BCDA vs COA GR No. 178160, 2009-02-26

 

BASES CONVERSION v. COA, GR No. 178160, 2009-02-26

Facts:

CARPIO, J.:

This is a petition for certiorari with prayer for the issuance of a temporary restraining order and a writ of preliminary injunction. The petition seeks to nullify Decision No. 2007-020dated 12 April 2007 of COA.

13 March 1992, Congress approved Republic Act (RA) No. 7227 creating the Bases Conversion and Development Authority (BCDA).

Section 9 of RA No. 7227 states the powers and functions of the BCDA

20 December 1996, the Board adopted a new compensation and benefit scheme

25 August 1997, Board Chairman Victoriano A. Basco (Chairman Basco) recommended to President Fidel V. Ramos (President Ramos) the approval of the new compensation and benefit scheme.

9 October 1997, President Ramos approved the new compensation and benefit scheme.

1 October 2002, the Board passed Resolution No. 2002-10-193[6] approving the release of a P30,000 year-end benefit for 2002.

Aside from the contractual employees, regular permanent employees, and Board members, the full-time consultants of the BCDA also received the year-end benefit.

20 February 2003, State Auditor IV Corazon V. Españo of the COA issued Audit Observation Memorandum (AOM) No. 2003-004 stating that the grant of year-end benefit to Board members was contrary to Department of Budget and Management (DBM) Circular Letter No. 2002-2 dated 2 January 2002

In Notice of Disallowance (ND) No. 03-001-BCDA-(02) dated 8 January 2004, Director IV Rogelio D. Tablang (Director Tablang), COA, Legal and Adjudication Office-Corporate, disallowed the grant of year-end benefit to the Board members and full-time consultants.

In Decision No. 2004-013[9] dated 13 January 2004, Director Tablang "concurred" with AOM No. 2003-004 and ND No. 03-001-BCDA-(02).

20 February 2004, BCDA President and Chief Executive Officer requested the reconsideration of Decision No. 2004-013.

In a Resolution 22 June 2004, denied the request.

BCDA filed a notice of appeal

8 September 2004... appeal memorandum

23 December 2004... with the COA.

In Decision No. 2007-020, the COA affirmed the disallowance of the year-end benefit granted to the Board members and full-time consultants and held that the presumption of good faith did not apply to them.

COA stated that the members and ex-officio members of the Board of Directors are not entitled to YEB, they being not salaried officials of the government. The same goes with full time consultants wherein no employer-employee relationships exist between... them and the BCDA.

the BCDA claims that the Board can grant the year-end benefit to its members and full-time consultants because, under Section 10 of RA No. 7227, the functions of the Board include the adoption of a compensation and benefit scheme.

the BCDA claims that the Board members and full-time consultants should be granted the year-end benefit because the granting of year-end benefit is consistent with Sections 5 and 18, Article II of the Constitution.

the BCDA claims that the denial of year-end benefit to the Board members and full-time consultants violates Section 1, Article III of the Constitution.

the BCDA claims that the Board can grant the year-end benefit to its members and the full-time consultants because RA No. 7227 does not expressly prohibit it from doing so.

the BCDA claims that the Board members and full-time consultants are entitled to the year-end benefit because (1) President Ramos approved the granting of the benefit to the Board members, and (2) they have been receiving it since 1997.

Issues:

the BCDA claims that the Board members and full-time consultants should be granted the year-end benefit

Sections 5 and 18, Article II of the Constitution.

Ruling:

The Board members and full-time consultants of the BCDA are not entitled to the year-end benefit

The Board's power to adopt a compensation and benefit scheme is not unlimited. Section 9 of RA No. 7227 states that Board members are entitled to a per diem

BM Circular Letter No. 2002-2 states that, "Members of the Board of Directors of agencies are not salaried officials of the government. As non-salaried officials they are not entitled to PERA, ADCOM, YEB and retirement benefits unless expressly provided... by law." RA No. 7227 does not state that the Board members are entitled to a year-end benefit.

Article II of the Constitution is entitled Declaration of Principles and State Policies. By its very title, Article II is a statement of general ideological principles and policies. It is not a source of enforceable rights.

In Tondo Medical Center Employees Association v. Court of Appeals, the Court held that Sections 5 and 18, Article II of the Constitution are not self-executing provisions. In that case, the Court held that "Some of the constitutional provisions invoked in the present case were taken from Article II of the Constitution specifically, Sections 5 x x x and 18 the provisions of which the Court categorically ruled to be non self-executing."

Every presumption should be indulged in favor of the constitutionality of RA No. 7227 and the burden of proof is on the BCDA to show that there is a clear and unequivocal breach of the Constitution.

The BCDA failed to show that RA No. 7227 unreasonably singled out Board members and full-time consultants in the grant of the year-end benefit.

A careful reading of Section 9 of RA No. 7227 reveals that the Board is prohibited from granting its members other benefits.

Expressio unius est exclusio alterius. Had Congress intended to allow the Board members to receive other benefits, it would have expressly stated so.

When a statute is susceptible of two interpretations, the Court must "adopt the one in consonance with the presumed intention of the legislature to give its enactments the most reasonable and beneficial construction, the one that will render them operative and... effective."

The Court, however, notes that the Board members and full-time consultants received the year-end benefit in good faith. The Board members relied on (1) Section 10 of RA No. 7227 which authorized the Board to adopt a compensation and benefit scheme; (2) the fact that RA No. 7227... does not expressly prohibit Board members from receiving benefits other than the per diem authorized by law; and (3) President Ramos' approval of the new compensation and benefit scheme which included the granting of a year-end benefit to each contractual employee,... regular permanent employee, and Board member. The full-time consultants relied on Section 10 of RA No. 7227 which authorized the Board to adopt a compensation and benefit scheme. There is no proof that the Board members and full-time consultants knew that their receipt of the... year-end benefit was unlawful.

petition is PARTIALLY GRANTED.

Commission on Audit Decision No. 2007-020 dated 12 April 2007 is AFFIRMED with the MODIFICATION