The Supreme Court has ruled that an appointment to a position within a local government unit (LGU) that is optional under the Local Government Code (LGC) requires a corresponding appropriation by the local sanggunian (legislative body) to be effective. This means that even if a mayor appoints someone to an optional position, like the Municipal Environment and Natural Resources Officer (MENRO), the appointment is not valid unless the sanggunian allocates funds for the position. This ruling underscores the importance of budgetary compliance in local governance and ensures that public funds are properly authorized for all LGU positions.

The Case of the Unfunded MENRO: Discretion vs. Fiscal Responsibility in Masiu

This case revolves around the appointment of Samad M. Unda as the Municipal Environmental and Natural Resources Officer (MENRO) for the Municipality of Masiu, Lanao del Sur. Outgoing Mayor Aminullah D. Arimao appointed Unda on March 8, 2007. However, after the 2007 local elections, the newly-elected Mayor Nasser P. Pangandaman, Jr., discovered that the LGU had been operating on a re-enacted budget from 2005 and had not enacted any annual budget for 2006 and 2007. Mayor Pangandaman also found that Unda, along with eight other municipal employees, were “midnight appointees” whose appointments were based on a non-existing budget. Consequently, their salaries were withheld, and the Mayor filed a petition for the annulment of their appointments with the Civil Service Commission (CSC).

The CSC Regional Office-Autonomous Region in Muslim Mindanao (CSCRO-ARMM) initially upheld Unda’s appointment, finding that he had satisfied the screening of the Personnel Screening Board (PSB) before the election ban. However, the CSC later reversed this decision, disapproving Unda’s appointment because the MENRO position was newly created under the unapproved 2006 annual budget, and because Unda had allegedly not passed the PSB screening. The Court of Appeals (CA) then reversed the CSC, reinstating the CSCRO-ARMM’s decision and declaring Unda’s appointment valid. The CA reasoned that Sections 443 and 484 of the LGC had created the position of MENRO, making the appointment not contingent on any resolution by the LGU.

The Supreme Court disagreed with the CA’s interpretation, emphasizing that while Section 443 of the LGC does list the MENRO position, it also specifies that the mayor may appoint such an officer. This permissive language indicates that the appointment is optional. The Court also highlighted the importance of Section 443(e) of the LGC, which states that “elective and appointive municipal officials shall receive such compensation, allowances and other emoluments as may be determined by law or ordinance, subject to the budgetary limitations.” This provision, coupled with Section 305(a) of the LGC, which mandates that “no money shall be paid out of the local treasury except in pursuance of an appropriations ordinance or law,” underscores the necessity of a budgetary allocation for the position.

The Court clarified that the creation of a public office is distinct from the budgetary requirements for filling that office. While the LGC authorizes the creation of the MENRO position, it does not automatically mandate that every municipality must have one, nor does it guarantee funding for the position. The municipality must still enact an ordinance allocating the budget for the office of the MENRO. The Court found that the Municipality of Masiu had not enacted an appropriation ordinance for the years 2006 and 2007, making Unda’s appointment ineffectual.

The respondent relied on Resolution No. 29 dated October 24, 2005, as the appropriation for his position. However, the Court emphasized the distinction between an ordinance and a resolution, quoting Municipality of Parañaque v. V.M. Realty Corporation:

“A municipal ordinance is different from a resolution. An ordinance is a law, but a resolution is merely a declaration of the sentiment or opinion of a lawmaking body on a specific matter. An ordinance possesses a general and permanent character, but a resolution is temporary in nature.”

The Court noted that Resolution No. 29 did not undergo the three readings required of an ordinance and therefore could not serve as a valid appropriation.

Furthermore, the Court noted that the Sangguniang Panlalawigan (Provincial Board) of Lanao del Sur did not review or approve the LGU’s budget for the fiscal year 2006. Section 56 of the LGC requires that every ordinance enacted by municipalities be forwarded to the sangguniang panlalawigan for review and approval. The lack of this review further undermined the validity of the purported appropriation. Additionally, the Municipal Budget Officer certified that there was no approved 2006 Annual Budget and that the 2005 budget, which did not include the MENRO position, was the last approved budget.

