Social Security System, Petitioner vs. Commission on Audit, Respondent GR. NO. 210940, September 6, 2016 TOPIC: ALLOWANCES & BENEFITS
Facts: On May 14, 1997, the SSC of the Social Security System (SSS) approved Resolution No. 3604 granting a new compensation package for its members, including medical benefits, rice allowance, and a provident fund. These benefits were incorporated in the SSS Manual on Personnel Policies, Rules and Regulations or commonly known in the SSS as the "Blue Book." On September 22, 1999, the SSC issued Resolution No. 7906 granting EME (Extraordinary Miscellaneous Expenses) to its members at similar rates then given to members of the Government Service Insurance System (GSJS). (GSJS). It was not limited to, expenses incurred for meetings, seminars, conferences, official entertainment, and public relations P4.49 million to cover the payment of EME. It also covered the increase in EME of its Chairman to P750,000.00 per year, which was the rate being given to his counterpart in the GSIS. On July 4, 2007, the Legal and Adjudication Office-Corporate Government Sector (LAO-CGS) (L AO-CGS) of the COA issued ND No. SSS-2007-02(2004) disallowing the total amount of P4,314,683.99, broken down as follows: P 3,877,199.96 – EME, P 70,992.03 – Medical Benefits, P 106,992.000 – Rice Benefits, P 259,500.00 – Provident Fund. In its August 10, 2009 Decision, the COA-Legal Services Sector (COA-LSS) denied the motion for reconsideration filed by the SSS. Aggrieved, the SSS appealed before the COA. In its January 30, 2013 decision, the COA upheld the disallowance of the disbursements in question. Issue: Whether or not the SSC are entitles to the EME, medical benefit, rice allowance and provident fund. Notice of Disallowance No. SSS-2007-02 (2004).
Held: WHEREFORE, the January 30, 2013 Decision and the December 6, 2013 Resolution of the Commission on Audit is AFFIRMED with MODIFICATION in that the Social Security System and its officers are absolved from refunding the amount covered by Notice of Disallowance No. SSS-2007-02 (2004). the approving officers had knowledge of facts or circumstances which would render the disbursements illegal. Thus, they were bound to refund the same for acting in bad faith. In contrast, the approving officers in the case at bench need not refund the disallowed amount because they acted in good faith. In Mendoza v. COA, the Court held that the lack of a similar ruling is a basis of good faith. There has yet to be a jurisprudence or ruling that the benefits which may be received by members of the SSC are limited to those enumerated under Section 3(a) of the SS Law. To reiterate, good faith may be appreciated because the approving officers were without knowledge of any circumstance or information which would render the transaction illegal or unconscientious. Neither could they be deemed to be grossly negligent as they believed that they could disburse the said amounts on the basis of the provisions of the SS Law.
