The Supreme Court has dismissed the Petition for Certiorari filed by Sumiton, a former Community Affairs Officer I of the National Commission on Indigenous Peoples (NCIP), and affirmed the Commission on Audit (COA) decision upholding Notices of Disallowance totaling PHP 2,028,400.00 covering cash advances and reimbursements related to the Free, Prior and Informed Consent (FPIC) process.
The Case
Sumiton was assigned to the NCIP's Zamboanga del Norte Provincial Office and was designated by the NCIP as Team Leader to conduct the FPIC process for several projects: (1) the Aurora-Polanco 138 kV Transmission Line Project with the National Grid Corporation of the Philippines as proponent; (2) APSA 122-IX and APSA 123-IX with the Masada Resources and Mining Corporation as proponent; and (3) AFTAA-13 IX with TVI Mineral Resources Phils., Inc. as proponent.
Several cash advances were granted to Sumiton between February and June 2011 to enable him to perform the FPIC process, totaling PHP 2,028,400.00. After the conclusion of the FPIC process, Sumiton proceeded to liquidate all cash advances and reimbursements, allegedly submitting the required documents to the NCIP Regional Office Accounting Section.
Upon audit, Notices of Suspension were issued citing deficiencies including missing duly approved Work and Financial Plans, missing approved FPIC team compositions, missing duly approved bonds, and incomplete supporting documents for various expenditures. Sumiton wrote correspondences in May and July 2012 communicating his compliance and stating he had already submitted liquidation reports to the Accounting Section.
The COA National Government Sector Cluster 1 (COA NGS) issued a Decision dated December 19, 2016 upholding the Notices of Disallowance. The COA Commission Proper, in its Decision dated December 21, 2018, dismissed Sumiton's Petition for Review for having been filed out of time and for lack of merit, affirming the COA NGS decision. The COA issued a further Resolution dated January 28, 2025 affirming its earlier decision.
The Issue
Among the questions before the Court was whether the FPIC deposit fees collected under Section 13 of NCIP Administrative Order No. 3-2002 constitute public funds subject to the COA's audit jurisdiction, including exposure to disallowance and the imposition of personal liability.
The Ruling
The Supreme Court dismissed the petition. The Court declared that the FPIC deposit fees under Section 13 of NCIP AO No. 3-2002 are public funds in the nature of government trust or depository funds and fall within the COA's audit jurisdiction, covering proper estimation and collection, proper disbursement for FPIC purposes only, and proper refund and accounting of any unspent balance.
The Court's dispositive portion reads: "ACCORDINGLY, the Petition for Certiorari is DISMISSED. The Decision, dated December 21, 2018, of the Commission on Audit-Commission Proper, dismissing the Petition for Review for having been filed out of time and for lack of merit, thus affirming the Decision of the Commission on Audit National Government Sector—Cluster 1, dated December 19, 2016, which affirmed the Notices of Disallowance Nos. 12-008-101(11), dated January 13, 2012, 12-028-101(11) and 12-029-101(11), both dated October 3, 2012; and 12-028A-101(11), 12-029A-101(11), 12-030-101(11), and 12-031-101(11), all dated October 4, 2012, on the reimbursement of expenses and various cash advances in the total amount of PHP2,028,400.00 is AFFIRMED."
By the Numbers
- Total amount disallowed: PHP 2,028,400.00
- Largest single cash advance: PHP 670,050.00 (June 13, 2011, for Consensus Building Process and Freedom Period, TVI Mineral Resources Phils., Inc.)
- Earliest cash advance: PHP 100,305.00 (February 17, 2011, Masada Resources and Mining Corporation)
- Number of Notices of Disallowance: 7
- COA NGS Decision date: December 19, 2016
- COA Commission Proper Decision date: December 21, 2018
- COA Resolution date: January 28, 2025
The Court's Reasoning
The Court held that once the NCIP officially receives fees required under NCIP AO No. 3-2002, such amounts must be accounted for as government funds, having come into the possession of a government agency for the fulfillment of a governmental function — the conduct of the FPIC process. The Court further held that the NCIP exercises effective and exclusive control over the use and disposition of FPIC funds, encompassing the authority to approve, direct, certify, disburse, and liquidate expenditures, powers vested solely in NCIP officers.
The Court stated that the mandatory requirements that FPIC deposits be properly documented, liquidated, and audited, and that any unspent balance be returned, do not diminish government control but instead affirm that the funds are received and held in an accountable capacity. The Court also noted that Section 13(d) of NCIP AO No. 3 itself treats the collection of FPIC fees on cost estimates made without sufficient basis as an act of illegal exaction — an offense that may be committed only by a public officer acting in an official capacity — underscoring that FPIC fee collection is regarded by the law itself as a public, governmental act.
The decision in G.R. No. E-02865 was penned by Associate Justice Fivomena D. Singh.
This report summarizes a public Supreme Court decision and is not legal advice.