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D. Commission of Audit Section 1. Qualifications; Term MISON v. COA (187 SCRA 445) FACTS:  Salvador M.

Mison, in his capacity as Commissioner of Customs.  Commissioner of Customs rendered a decision on August 11, 1969, declaring illegal the seizure by elements of the Philippine Navy of the M/V "Hyojin Maru" a vessel of Japanese registry, and ordered the release of the vessel and its cargo to the claimants, Chan Chiu On and Cheung I.  Return of the cargo as thus ordered was effected.  Release of the vessel, however, was never effected; it sank while yet in the custody of the Bureau of Customs, and requests by the Bureau to the Philippine Navy and the CADA to refloat or salvage the ship could not be complied with for lack of funds.  Chan Chiu On and Cheung I then filed a claim with the Commission of Audit for the payment of the value of the vessel.  Acting thereon Mr. Rogelio B. Espiritu, Manager, Technical Service Office of the COA, denied the claim for the reasons set forth in his registered letter to the claimant's lawyer Atty. David who moved for reconsideration by letter dated February 6, 1978.  Acting COA Chairman Tantuico denied the motion, in his own letter dated April 17, 1978 on the ground that it had been filed beyond the reglementary period of 30 days from the date of receipt of a copy of the subject Decision which, in consequence, had "already become final and executory."  Later the Commission on Audit having been fully constituted with the appointment of the Chairman and two (2) members, Chairman Eufemio C. Domingo, acting "FOR THE COMMISSION," reconsidered the assailed decision and declared that the vessel sank while in illegal custody of the Bureau of Customs, which "should have pre-eminently taken adequate measures to preserve" it but did not; hence, he declared that "this Commission will interpose no objection" to the instant claim, subject to the usual auditing and accounting requirements." ISSUE: Whether Espiritu (Manager of the Technical Service of the COA) may validly make a decision for COA as acting chairman. HELD:  NO. The "Espiritu decision" was void ab initio and cannot be ratified by the Acting COA Chairman.  As manager of the COA Technical Service Office, Mr. Espiritu obviously had no power whatever to render and promulgate a decision of or for the Commission.  Indeed, even the Chairman, alone, had not that power.

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As clearly set out in the Constitution then in force, the power was lodged in the Commission on Audit, "composed of a Chairman and two Commissioners." It was the Commission, as a collegial body, which then as now, had the jurisdiction to "decide any case brought before it within sixty days from the date of its submission for resolution," subject to review by the Supreme Court on certiorari. The Espiritu Decision was not merely "technically invalid," as the petitioner describes it. It was substantively void ab initio, because rendered without jurisdiction. The decision of Chairman Domingo was binding as he was validly representing the Commission.

000 board feet of lumber stipulated in the agreement. the contract be carried out by the immediate delivery of the P350. and the latter thereafter appealed to this Court. pure and simple. HELD:   NO. the most . it became evident that it was not feasible for the Bureau of Prisons to deliver the lumber. ISSUE: Whether the Auditor General’s jurisdiction extend over private moneyed claims. and this official. the latter sought of the opinion of the Secretary of Justice. Inc.. etc. held that inasmuch as the contract entered into was one of barter. AUDITOR (94 PHIL 868) FACTS:  Petitioner Philippine Operations. v. INC. with a diesel fuel engine. Then the Director of Prisons offered to deliver the first installment of sawed lumber after 30 days. Commonwealth Act No. or cases where the liability of the government or its non-liability is in issue because in these cases. plus P35. the Auditor General denied the petitioner's claim.000 be paid to it.  The petitioner proposed different ideas as to finally liquidate the obligations of the Bureau of Prisons however they were unsuccessful as they could not come into terms. the demand of the petitioner for P70. 3038 granting the Auditor General power upon “any moneyed claim involving liability arising from contract.000 board feet of sawed lumber. and (2) two LCMs in good turning condition.000 should be denied. and not one of purchase and sale. the attorney for the petitioner filed a claim with the Auditor General. This offer was rejected by the petitioner on the ground that the offer to deliver the lumber came too late. and it demanded that cash payment of P70. in exchange for 350. the sawmill was not in good running condition and that some parts were missing but the petitioner’s manager agreed to reimburse the Bureau of Prisons for whatever expenses the latter may incur in putting the equipment in good running condition.  Thus.000 for damages suffered. complete. obviously due to the delay in the installation of the sawmill.  Upon the presentation of the claim with the Auditor General.  However.  Later. and that instead in view of the willingness of the Bureau of Prisons to perform its part of the obligation. General Function. entered into a barter agreement with the Respondent Bureau of Prisons whereby it agreed to deliver to the Bureau: (1) a sawmill. express or implied.. Powers PHILIPPINE OPERATIONS.  On the basis of this opinion.Section 2. a stop saw edge and log turner. and as no money consideration ever entered the minds of the parties at the time of the agreement. which could serve as a basis for civil action between private parties” could not have contemplated unliquidated claims.

