The Supreme Court (SC) has ruled that the Commission on Audit (CoA) cannot impose administrative penalties such as disallowances for irregularities that occur after government expenses have been incurred.

In a decision penned by Associate Justice Henri Jean Paul B. Inting, the SC en banc set aside a CoA disallowance against PhilHealth Region III officer Jess Christopher S. Biong.

The disallowance stemmed from payments made to Silicon Valley for printer inks and toners, which the CoA found irregular due to delayed delivery, lack of inspection reports and falsified supplies withdrawal slips.

While the CoA affirmed the irregularity of the payments, it also ruled that PhilHealth Region III had a valid obligation to pay Silicon Valley since the supplies were eventually received.

The audit body also found Biong civilly liable for the disallowance, citing his role in certifying the delivery of the items and failing to discover the falsified withdrawal slips.

However, the SC held that the CoA’s power to disallow government expenses is limited to preventing irregular use of funds at the time of the expense.

In this case, the court found that the irregularities involving the falsified withdrawal slips occurred after the transactions were completed, making disallowance improper.

The SC also said that the reasons cited by the CoA for the disallowance related to the management of office supplies, which are not proper grounds for disallowance. The court added that the nature of liability for disallowance is reimbursement or return for the loss suffered by the government.