The Supreme Court has ruled that government officials cannot receive additional compensation in the form of honoraria if they are already receiving a per diem allowance, as this would violate established laws and regulations. This decision clarifies the boundaries of permissible compensation for members of government boards, emphasizing adherence to prescribed limits and preventing unauthorized financial benefits. It reinforces the importance of transparency and accountability in public service, ensuring that government funds are used appropriately and in accordance with legal provisions.

ICAB’s Extra Pay: Was Reviewing Adoption Files Beyond the Call of Duty?

This case revolves around the Inter-Country Adoption Board (ICAB), the central authority in the Philippines for inter-country adoptions. In this case, Bernadette Lourdes B. Abejo, the Executive Director of the ICAB, challenged the Commission on Audit’s (COA) disallowance of additional remuneration paid to ICAB members. The COA disallowed the payments, arguing they lacked legal basis and violated existing regulations. The core legal question is whether ICAB members, who already receive a per diem, could also be paid honoraria for reviewing prospective adoptive parents’ (PAPs) dossiers, a task they undertook to address a heavy workload. The Supreme Court was asked to determine if this additional compensation was justified or if it ran afoul of the laws governing compensation for government officials.

The ICAB was created under Republic Act No. 8043 (RA 8043), also known as the “Inter-Country Adoption Act of 1995.” Its members include the Secretary of the Department of Social Welfare and Development (DSWD) as ex-officio Chairman, along with six other members appointed by the President. An Inter-Country Adoption Placement Committee (ICPC) operates under the Board’s direction, managing the selection and matching of applicants and children. From 2008 to 2010, the ICAB experienced a surge in applications, prompting its members to assist the ICPC with reviewing PAPs Dossiers. In response to this increased workload, Undersecretary Luwalhati F. Pablo authorized additional remuneration for ICAB members: P250.00 for each reviewed application, later increased to P500.00.

However, after an audit, the COA issued a Notice of Disallowance (ND) for P162,855.00, citing the lack of legal basis, conflict with Department of Budget and Management (DBM) Budget Circular (BC) No. 2003-5, and Section 49 of RA 9970. The COA also pointed out that the DSWD Legal Service had denied the grant of honoraria to ICAB members and that Section 5 of RA 8043 limited compensation to a per diem of P1,500.00 per meeting. Abejo, as the Executive Director and approving officer, was identified as liable for the disallowed amount. The COA Proper affirmed the disallowance, stating that the additional remuneration violated Section 5 of RA 8043 and DBM BC No. 2003-5, which prohibits honoraria for those already receiving per diem.

A key procedural point arose: Abejo did not file a motion for reconsideration of the COA Proper’s decision before filing a certiorari petition with the Supreme Court. Generally, failure to move for reconsideration is fatal to a certiorari petition because it deprives the tribunal of the opportunity to correct its errors. However, the Supreme Court recognized an exception: when the issues raised in the certiorari proceedings have already been addressed by the lower court. Because Abejo raised the same issues before the COA Proper, the Court proceeded to resolve the petition on its merits.

The Supreme Court emphasized that while government employees may be compensated for work outside their regular functions, such compensation must comply with applicable laws and rules. The Court quoted Sison v. Tablang, which states that while honoraria are given in appreciation for services, their payment must be circumscribed by the DBM’s rules and guidelines. In this case, RA 8043 and DBM BC No. 2003-5 prevented the ICAB members from receiving additional compensation. Section 5 of RA 8043 limits the per diem ICAB members can receive, and Item 4.3 of DBM BC 2003-5 prohibits honoraria for officers already receiving per diem.

The Court rejected the argument that the Intercountry Adoption Board Manual of Operation authorized the honoraria because Section 5 of the manual applied only to members of the ICPC, not the ICAB. Further, the manual itself was subordinate to express provisions of law and auditing rules. It states: “A Committee member shall receive an honorarium which shall be determined by the Board subject to usual accounting and auditing rules and regulations.” The Court also dismissed the claim that the ICAB members’ work constituted a “special project” compensable under Section 49 of RA 9970. To qualify as a special project, the undertaking must be a duly authorized inter-office or intra-office endeavor outside the regular functions of the agency, reform-oriented or developmental in nature, and contributory to improved service delivery.

In Ngalob v. Commission on Audit, the Supreme Court laid out specific requirements for a “special project,” including an approved project plan with defined objectives, outputs, timelines, and cost estimates. Abejo failed to demonstrate any approved special project plan, leaving the Court without a basis to determine if the ICAB members’ dossier review qualified as such.

