GOVERNMENT SERVICE INSURANCE SYSTEM, petitioner, vs.

COMMISSION ON AUDIT, respondent.

G.R. No. 138381

April 16, 2002

Ponente: YNARES-SANTIAGO, J.:

FACTS:
GSIS seeks the annulment of the COA decision affirming the resident
auditors disallowance of monetary benefits granted to or paid by GSIS in
behalf of its employees.
After the effectivity of RA 6758 petitioner GSIS increased the benefits
for its personnel, but the GSIS Corporate Auditor disallowed the said
allowances and benefits without the necessary authorization required under
the Corporate Compensation Circular No. 10. GSIS appealed before the
COA, which affirmed the decision of its representative.
GSIS filed a motion for reconsideration of the COA decision, invoking
the ruling in De Jesus, et al. v. COA and Jamoralin.9 Corporate
Compensation Circular No. 10 (CCC No. 10) was declared to be of no legal
force or effect due to its non-publication in the Official Gazette or a
newspaper of general circulation. In view of this development, GSIS posited
that the questioned disallowances no longer had any leg to stand on and
that COA should consequently lift the disallowances premised on CCC No.
10.
Hence, this petition.
ISSUE:
Whether COA erred in its decision.
HELD:
We need not delve lengthily into this submission as this was earlier
laid to rest by the Court in Philippine International Trading Corporation
(PITC) v. COA,25 where we held that "the repeal by Section 16 of RA 6758
of 'all corporate charters that exempt agencies from the coverage of the
system' was clear and expressed necessarily to achieve the purposes for
which the law was enacted, that is, the standardization of salaries of all
employees in government owned and/or controlled corporations to achieve

'equal pay for substantially equal work'."26 As things now stand, GSIS is
already exempt from salary standardization by express provision of R.A.
829127 a subsequent enactment approved on May 30, 1997 which
amended the Revised GSIS Charter. But since GSIS was still governed by
the latter at the time the increase in benefits were disallowed in audit, GSIS
was then yet covered by the Salary Standardization Law, thereby making
our ruling in PITC presently relevant and applicable.
Petitioner GSIS did not squarely address the above finding of
respondent COA or the Corporate Auditor. Instead, it based its arguments
on the general assumption that all the benefits and allowances subject of
this petition were disallowed on the basis of Section 12, R.A. No. 6758 and
its implementing rules. This is beside the point, however, as it can readily
be seen that respondent COA's ruling on the loyalty and service cash award
is actually based on a purported CSC declaration relative thereto. As a
result, there has been no real joinder of issues as far as these benefits are
concerned.
Coming now to G.R. No. 141625, the Court of Appeals did not commit
any reversible error when it held that the petition filed before the GSIS
Board questioning the legality of the deductions could proceed
independently from the appeal brought by petitioner GSIS from the COA
disallowances. No error could be attributed to the appellate court's finding
that there was no identity of subject matter or issue between the COA
proceedings and the retirees' claim before the GSIS Board.