R E S O L U T I O N

Under COA Decision No. 2000-018, dated January 25, 2000, this Commission granted the request of Ms. Janet B. Fabiana, former Accountant III, Iloilo State College of Fisheries (ISCOF), Barotac Nuevo, Iloilo, for exclusion from liability. However, Dr. Elpidio V. Locsin, the incumbent ISCOF President, was held jointly and severally liable for the audit disallowance when he impliedly assumed responsibility thereon after signing the clearance of his predecessor, Mr. Benigno Panistante.

In his Motion for Reconsideration of February 9, 2000, Dr. Locsin averred that the assailed decision was prejudicial to his interest since: [1] it violated his right to administrative due process; [2] there was no cause of action against him; and [3] he could not be held liable for the disallowance where he had no participation. In support of the first issue, Dr. Locsin invoked the case of Helpmate vs. NLRC, 276 SCRA 315, where the Court ruled that in administrative proceedings "due process simply means the opportunity to explain one’s side or the opportunity to seek a reconsideration of the action or ruling complained of." He was allegedly never given any notice or opportunity to be heard when the assailed decision was rendered, hence, it could neither bind him nor make him liable for the disallowance.

As regards the second issue, Dr. Locsin maintained that he signed the clearance from cash and property accountabilities of his predecessor on March 3, 1993 or barely 48 hours after he assumed office as the new head of ISCOF. However, Notice of Disallowance No. 95-004-101(88-91), dated April 26, 1995, became effective and executory only in 1995. Consequently, there was no cause of action in 1993 when he signed the clearance since, at that time, there was no disallowance yet. Under Section 2, Rule 11 of the 1997 Revised Rules on Civil Procedure, a cause of action is defined "as an act or omission by which a party violates a right of another." Similarly, in Heirs of Marcelino Pagobo vs. CA, 280 SCRA 870, the Court declared that "a cause of action is an act of omission of one party in violation of the legal rights of the other. It is the reason why the litigation has come about."

On the third issue, the audit disallowance on the salary of Mr. Rolando Armentia from October 18, 1988 to June 30, 1991 amounting to P160,792 arose before he assumed office in 1993. Thus, it clearly showed that he had no participation in the processing, payment and disbursement of the disallowed salary. Moreover, when he signed the clearance of his predecessor, 5 ISCOF responsible officials had already signed the clearance without any statement as to his predecessor’s accountability. Relying on the ruling in Macadangdang vs. Sandiganbayan, 170 SCRA 308, and Arias vs. Sandiganbayan, 180 SCRA 315, Dr. Locsin contended that he could not be held liable thereon since his function was purely ministerial. Moreover, it would be arbitrary on his part if he would not issue the clearance of Ms. Fabiana since she had no personal cash and property accountabilities to ISCOF.

The Director, National Government Audit Office II, this Commission, is of the view that Dr. Locsin’s constitutional right to due process was transgressed when the assailed decision concluded that he "impliedly assumed full responsibility" despite the fact that he was never impleaded or given the opportunity to air his side.

After a careful evaluation, this Commission finds the instant motion for reconsideration meritorious. Section 9.2 of the Manual on Certificate of Settlement and Balances (CSB) clearly provides that "The agency head shall not approve any clearance from money and property accountabilities in favor of any employee, unless all charges, disallowances and suspensions are first settled; otherwise, he shall be jointly and severally liable with the employee concerned." On the other hand, Section 27 thereof speaks of the liability of the head of agency for all government funds and property under his administration. Further, Section 28 thereof requires the head of agency to "exercise the diligence of a good father of a family in supervising the accountable officers under his control to prevent the incurrence of loss of government funds or property, otherwise he shall be jointly and severally liable with the person primarily accountable therefor."

Concededly, Dr. Locsin was not among the persons held liable for the audit disallowance since he was not yet the ISCOF President then, thus, Section 9.2 of the Manual on CSB is inapplicable. At the time he signed the clearance of the former ISCOF President, there were no charges, suspensions or disallowances yet. The enforceability of the disallowance during his incumbency holds no water since the controlling matter is the existence of suspension or disallowance at the time of the issuance of the clearance. To hold him liable for the disallowances is a clear transgression of his substantive right as he was made liable for transactions done long before he assumed the presidency of ISCOF. In fact, it is the ISCOF Auditor who appears remiss in the performance of his duties for failure to audit the transactions on time.

Premises considered, the instant motion for reconsideration is given due course. Accordingly, COA Decision No. 2000-018 is hereby modified excluding Dr. Locsin from liability while former ISCOF President Benigno Panistante remains liable for the disallowance.