Dadole v. Commission On Audit, G.R. No. 125350, 3 December 2002

Dadole v.
Commission on Audit
G.R. No. 125350
3 December 2002
FACTS:
In 1986, the RTC and MTC judges of Mandaue City started receiving monthly allowances
of P1,260 each through the yearly appropriation ordinance enacted by the Sangguniang
Panlungsod of the said city. In 1991, Mandaue City increased the amount to P1,500 for each
judge.
On March 15, 1994, the Department of Budget and Management (DBM) issued Local Budget
Circular No. 55 (LBC 55) providing that: “allowances and other benefits to national government
officials and employees assigned in their locality, such additional allowances in the form of
honorarium at rates not exceeding P1,000.00 in provinces and cities and P700.00 in
municipalities “
Acting on the DBM directive, the Mandaue City Auditor issued notices of disallowance to herein
petitioners in excess of the amount authorized by LBC 55. Beginning October, 1994, the
additional monthly allowances of the petitioner judges were reduced to P1,000 each. They
were also asked to reimburse the amount they received in excess of P1,000 from April to
September, 1994.
Petitioner judges argue that LBC 55 is void for infringing on the local autonomy of Mandaue City
by dictating a uniform amount that a local government unit can disburse as additional
allowances to judges stationed therein. They maintain that said circular is not supported by any
law and therefore goes beyond the supervisory powers of the President. They further allege
that said circular is void for lack of publication.
On September 21, 1995, respondent COA rendered a decision denying petitioners motion for
reconsideration. COA maintains that the provisions of the yearly approved ordinance granting
additional allowances to judges are still prohibited by the appropriation laws passed by
Congress every year. COA argues that Mandaue City gets the funds for the said additional
allowances of judges from the Internal Revenue Allotment (IRA). But the General
Appropriations Acts of 1994 and 1995 do not mention the disbursement of additional
allowances to judges as one of the allowable uses of the IRA. Hence, the provisions of said
ordinance granting additional allowances, taken from the IRA, to herein petitioner judges are
void for being contrary to law.
ISSUE:
1. WON LBC 55 of the DBM is void for going beyond the supervisory powers of the
President and for not having been published and;
2. WON the yearly appropriation ordinance enacted by the City of Mandaue that provides
for additional allowances to judges contravenes the annual appropriation laws enacted
by Congress.
RATIO DECIDENDII:
1. Yes, Court declares LBC 55 to be null and void. Setting a uniform amount for the grant of
additional allowances is an inappropriate way of enforcing the criterion found in Section
458, par. (a)(1)(xi), of RA 7160. The DBM over-stepped its power of supervision over
local government units by imposing a prohibition that did not correspond with the law it
sought to implement. In other words, the prohibitory nature of the circular had no legal
basis. Furthermore, LBC 55 is void on account of its lack of publication, in violation of the
Court’s ruling in Tañada vs. Tuvera where it ruled that : Administrative rules and
regulations must also be published if their purpose is to enforce or implement existing
law pursuant to a valid delegation.
2. No, it does not contravene the annual appropriation laws enacted by Congress.
Respondent COA failed to prove that Mandaue City used the IRA to spend for the
additional allowances of the judges. There was no evidence submitted by COA showing
the breakdown of the expenses of the city government and the funds used for said
expenses. Just because Mandaue City’s locally generated revenues were not enough to
cover its expenditures, this did not mean that the additional allowances of petitioner
judges were taken from the IRA and not from the city’s own revenues.
Moreover, the DBM neither conducted a formal review nor ordered a disapproval of
Mandaue Citys appropriation ordinances, in accordance with the procedure outlined by
Sections 326 and 327 of RA 7160.
DECISION:
WHEREFORE, the petition is hereby GRANTED, and the assailed decision and resolution, dated
September 21, 1995 and May 28, 1996, respectively, of the Commission on Audit are hereby set
aside.

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