High Court grants DBP plea on salaries

The Supreme Court (SC) has granted a petition by the Development Bank of the Philippines (DBP), which sought to revive the lifting of a notice of disallowance (ND) on salary increases of eight senior officers amounting to P17.38 million in 2006.

In a 13-page decision written by Associate Justice Jhosep Lopez and recently published online, the court reinstated an earlier ruling by the Commission of Audit (COA) to lift the ND because there had been “unjustified delay” in resolving the case.

The case started on June 19, 2007 when the supervising auditor disallowed the increase because the compensation plan lacked prior approval from the Office of the President (OP).

The DBP appealed the notice of disallowance before the COA Corporate Government Sector Cluster A but the appeal was denied on June 2, 2010.

DBP persevered and elevated a petition for review before the COA proper, which finally lifted the ND on Feb. 1, 2012.

The COA decision said the subsequent approval by then President Gloria Macapagal Arroyo of DBP’s compensation plan solved the absence of OP approval.

However, on March 27, 2012, then-DBP vice president of the Program Evaluation department, Mario Pagaragan, submitted confidential letters to the COA, asking it to reconsider the lifting of the ND because elections laws prohibit the grant of salary increase within 45 days before a regular election.

As such, Pagaragan said the approval of DBP’s compensation plan on April 22, 2010 was void because it was made within the 45-day period prior to the May 10, 2010 elections.

Convinced, the COA on April 13, 2015 said it was considering Pagaragan’s letter as a motion for reconsideration and reversed its earlier decision and sustained the ND again.

The COA also directed the director of its Fraud Audit Office Special Services Sector to investigate other complaints against DBP officials.

Three months later, DBP asked for yet another reconsideration on the grounds that the earlier COA decision of 2012 had become final and executory.

It added that Pagaragan is not a party to the case and thus, his letters should not have been considered as a motion for reconsideration.

On June 14, 2019, COA sustained anew the ND and held that it has the power to reexamine cases on account of new and material evidence. The ruling, however, exempted the approving officers and other recipients from refunding the amount based on the presumption of good faith.

DBP decided to go to the SC, which ruled that Pagaragan is not a real party of interest or an aggrieved party who is entitled to file a motion for reconsideration or appeal in questioning the validity of former president Arroyo’s approval of the compensation plan.

The February 2012 decision lifting the ND had become final and executory under COA rules, according to the high court.

“It is settled that all the issues between the parties are deemed resolved and laid to rest once a judgment becomes final. No other action can be taken on the decision except to order its execution.

“The courts cannot modify the judgment to correct perceived errors of law or fact. Public policy and sound practice dictate that every litigation must come to an end at the risk of occasional errors. This is the doctrine of immutability of a final judgment,” the court said.

COA is guilty of unjustified delay, the SC said, because it took more than three years to act on the letters and reverse the February 2012 decision and almost four years (until June 2019) to resolve another motion.

“COA did not explain the length of time to decide on the pending incident,” the court stated.