dismissing petitioner’s complaint without prejudice to the filing of the proper money claim with the COA. important questions to be determined are judicial in nature.  In its answer. Phil.”  Respondent filed a motion to dismiss the complaint on the ground that the primary jurisdiction over petitioner’s money claim was lodged with the Commission on Audit (COA).  That as it did arise from a series of procurement transactions with the province. specialized training and knowledge of an administrative body. . Finding the motion to be well-taken. Euro-Med Laboratories. as a delegation of judicial power to an executive officer. Inc.662. v.. with an unpaid balance of P487. Phil. involving the examination of evidence and the use of judicial discretion. HELD:  YES. ISSUE: Whether the COA and not the RTC which has primary jurisdiction to pass upon petitioner’s money claim against the Province of Batangas. the RTC issued on March 7. and that was within the exclusive domain of COA to make. but these proved fruitless.. Respondent argued that the case called for a determination of whether these provisions and rules were complied with.  Respondent alleged that some payments it had already made were not reflected in the computation set forth in the complaint and that it was continuously exerting genuine and earnest efforts "to find out the true and actual amount owed. relief must first be obtained in an administrative proceeding before resort to the courts is had even if the matter may well be within their proper jurisdiction.80. To assume that the legislature granted this jurisdiction to an administrative officer like the Auditor General is not warranted. including setting up several dialogues with plaintiff’s representatives. experience and expertise of most judges but within the special competence of COA auditors and accountants. because it would amount to an illegal act.  The doctrine of primary jurisdiction holds that if a case is such that its determination requires the expertise. denying only those relating to the unpaid balance supposedly still due petitioner. Province of Batangas (495 SCRA 601) FACTS:  Province of Batangas purchased various Intravenous Fluids (IVF) products from the Euro-Med Laboratories. Inc. was governed by the Local Government Code provisions and COA rules and regulations on supply and property management in local governments.  Such matters are not within the usual area of knowledge. 2001 an order.  Euro-Med made several demands for defendant to pay its accountabilities. respondent admitted most of the allegations in the complaint.

