The Supreme Court has ruled that a public official cannot be held liable for disallowed transactions solely based on their position. Liability requires a clear showing of bad faith, malice, or gross negligence. This decision protects officials who act in good faith and without direct involvement in questionable transactions, ensuring that accountability is fairly applied based on individual actions and responsibilities.

When Oversight Isn’t Enough: Can a Governor Be Liable for Subordinates’ Actions?

This case revolves around Zaldy Uy Ampatuan, the former Regional Governor of the Autonomous Region in Muslim Mindanao (ARMM), who was held liable by the Commission on Audit (COA) for disallowed disbursements made by his subordinate. The COA found irregularities in cash advances taken by Adham G. Patadon, ORG-ARMM’s Chief-Supply Division/Special Disbursing Officer, for the purchase of office supplies and relief goods from a supermarket called Superama. The total disallowed amount was P79,162,435.00. Ampatuan was held liable for failing to monitor Patadon’s activities and ensure that government resources were managed according to the law.

The COA’s decision was based on the premise that as the head of the ORG, Ampatuan was responsible for ensuring that all resources were managed and utilized in accordance with the law. However, Ampatuan argued that his right to due process was violated because he was already incarcerated during the COA proceedings and relied on his counsel, who allegedly did not adequately present his defense. He also claimed that he had no direct participation in the transactions and that his signatures on relevant documents were either obtained without explanation or were electronic signatures used without his consent.

The Supreme Court, while acknowledging the procedural lapses in Ampatuan’s filings, decided to give due course to the petition in the interest of substantial justice. The Court emphasized that the COA’s decision to hold Ampatuan liable was not based on law and evidence, but on his position as Regional Governor. The Supreme Court underscored that holding a public officer liable requires more than just their position; it necessitates a clear demonstration of their direct involvement, bad faith, malice, or gross negligence.

Building on this principle, the Supreme Court cited Section 103 of Presidential Decree (PD) No. 1445, which explicitly states that expenditures of government funds in violation of law or regulations shall be a personal liability of the official or employee found to be directly liable therefor. This provision, along with Section 52 of the Administrative Code of 1987, reinforces that liability should be directly tied to the individual’s actions and responsibilities. Similarly, Section 38 of the same Code clarifies that a superior officer is not civilly liable for the wrongful acts of subordinates unless they have specifically authorized the act in writing.

The COA’s own regulations, as outlined in COA Circular No. 81-156 and COA Circular No. 2009-006, also emphasize the importance of assessing liability based on the individual’s participation in the transaction. These circulars specify that the liability of public officers should be determined based on the nature of the disallowance, their duties and responsibilities, the extent of their participation, and the amount of damage or loss to the government. This approach contrasts with the COA’s initial ruling, which appeared to solely rely on Ampatuan’s position as Regional Governor.

The Supreme Court, in its analysis, also pointed to the presumption of good faith and regularity in the performance of official duties enjoyed by public officials. To overcome this presumption, manifest bad faith, malice, or gross negligence must be proven. The Court defined these terms, noting that “evident bad faith” implies a palpably fraudulent and dishonest purpose, while gross negligence is characterized by the want of even slight care or a flagrant refusal to perform a duty. In this case, there was no evidence to suggest that Ampatuan acted with such malice or negligence.

Moreover, the Supreme Court highlighted that Ampatuan had no direct involvement in the approval or authorization of the disallowed disbursements. None of the documents related to the transactions were approved or signed by him. The COA’s findings indicated that Patadon, as the ORG-ARMM’s Chief-Supply Division/Special Disbursing Officer, carried out the disallowed expenditures with the approval and certification of other ORG officers. There was no evidence of conspiracy or confederation between Ampatuan and these officers.

The Supreme Court referenced several previous cases, including Joson III v. COA, Cadiao v. COA, Estalilla v. COA, and Lanto v. COA, to further illustrate the principle that liability should not be automatically assigned based on position. In these cases, public officers who had some level of participation in the disallowed transactions were absolved of liability due to the absence of bad faith, malice, or gross negligence. In the case of Ampatuan, where there was no participation or knowledge of the transactions, the Court found even stronger grounds for absolution.

Ultimately, the Supreme Court concluded that the COA gravely abused its discretion in sustaining Ampatuan’s civil liability in the ND. The Court emphasized that the public officer’s position alone is insufficient to make them liable for the disallowed amount. The Supreme Court’s decision in this case underscores the importance of a nuanced approach to accountability in governance. It clarifies that public officials cannot be held liable for the actions of their subordinates unless there is a clear showing of bad faith, malice, or gross negligence on their part. This ruling protects officials who act in good faith and ensures that liability is fairly applied based on individual actions and responsibilities.

FAQs

What was the key issue in this case?	The key issue was whether a public official could be held liable for disallowed transactions solely based on their position, without evidence of direct involvement, bad faith, malice, or gross negligence.
What was the COA’s initial ruling?	The COA initially held Zaldy Uy Ampatuan liable for disallowed disbursements made by his subordinate, citing his failure to monitor activities and ensure compliance with regulations as the Regional Governor of ARMM.
What did the Supreme Court decide?	The Supreme Court reversed the COA’s decision, ruling that Ampatuan could not be held liable because there was no evidence of his direct involvement, bad faith, malice, or gross negligence in the disallowed transactions.
What legal principle did the Court emphasize?	The Court emphasized that liability for disallowed transactions should be based on individual participation and wrongdoing, not solely on the public official’s position.
What is the significance of ‘good faith’ in this case?	The Court highlighted the presumption of good faith in the performance of official duties, stating that public officials should not be held liable unless there is clear evidence to overcome this presumption.
What COA circulars are relevant to this case?	COA Circular No. 81-156 and COA Circular No. 2009-006 are relevant as they outline the guidelines for determining the liability of public officers in relation to audit disallowances.
How does this ruling affect other public officials?	This ruling protects public officials who act in good faith and without direct involvement in questionable transactions, ensuring that accountability is fairly applied based on individual actions and responsibilities.
What evidence was lacking in this case?	There was no evidence that Ampatuan approved, authorized, or had knowledge of the disallowed transactions. There was also no proof of conspiracy or confederation with the officers who carried out the transactions.

The Supreme Court’s decision in Ampatuan v. COA serves as a crucial reminder that accountability in governance must be grounded in evidence and individual culpability, not merely on hierarchical position. This ruling safeguards public officials who act in good faith, ensuring that they are not unfairly penalized for the actions of their subordinates without a clear showing of wrongdoing.

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: HON. ZALDY UY AMPATUAN, FORMER REGIONAL GOVERNOR, AUTONOMOUS REGION IN MUSLIM MINDANAO, PETITIONER, VS. COMMISSION ON AUDIT, RESPONDENT., G.R. No. 252007, December 07, 2021