for immediate resolution.
An initial report on the implementation of this Memorandum shall be submitted to the Directors concerned not later than
October 31, 1997. Thereafter, a quarterly progress report on the status of disallowances made shall be submitted, until all
the disallowances shall have been enforced.
The Committee created under COA Office Order No. 97-698, dated September 10, 1997, shall supervise the
implementation of this Memorandum which shall take effect immediately and shall submit a consolidated report thereon in
response to the recommendation of the Senate Committee on Accountability of Public Officers and Investigation and
Committee on Civil Service and Government Reorganization.9 (Emphasis supplied)

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G.R. No.

156982 (September 8, 2004)

NATIONAL AMNESTY COMMISSION, Petitioner,

 COA issued Memorandum No. 97-038 on September 19, 1997

3. Whether or not it is proper for COA to declare as null and void:

3. Section 1, Rule II of Administrative Order No. 2 is valid

CASE DISMISSED FOR LACK OF MERIT.

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