for the RTC to dismiss petitioner’s complaint. and to audit.  To hold otherwise would be to arrogate unto the Office of the Auditor General the power which pertains to the judicial branch of the government. unnecessary. it was but proper. The ascertainment of whether a crime committed and by whom is definitely another. in accordance with law and administrative regulations" all expenditures of funds or property pertaining to or held in trust by the government as well as the provinces or municipalities thereof. ISSUE: Whether the Fiscal may validly institute an investigation to determine if there is criminal liability after COA has done its part. or extravagant."  It is their contention that under the above. then the Commanding General. Thus. the Auditor General. but from the independent determination of the Ombudsman. audit and settle all accounts pertaining to the revenues and receipts from whatever source. The authority of the Fiscal to investigate whether a criminal act has been committed or not in the disbursement of public funds. That is one thing. as noted. . it is incumbent on the Auditor General to determine whether criminal responsibility for the anomaly discovered in the courage of his audit or examination of the accounts lies. out of fidelity to the doctrine of primary jurisdiction. who have already approved the related vouchers used in the alleged malversation. but also to audit or investigate and "bring to the attention of the proper administrative officer expenditures of funds or property which in his opinion are irregular. Rizal. Fort Bonifacio. Aquino. official and commercial documents imputed to them by the other respondent. Clearly then. Philippine Army. is vested with the power to examine. excessive.  It was however opposed on the ground that under the Constitution. Romeo Espino. wanted to conduct the preliminary investigation of the alleged commission of malversation through falsification of public. Benjamin H. and finally of the Courts to try any person involved in the alleged malversation of public funds is not curtailed or in any way divested by the administrative findings of the Auditor General. Aquino (39 SCRA 236) FACTS:  Then Provincial Fiscal of Rizal. a finding of probable cause does not derive its veracity from the findings of the COA. is not only vested with the duty to examine or audit all expenditures of funds of the Government.  The Auditor General.  The fact that petitioners' accounts and vouchers had passed in audit is not a ground for enjoining the provincial fiscal from conducting a preliminary investigation for the purpose of determining the criminal liability of petitioners for malversation. Ramos v. HELD:  YES.

by reducing the number and changing the composition of the PCA Governing Board to seven (7) members only. As a result of the initial findings of the Performance Audit Office with respect only to the petitioners. the President issued Presidential Decree No. as amended. HELD:  NO. In cases involving specialized disputes. The petitioners alleged that the supposed overpayments and/or deficiencies in their remittances were due to the Acting COA Chairman's refusal to recognize the validity of the two resolutions passed by the then Governing Board of the PCA. which include herein petitioners.    The respondent Acting Chairman of the Commission on Audit initiated a special audit of coconut end-user companies. Tantuico. is COA.    In the meantime. the Philippine Coconut Authority. 276 establishing a coconut stabilization fund. with respect to their Coconut Consumers Stabilization Fund levy collections and the subsidies they had received. After such promulgation but before the PCA Board was formally reorganized under PD 623. are levy-collectors and remitters. the Administrator. . I.Blue Bar Coconut Philippines v. 163 SCRA 716 FACTS:  Petitioners are all copra exporters. 623 further amending Presidential Decree No. L and N of petition) to collect the short levies and overpaid subsidies from the CCSF. The petitioners also question the respondents' authority to audit them. oil millers and desiccators referred to as end-users and as such. the PCA Board issued two resolutions decreasing the amount of levy and deferring the collection of the leview.  Then.  In view of the above considerations. and the Military Supervisor of PCA and the Manager of the Coconut Consumers Stabilization Fund. the trend has been to refer the same to an administrative agency of special competence which in this case. on December 26. the President issued Presidential Decree No. ISSUE: Whether petitioners are outside the ambit of COA’s audit power. respondent Acting COA Chairman directed the Chairman. we apply the principle of primary jurisdiction.  Then President of the Philippines issued Presidential Decree No. 1974. and to apply subsidy claims to the settlement of short levies should the petitioners fail to remit the amount due. J. in various letters to them (Annexes G-2 H. to impose levy on the sale of copra which shall be deposited with the Philippine National Bank or any other government bank for the account of the Coconut Consumers Stabilization Fund (CCSF) as a separate trust fund which shall not form part of the general fund of the government. Under this decree. 232 creating a Philippine Coconut Authority.  The Constitution formally embodies the long established rule that private entities who handle government funds or subsidies in trust may be examined or audited in their handling of said funds by government auditors. 232.

