Key Takeaway: The Role of a Presiding Officer Does Not Automatically Imply Liability for Disallowed Transactions

Cadia v. Commission on Audit, G.R. No. 251995, January 26, 2021

Imagine a local government official, dedicated to serving their community, suddenly facing a financial liability for a decision they did not directly influence. This scenario played out in the case of Rhodora J. Cadiao, the Vice-Governor of Antique, who was held liable for a disallowed financial assistance grant. The central legal question was whether a presiding officer, in this case, a Vice-Governor, should be held personally liable for a decision passed by the local legislative body they preside over, especially when they did not vote on the matter.

The case revolved around a resolution passed by the Sangguniang Panlalawigan (SP) of Antique, granting financial assistance to the Liga ng mga Barangay for the payment of insurance premiums. This transaction was later disallowed by the Commission on Audit (COA), leading to a dispute over the liability of those involved, particularly the Vice-Governor, who was the presiding officer during the resolution’s passage.

Legal Context

In the Philippines, local government officials operate under the Local Government Code of 1991 (Republic Act No. 7160). This law delineates the roles and responsibilities of local officials, including the Vice-Governor, who serves as the presiding officer of the SP. According to Section 49 of RA 7160, the Vice-Governor votes only to break a tie, emphasizing their role as an impartial overseer rather than a decision-maker in every instance.

The term “presiding officer” refers to the individual who ensures the smooth operation of legislative proceedings but does not necessarily have the authority to influence the outcome of votes directly. In this case, the Vice-Governor’s role was to attest to the passage of resolutions, not to vote on them unless there was a tie.

The liability of public officers for disallowed transactions is governed by COA Circular No. 2009-006, which specifies that liability should be determined based on the nature of the disallowance, the duties and responsibilities of the officers involved, their participation in the transaction, and the extent of loss to the government. This framework is crucial in understanding why the Vice-Governor’s liability was contested.

Case Breakdown

The story begins with the approval of SP Resolution No. 163A-2008, which allocated funds for the insurance premiums of Punong Barangays in Antique. This resolution was part of a supplemental budget and was passed by a majority vote of the SP members. Rhodora J. Cadiao, as Vice-Governor, presided over the session but did not vote on the resolution as there was no tie.

Following the passage of the resolution, the COA issued a Notice of Disallowance (ND) citing the illegality of using the 20% Development Fund for this purpose. The Vice-Governor, along with other SP members, was named liable for the disallowed amount of P2,950,000.00.

Cadiao challenged her inclusion in the ND, arguing that her role as presiding officer did not involve direct participation in the decision-making process. The case progressed through the COA Regional Office, which initially excluded some SP members from liability based on their non-participation in the vote. However, Cadiao’s appeal to the COA Proper was denied, leading her to seek relief from the Supreme Court.

The Supreme Court’s decision hinged on the interpretation of the Vice-Governor’s role and the application of COA Circular No. 2009-006. The Court emphasized that Cadiao’s actions were part of her official duties as presiding officer and that there was no evidence of bad faith or personal gain.

The Court stated, “The fact that petitioner is the presiding officer of the SP and the Vice-Governor of Antique does not automatically include her among the persons liable for the disallowance.” Another crucial quote was, “The mere signature of petitioner in the passage of the resolution without anything more could not be considered as a presumption of liability.”

Practical Implications

This ruling clarifies that presiding officers of local legislative bodies are not automatically liable for disallowed transactions unless they have directly participated in the decision or acted with bad faith. It sets a precedent that the role of a presiding officer is to ensure procedural fairness and not to bear personal liability for the decisions made by the body they oversee.

For local government officials, this case underscores the importance of understanding their roles and the potential liabilities associated with their positions. It also highlights the need for clear documentation of participation in legislative decisions to avoid unwarranted liability.

Key Lessons:

• Presiding officers should be aware of their limited liability unless they directly influence or vote on a decision.
• Documentation of abstentions and non-participation is crucial in appeals against disallowances.
• Local governments should ensure that expenditures are aligned with legal guidelines to avoid disallowances.

Frequently Asked Questions

What is the role of a presiding officer in local government?
The presiding officer, often the Vice-Governor or Vice-Mayor, ensures the orderly conduct of legislative sessions and votes only to break a tie.

Can a presiding officer be held liable for a disallowed transaction?
Yes, but only if they directly participated in the decision or acted with bad faith. Merely presiding over the session does not automatically confer liability.

What should local government officials do to avoid liability for disallowed transactions?
They should ensure compliance with legal guidelines, document their participation or lack thereof in decisions, and seek legal advice when unsure about the legality of expenditures.

How can a local government appeal a Notice of Disallowance?
An appeal must be filed within six months from receipt of the ND, and it should include evidence of non-participation or procedural irregularities.

What are the implications of this ruling for future cases?
It sets a precedent that presiding officers are not automatically liable for decisions made by the legislative body they oversee, which may lead to more careful consideration of liability in similar cases.

ASG Law specializes in local government law and administrative law. Contact us or email hello@asglawpartners.com to schedule a consultation and understand how this ruling can affect your situation.