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Spending under a re-enacted
budget
The case of Villanueva et
al. vs. Ople, et al., November 18, 2005
Villanueva vs. Ople deals with Section 323 of the Local Government
Code of 1991 on the automatic re-enactment of the previous year’s
appropriations ordinance in the event the sanggunian fails to pass
the ordinance authorizing the annual appropriations at the
beginning of the ensuing fiscal year. From this case, our local
government officials may learn a lesson or two on how to avoid
being indicted of graft and corruption for failing to comply with
that clear and unambiguous provision of the code.
The case stemmed from a joint complaint-affidavit filed by
Villanueva et al. against Ople and Contreras, Mayor and
Vice-Mayor, respectively, of Hagonoy, Bulacan before the Office of
the Deputy Ombudsman for Luzon on February 2004. Complainants
Villanueva et al. sought the indictment of Ople and Contreras for
graft and corruption for making illegal disbursements. They
theorized that since the proposed budget was submitted by Mayor
Ople to the Sangguniang Bayan only on June 2003, all disbursements
made from January of that year until the date of submission of the
budget were illegal. They claimed that said expenditures were
attended by evident bad faith and/or gross negligence that caused
undue injury to the municipality.
Complainants’ theory, however, failed to elicit a favorable
resolution from the Office of the Deputy Ombudsman for Luzon. It
dismissed the complaint for lack of probable cause.
When the issue was elevated to the Supreme Court, complainants
received a similar response. The Court ruled that the deputy
ombudsman did not commit grave abuse in dismissing the case.
Paragraph 1 of Section 323 provides that: In case the sanggunian
concerned fails to pass the ordinance authorizing the annual
appropriations at the beginning of the ensuing fiscal year, it
shall continue to hold sessions, without additional remuneration
for its members, until such ordinance is approved, and no other
business may be taken up during such sessions. If the sanggunian
still fails to enact such ordinance after ninety (90) days from
the beginning of the fiscal year, the ordinance authorizing the
appropriations of the preceding year shall be deemed reenacted and
shall remain in force and effect until the ordinance authorizing
the proposed appropriations is passed by the sanggunian concerned.
However, only the annual appropriations for salaries and wages of
existing positions, statutory and contractual obligations, and
essential operating expenses authorized in the annual and
supplemental budges for the preceding year shall be deemed
reenacted and disbursement of funds shall be in accordance
therewith.
In agreeing with the decision of the deputy ombudsman to dismiss
the case, the Court cited several reasons: (1) the mere failure of
the local government to enact a budget did not make all its
disbursements illegal; (2) Section 323 states that only the annual
appropriations for salaries and wages, statutory contractual
obligations, and essential operating expenses are deemed
reenacted. Villanueva et al. failed to identify disbursements that
had gone beyond this coverage. And (3) Villanueva et al. failed to
substantiate their allegations that the government had suffered
undue injury.