Despite the lack of a valid appointment, the Court acknowledged that Unda functioned as a de facto officer. A de facto officer is one who possesses an office and discharges their duties under color of authority, even if their appointment is irregular or informal. As a de facto officer, Unda’s actions were considered valid. The Court cited Zoleta v. Sandiganbayan (Fourth Division), explaining that a “de facto officer is one who is in possession of an office, and is discharging his duties under color of authority, by which is meant authority derived from an appointment, however irregular or informal, so that the incumbent is not a mere volunteer.” However, this status did not entitle him to the emoluments of the office due to the lack of a valid appropriation.

In conclusion, the Supreme Court reversed the Court of Appeals’ decision and reinstated the CSC’s ruling, emphasizing the importance of budgetary compliance in local government appointments. The ruling reinforces the principle that even when a position is authorized by law, a valid appropriation ordinance is necessary to make an appointment effective. This case serves as a reminder to LGUs to adhere strictly to the budgetary requirements outlined in the LGC to ensure the legality and validity of their appointments. Moreover, this ruling impacts not only the appointee but also the operations of the LGU by highlighting the importance of the separation of powers and responsibilities of the Mayor and the Sangguniang Bayan.

FAQs

What was the key issue in this case?	The key issue was whether Samad M. Unda’s appointment as the Municipal Environment and Natural Resources Officer (MENRO) was valid, considering the lack of an approved annual budget for the position.
What is a Municipal Environment and Natural Resources Officer (MENRO)?	A MENRO is a local government official responsible for environmental and natural resource management within a municipality. The position is optional, meaning the local government has the discretion to appoint someone to it.
What is the Local Government Code (LGC)?	The LGC is a law that governs the structure and functions of local government units in the Philippines, including provinces, cities, municipalities, and barangays. It outlines the powers, duties, and responsibilities of local officials and legislative bodies.
What is the role of the Sangguniang Bayan in local appointments?	The Sangguniang Bayan is the legislative body of a municipality, and they must approve the budget for any position, even if the mayor appoints them. The LGC requires concurrence from the Sangguniang Bayan for certain appointments, ensuring a check on the mayor’s power.
Why was Resolution No. 29 deemed insufficient as an appropriation?	Resolution No. 29 was deemed insufficient because it was a resolution, not an ordinance, and it did not undergo the three readings required for an ordinance. Under the LGC, appropriations must be made through an ordinance, which carries the force of law.
What is a de facto officer?	A de facto officer is someone who holds a position and performs its duties under the apparent authority of an appointment, even if the appointment is later found to be invalid. Their actions are generally considered valid to protect the public interest.
What is the significance of Section 443 of the LGC in this case?	Section 443 of the LGC specifies the officials of the municipal government and indicates which positions the mayor ‘may’ appoint, including the MENRO. This section was interpreted to mean that the MENRO position is optional and requires a corresponding budget allocation.
What happens if a local government unit does not have an approved budget?	If a local government unit does not have an approved budget, it generally operates on a re-enacted budget from the previous year. However, new positions cannot be created or funded without a new budget ordinance.
What is an appropriation ordinance?	An appropriation ordinance is a law passed by the local legislative body (Sangguniang Bayan) that authorizes the expenditure of public funds for specific purposes. It is required to allocate funds for the salaries and benefits of local government officials and employees.

This case highlights the critical interplay between the power of appointment and the necessity of budgetary allocation in local governance. The Supreme Court’s decision underscores the importance of adhering to the Local Government Code to ensure the proper and legal functioning of municipal governments. The case also serves as a reminder of the need for transparency and accountability in local government appointments and financial management.

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: CIVIL SERVICE COMMISSION vs. SAMAD M. UNDA, G.R. No. 213331, September 13, 2017