When Presiding Officers Are Not Liable for Local Government Disallowances

The Supreme Court has clarified an important question in local government administration: when can a presiding officer of a provincial board be held personally liable for a disallowed government expenditure? In Cadiao v. Commission on Audit (G.R. No. 251995, January 26, 2021), the Court ruled that a vice-governor who merely attests to a resolution as presiding officer cannot automatically be held liable for a Notice of Disallowance (ND), absent proof of bad faith, malice, or gross negligence.

The case arose from a disallowance of ₱2,950,000.00 in financial assistance granted by the Province of Antique to the Liga ng mga Barangay for the insurance premiums of 590 Punong Barangays. The Commission on Audit (COA) disallowed the amount on several grounds, including that the insurance coverage was already provided by the Government Service Insurance System under the Local Government Code and that the expenditure was not among those chargeable to the 20% development fund.

The Facts

In 2008, the Sangguniang Panlalawigan (SP) of Antique passed Resolution No. 163A-2008, adopting Supplemental Budget No. 3 for fiscal year 2008. The budget included the financial assistance to the Liga ng mga Barangay. Rhodora J. Cadiao, then Vice-Governor of Antique, served as the SP's presiding officer and attested to the resolution's passage by affixing her signature.

When COA issued the ND, it named several persons liable, including Cadiao, the Provincial Governor, SP members, and provincial officers. The basis for holding Cadiao liable was her attestation and approval of the resolution as presiding officer. Several SP members appealed their inclusion, and the COA Regional Office eventually excluded those who abstained, voted against, or were absent during the voting.

The Issue

The central question was whether COA committed grave abuse of discretion in holding Cadiao personally liable for the disallowed amount, given that her participation was limited to her role as presiding officer who attested to the resolution's passage.

The Ruling

The Supreme Court ruled in favor of Cadiao, reversing COA's decision. The Court emphasized that under the Local Government Code, the vice-governor as presiding officer "shall vote only to break a tie." In this case, there was no tie—six members voted in favor, one against, and two abstained. The resolution received the required number of affirmative votes without needing the presiding officer's vote.

The Court rejected COA's argument that Cadiao's statements during the session, which expressed support for the financial assistance, showed active participation that influenced the votes. The Court held that the mere fact of being presiding officer does not automatically include a person among those liable for a disallowance. Liability requires a clear showing of bad faith, malice, or gross negligence.

The Court further explained that a mere signature attesting to a resolution's passage, without more, cannot be presumed to create liability. The presiding officer's attestation is part of the official functions of the position, and liability depends on the wrong committed, not solely on being the head of a government body.

The Timeliness Issue

The Court also addressed COA's argument that Cadiao's appeal was filed out of time. The Court ruled that because the COA Regional Office's decision modified the ND by excluding some persons from liability, the case was subject to automatic review by the COA Proper under the 2009 Revised Rules of Procedure. The ND therefore did not attain finality, and Cadiao's motion for reconsideration was timely.

Practical Takeaways

• A presiding officer of a local legislative body is not automatically liable for a disallowed expenditure merely because he or she attested to the resolution's passage.
• Liability for audit disallowances requires a showing of bad faith, malice, or gross negligence, not just the performance of official functions.
• The vice-governor's vote is contingent and arises only to break a tie under the Local Government Code.
• When a COA Regional Office decision modifies an ND, the case is subject to automatic review by the COA Proper, preventing the ND from becoming final and executory.
• Public officers should document their participation in legislative proceedings, including abstentions and votes against, to protect themselves from unwarranted liability.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.