MARINA vs COA, G.R. No.

185812, January 13, 2015

ISSUE: In case of disallowance, who should be liable to refund the amounts released?
RULING:
Section 103 of PD No. 1455 provides for a general liability for unlawful expenditures.
Expenditures of government funds or uses of government property in violation of law or regulations shall
be a personal liability of the official or employee found to be directly responsible therefor. Generally, the
public officers good faith does not excuse his or her personal liability over the unauthorized
disbursement.
However, with regard to the disallowance of salaries, emoluments, benefits, and allowances of
government employees, prevailing jurisprudence provides that recipients or payees need not refund these
disallowed amounts when they received these in good faith. Government officials and employees who
received benefits or allowances, which were disallowed, may keep the amounts received if there is no
finding of bad faith and the disbursement was made in good faith. On the other hand, officers who
participated in the approval of the disallowed allowances or benefits are required to refund only the
amounts received when they are found to be in bad faith or grossly negligent amounting to bad faith.