Since the project keeps on falling behind the agreed schedule of completion. Crystal clear from the records is that the nature of the terminal phase of the DagatDagatan project does not require the expertise of a foreign consultant. The NHA then had three supplemental contracts with KFW of Germany as well as with Engr.  The power of the Commission on Audit to audit and examine government expenditures is enshrined in Section 2 (1). Murdoch of Kinhill Pty. unnecessary. Article IX-D of the 1987 Constitution. Kinhill from Australia. a foreign corporation organized under the laws of Australia. HELD:  NO. The Assistant Commissioner of the Technical Service Office of COA disallowed the supplemental contract on the basis that the “The Dagat-Dagatan Project was in its finishing stage." There can be no dispute on the proposition that the continued extension of the services of Engr. ISSUE: Whether the COA acted beyond its constitutionally granted powers by disallowing a duly entered contract. hence a loan and Project Agreement was executed between the Republic of the     Philippines as "Borrower" and the National Housing Authority (NHA) as "Project Sponsor" on the one hand. with all the formalities of law. Murdoch as a foreign consultant constitutes at the very least an unnecessary expense. (Kinhill). regular. and the Kreditanstalt Fur Weideraufbau (KFW) on the other hand. requires simple engineering advisory services that can be undertaken by NHA or DPWH in-house technical staff or at the most a local consultant. or uses of government funds and properties. extravagant. or unconscionable expenditures. It has also been the policy of the courts not to ignore or reject as incorrect the acts and determinations of administrative agencies unless there is a clear showing of arbitrary action or palpable and serious error. They hired the services of Engineer Brian W.  .  The Constitution also granted to COA the power to "promulgate accounting and auditing rules and regulations. including those for the prevention and disallowance of irregular. Kanhill’s services would also be extended. COA. valid. Ltd. the loan was extended provided that Engr. NHA v. excessive. for Urban Housing Dagat-Dagatan Project II A/B. 226 SCRA 55 FACTS:  Our government forged an agreement on financial cooperation with the Republic of Germany.

a private carpenter and electrician on "pakyao" basis for the renovation and improvement of the Bureau of Treasury Office. On three occasions petitioner. hence.   ISSUE: Whether the disallowances by COA are invalid for being usurpation of a management function an impairment of contract.574.  However. and Layson’s additional skill as an electrician and plumber was not adequately considered. Praxedio P. by reducing the latter's daily rate from P40.00 per day to P18.  Recourse to a "pakyao" labor contract. was the former Acting Regional Director of Regional Office No. the transaction was audited on a daily minimum wage rate basis.Dingcong v. contracted. Guingona. When petitioner retired on 17 January 1984. Dingcong. HELD:  The authority of COA extends to the accounts of all person respecting funds or properties received or held by them in an accountable capacity.00 thereby reducing the total amount disallowed to P4." but increased Layson's daily rate to P25. The result was that the emergency nature of the contract was over looked. Iloilo City. admittedly on an "emergency labor basis. is not necessarily disadvantageous. On the other hand. after public bidding. Atty. therefore. who affirmed the disallowance as being "excessive and disadvantageous to the government.00 from the labor contracts with Layson. the labor contract entered into by petitioner was on the “Pakyao” basis. VI of the Bureau of Treasury in Iloilo City. Despite petitioner's request for reconsideration. among the items disallowed by the Resident Auditor was the amount of P6. 162 SCRA 782 (1988) FACTS:   Petitioner.00 daily.276.00. Petitioner appealed to the Chairman of the Commission on Audit. a different cost of labor for casuals was imposed. the instant appeal. respondent Commission remained unmoved." the services of one Rameses Layson. . the assistance of two other carpenters who worked with Layson even on Saturdays was disregarded.