Paragraph 4.3 of DBM Circular No. 2007-2 is explicit in requiring that a special project plan should be “prepared in consultation with all personnel assigned to a project and approved by the department/agency/lead agency head,” containing the following:

• title of the project;
• objectives of the project, including the benefits to be derived therefrom;
• outputs or deliverables per project component;
• project timetable;
• skills and expertise required;
• personnel assigned to the project and the duties and responsibilities of each;
• expected deliverables per personnel assigned to the project per project component at specified timeframes; and
• cost by project component, including the estimated cost for honoraria for each personnel based on man-hours to be spent in the project beyond the regular work hours; personnel efficiency should be a prime consideration in determining the man-hours required.

Despite upholding the disallowance, the Supreme Court absolved Abejo from liability to return the disallowed amount. The Court applied the Madera v. Commission on Audit rules, which provide that approving and certifying officers are not civilly liable if they acted in good faith, in the regular performance of official functions, and with the diligence of a good father of the family. The Madera ruling provides a definitive set of rules in determining the liability of government officers and employees:

Approving and certifying officers who acted in good faith, in regular performance of official functions, and with the diligence of a good father of the family are not civilly liable to return consistent with Section 38 of the Administrative Code of 1987.

The Court found that Abejo had acted in good faith because there was no prior disallowance of the same benefit against ICAB, and no precedent disallowing a similar case in jurisprudence. This decision underscores the importance of adhering to compensation limits for government officials, while also protecting those who act in good faith from personal liability. Lastly, the Court noted that the individual ICAB members who received the additional remuneration were not held liable in the ND, and this determination had already attained finality. The Court stated, “To disturb their exoneration is to violate the doctrine of immutability of final orders or judgments.”

FAQs

What was the key issue in this case?	The key issue was whether members of the Inter-Country Adoption Board (ICAB), who already received a per diem, could also be paid honoraria for reviewing applications, and whether the Executive Director could be held liable for the disallowed amounts.
What is a per diem?	A per diem is a daily allowance given to government officials to cover expenses incurred while performing official duties, such as attending meetings. It is meant to cover costs like transportation, meals, and lodging.
What are honoraria?	Honoraria are payments given as a token of appreciation for services rendered, typically for special or additional tasks. They are not considered a salary but rather a voluntary donation in consideration of services.
Why did the COA disallow the additional remuneration?	The COA disallowed the payments because they lacked legal basis, conflicted with Department of Budget and Management (DBM) Budget Circular No. 2003-5, and violated Section 5 of RA 8043, which limits compensation to a per diem.
What is the significance of DBM Budget Circular No. 2003-5?	DBM Budget Circular No. 2003-5 provides guidelines on the payment of honoraria and stipulates that individuals already receiving a per diem are not eligible to receive honoraria for the same services.
What did the Supreme Court rule regarding the disallowance?	The Supreme Court affirmed the COA’s decision, ruling that the additional remuneration was correctly disallowed because it violated RA 8043 and DBM BC No. 2003-5. The Court emphasized that the existing laws prevent the ICAB member from receiving additional compensation for the work they have done reviewing the PAPs Dossiers.
Why was the Executive Director absolved from liability?	The Executive Director, Bernadette Lourdes B. Abejo, was absolved from liability because the Court found that she had acted in good faith, with no prior disallowance of the same benefit and no precedent disallowing a similar case in jurisprudence.
What are the Madera Rules mentioned in the decision?	The Madera Rules, established in Madera v. Commission on Audit, provide a framework for determining the liability of government officers and employees in cases of disallowed benefits. They specify that those who act in good faith and with due diligence are not held civilly liable.
What was the Court’s ruling about the ICAB members who received the money?	The individual ICAB members who received the additional remuneration were not held liable in the ND, and this determination had already attained finality. To disturb their exoneration is to violate the doctrine of immutability of final orders or judgments

This case clarifies the importance of adhering to prescribed compensation limits for government officials. While acknowledging that additional responsibilities may warrant additional compensation, the ruling emphasizes that such compensation must be within the bounds of existing laws and regulations. The absolution of the Executive Director from personal liability underscores the protection afforded to public officials who act in good faith, even when errors in judgment occur.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: BERNADETTE LOURDES B. ABEJO VS. COMMISSION ON AUDIT, G.R. No. 251967, June 14, 2022