Irene G. Ancheta, et al. vs. Commission On Audit (COA)

G.R. No. 236725, February 02, 2021


In 2010, SWD, a government-owned and controlled corporation (GOCC), released an aggregate amount of P3,354,123.50 worth of benefits for its Board of Directors. These disbursements were disallowed in Notice of Disallowance (ND) because they were granted to persons employed after June 30, 1989, in violation of DBM CCC No. 10.  The COA Audit Team particularly cited paragraph 5.5 of DBM CCC No. 10, which enumerated the additional allowances that are not integrated in the standardized salary rate, and allowed to be continuously given only to incumbent employees, who are actually receiving such benefits as of June 30, 1989. Considering that the SWD officers and employees who received the additional benefits in 2010 were employed after June 30, 1989, the COA Audit Team concluded that the grants were unauthorized. 

The following persons were charged responsible to settle the disallowed amounts: (1) Ancheta, General Manager, who approved the transaction; (2) Ariel Rapsing (Rapsing), Corporate Budget Specialist, who certified that the expenses were necessary; (3) Agnes Corpuz (Corpuz), Cashier A, as the disbursing officer; and (4) the other officers and employees who received the disallowed benefits, except those incumbents as of June 30, 1989.

Petitioners insisted that the disbursements were authorized by DBM Secretary Benjamin Diokno ‘s (Secretary Diokno) Letter dated November 8, 2000 addressed to certain local water districts. Guided by the foregoing Letters, petitioners contend that the endowment of additional benefits to incumbents as of December 31, 1999 is authorized; and that assuming the disallowance is sustained, they should not be held liable for the refund considering their good faith. In addition to their reliance upon the DBM opinions, petitioners argue that the power to grant allowances is with the Board of Directors, and the approving and certifying officers merely implemented the board resolutions as a matter of duty. 

COA maintains that LWDs are GOCCs upon their creation under PD No. 198. The COA stands firm that only those additional compensations given to incumbents as of July 1, 1989 shall be allowed in accordance with RA No. 6758. The violation of this law renders the approving and certifying officers’ solidarily liable to settle the disallowed amounts.


Whether SWD already covered by RA No. 6758 when the 2010 benefits were granted?


1. YES. Under RA No. 6758,  all allowances are deemed included in the standardized salary rate, unless excluded by law or by a DBM issuance. This rule was premised upon the distinct policy to eliminate multiple allowances and other incentive packages, resulting in differences of compensation among government personnel. However, due to the inequity and injustice that RA No. 6758 may cause to incumbents, the legislature cushioned its effect and adopted the policy of non-diminution of pay as embodied under Sections 12 and 17 of RA No. 6758.

Section 4 of RA No. 6758 provides that its provisions “shall apply to all positions, appointive or elective, on full or part-time basis, now existing and hereafter created in the government, including [GOCCs] and government financial institutions.” SWD is a GOCC with a special charter, created and organized pursuant to PD No. 198, which took effect in 1973. Thus, it is erroneous for petitioners to insist that SWD became a GOCC only on March 12, 1992 or after the finality of the Court’s decision in Davao City Water District.

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