88. On September 20.e. 86-264 as follows: b.. 1988. passed a resolution authorizing the sale by public bidding of its fourteen-year old turbine tanker named "T/T Andres Bonifacio" due to old age and the high cost of maintenance. falls short of the requirement. the lone participant. hence. If the first bidding fails. 175 SCRA 701 (1989) FACTS:   The PNOC..  ISSUE: Whether the public respondent COA committed a grave abuse of discretion when it ruled that there was a failure of bidding when only one bid was submitted and subsequently ordered a re-bidding. the bidding is non-competitive and. why the PNOC perfunctorily rejected a much higher bid which appears to be more beneficial to the corporation. 2) that the public bidding conducted suffers from the deficiency of lack of competition as there was only one bidder and. COA has clearly shown its position to the PNOC in its questioned letterdirective advising the latter of its misgivings as to why the award was given to the lone bidder inspite of regulations previously made known to PNOC and to top it all. COA. there is no showing that the COA committed grave abuse of discretion. the COA thru its State Auditor IV Tobias P. be no bidding at all since. There would. Inc.4. a negotiated sale may be resorted to subject to the approval of the Commission on Audit. a Liberian corporation. The Disposal Committee declared the bid of petitioner to be the winning bid and directed it to transmit to the PNOC 10% of their bid which they immediately complied with.' (Sec. readvertise and conduct a second bidding. in fact. In the absence of error or abuse of power or lack of jurisdiction or grave abuse of discretion already conflicting with either the letter or the spirit of a legislative enactment creating or charging a . negotiation with the lone bidder may not be resorted to as there has been less than two public biddings held. 86-264). COA Circular No.  Well settled is the rule that the construction by the office charged with implementing and enforcing the provisions of a statute should be given controlling weight.888. i. was the sole bidder with a bid of US$14.  In the case at bar. c. If the second bidding fails. Competitive bidding requires that there be at least two (2) bidders who shall compete with each other on an equal footing for winning the award. Petitioner Danville Maritime. If there is only one participating bidder. through its Board of Directors. Lozada issued a memorandum to the Chairman of the Disposal Committee advising the latter to wit 1) that the proposed contract must first be submitted to COA for review before it is signed.1. COA Circular No. 4.158. 3) that the alternative mode of award . cannot compete against himself.Danville Maritime v. HELD:  NO.  The phrase “public auction” or “public bidding” imports a sale to the highest bidder with absolute freedom for competitive bidding. obviously.

and (c) he did not act in bad faith or with gross   ISSUE: Whether the petitioner is within the audit jurisdiction of COA. As a result of the decision of the COA. among other matters. but includes accounting functions and the adoption in the audited agencies of internal controls to see to it. Domingo. for instance. holding that the amount of 44. 1445 (1978) since: (a) his work was purely clerical. license and other miscellaneous fees and penalties. 227 SCRA 206 (1993) FACTS:  Petitioner was formerly and Evaluator/Computer of the Land Transportation Office (LTO) at its San Pablo City Branch.   The Commission has authority not just over accountable officers but also over other officers who perform functions related to accounting such as verification of evaluations and computation of fees collectible. HELD:  YES. 4136) are parts of the functions of the COA. . No. he committed errors in his evaluation and computation. No. and the adoption of internal rules of control. An Evaluator/Computer. the action of the agency would not be disturbed by the judicial department. 1445.90 be withheld from petitioner's leave pay other than his retirement gratuity. Petitioner availed of the Early Program under RA 6683. No. he has not received in full the due him from his retirement.  State audit is not limited to the auditing of the accountable officers and the settlement of accounts. which examines and audits revenue accounts (The Government Auditing Code of the Philippines.515.D. resulting in the under collection of registration. Mamaril v. P. sec 60). is an indispensible part of the process of assessment and collection and comes with the scope of the Commission’s jurisdiction.governmental agency with the administration and enforcement thereof. that the correct fees and penalties due the government are collected. In the course of the performance of his duties. Petitioner contended that he could not be held liable on the audit disallowances because he was not an accountable officer within the meaning of Section 101 of P.A.D. The verification of the correctness of the evaluation and computation of the fees and penalties collectible under the Land Transportation Law (R. (b) he did not come into possession of any money or property for which he is now asked to pay.

" Based on the findings of the Price Evaluation Division. Thus. 837 pieces of shovels and 1 set of radio communication equipment. And. for the purchase of 300 units of wheelbarrows. GR No. Quezon City. COA. Quezon City. Province of Isabela. Thus. June 18. COA Technical Service Office. after an audit has been made. stating the balances found due thereon and certified. Technical Staff Office. 92279.Sambeli v. the Provincial Auditor advised the Provincial Treasurer in his letter that an overprice exists. herein     petitioner. it is allegedly incumbent upon COA to authorize the payment of the balance because to act otherwise will constitute an impairment of contract. Petitioner assails the ruling of the COA as invalid. It contends that the contract of sale has not been perfected between the Province of Isabela and petitioner but delivery has been made by it with the corresponding partial payment by the Province of Isabela. HELD:  NO.  COA is empowered to review and evaluate contracts. and the charges or differences arising from the settlement by reason of disallowances. 1992 FACTS:  An agreement was entered into by and between the Province of Isabela and ECS Enterprises. charges or suspensions. . ISSUE: Whether the ruling of COA is invalid as it would constitute an impairment of contract. its auditors issue a certificate of settlement to each officer whose account has been audited and settled in whole or in part. Delivery was made but the provincial auditor only allowed 50% of the price to be paid "pending receipt of the reply to the query to the Price Evaluation Division. the petitioner was not paid the total price but was even asked to refund the overpayment.

