Veloso vs.

COA
G.R. No. 193677, Sept. 6, 2011

Facts: On December 7, 2000, the City Council of Manila enacted Ordinance No. 8040 entitled An
Ordinance Authorizing the Conferment of Exemplary Public Service Award to Elective Local Officials of
Manila Who Have Been Elected for Three (3) Consecutive Terms in the Same Position. On August 8,
2005, Atty. Gabriel J. Espina (Atty. Espina), Supervising Auditor of the City of Manila, issued Audit
Observation Memorandum (AOM) No. 2005-100(05)07(05) stating that Ordinance No. 8040 is without
legal basis and the amount granted as monetary reward is excessive and tantamount to double
compensation. After evaluation of the AOM, the Director, Legal and Adjudication Office (LAO)-Local of
the COA issued a Notice of Disallowance.
The COA opined that the monetary reward under the EPSA is covered by the term
compensation. Though it recognizes the local autonomy of LGUs, it emphasized the limitations thereof
set forth in the Salary Standardization Law (SSL). It explained that the SSL does not authorize the grant
of such monetary reward or gratuity. It also stressed the absence of a specific law passed by Congress
which ordains the conferment of such monetary reward or gratuity to the former councilors.

Issue: Does Manila Ordinance No. 8040, which authorized the conferment to the former three-term
councilors retirement and gratuity pay remuneration, a valid exercise of the powers of the Sangguniang
Panlungsod?

Ruling: No. Section 458 of RA 7160 defines the power, duties, functions and compensation of the
Sangguniang Panlungsod and in the exercise of this power, the City Council of Manila enacted on
Ordinance No. 8040. However, the above power is not without limitations. These limitations are
embodied in Section 81 of RA 7160. Moreover, the IRR of RA 7160 reproduced the Constitutional
provision that no elective or appointive local official or employee shall receive additional, double, or
indirect compensation, unless specifically authorized by law, nor accept without the consent of the
Congress, any present, emoluments, office, or title of any kind from any foreign government.
Undoubtedly, the computation of the awardees' reward is excessive and tantamount to double
and additional compensation. This cannot be justified by the mere fact that the awardees have been
elected for three (3) consecutive terms in the same position. Neither can it be justified that the reward is
given as a gratuity at the end of the last term of the qualified elective official. The fact remains that the
remuneration is equivalent to everything that the awardees received during the entire period that he
served as such official. Indirectly, their salaries and benefits are doubled, only that they receive half of
them at the end of their last term.