agencies or instrumentalities. COA.00. approved by the court. 98355. specifically “for the construction of the Cebu City Abbatoir. entered into a compromise agreement. Petitioner further stresses that COA has no authority to declare a contract already executed void. And since the 2nd indorsement is a nullity. when HFCCI.  Later. alleged that the contract it entered into was null and void as declared by the COA in its 2nd indoresement. 1994 FACTS:  The city of Cebu decided to construct a modern abattoir (slaughterhouse). HELD:  NO.  In its answer.000.”  After a public bidding H. the City of Cebu. GR No.  The Auditing Code of the Philippines (P. Franco Construction Company.  The City Treasurer issued a certificate of availability of funds in the amount of P5. for recovery of investoments and damages. or pertaining to. John H. against the City of Cebu. was unable to claim the said amount. Osmeña. the government. He also wrote HFCCI asking them for the value of their progress.  Nevertheless. in excess of jurisdiction or with grave abuse of discretion when it invalidated a contract already executed. Osmena. ordered the suspension of the project and review of the contract by the COA.500. to the effect that as a full and final settlement to the claim of HFCCI.180. whatever is due to HFCCI is to the sole liability of the officer or officers who entered into the said contract. Inc. 1445) further provides that no contract involving the expenditure of public funds shall be entered into unless there is an appropriation therefor and the proper accounting official of the agency concerned shall have certified to the officer entering into the obligation that funds have been duly appropriated for the purpose and the amount necessary to cover the proposed . HFCCI instituted a civil action.00) PESOS. through its Mayor petitioner. while admitting having entered into a contract with HFCCI. March 2.  The commission on Audit has the power. the City of Cebu. Tomas R.419. audit settle all accounts pertaining to revenue and receipts of and expenditures or uses of funds and property. it never attained finality. authority and duty to examine.D. or any of its subdivisions. then Officer-In-Charge of the City of Cebu. (HFCCI) was awarded to do the construction of the abbatoir. COA then ruled that the compromise is void as this was based on a void contract. ISSUE: Whether the decision of the Public Respondent as contained in the 2nd indorsement is null and void for having been made.  Therefore. owned or held in trust by.Osmena v.  Sen. the City of Cebu shall pay the amount of ONE MILLION FIVE HUNDRED THOUSAND (P1.   Petitioner argues that the decision of COA invalidating the contract between the City of Cebu and HFCCI was void since it was already executed and fulfilled.

Hence. The trial court's decision based on the compromise agreement could not have ratified a contract which is void ab initio. the contract entered into by the former Mayor Duterte was void from the very beginning since the agreed cost for the project (P8. . Clearly then.00) as certified by the City Treasurer.368.  contract for the current year is available for expenditure on account thereof.920.00) was way beyond the appropriated amount (P5. Any contract entered into contrary to the foregoing requirements shall be VOID.180. Consequently the settlement of the supposed obligation of the City of Cebu arising out of a void contract becomes a personal liability of petitioner who is directly responsible therefor.419. the contract was properly declared void and unenforceable in COA's 2nd Indorsement.

27. in addition to the use of government vehicle. . and ultimately. Pursuant to NPC policy as reflected in the Board Resolution No.00 representing aforesaid transportation allowance. COA. the petitioner moved for reconsideration of the disallowance of the claim for transportation allowance. 103309. 1990. The Regional Auditor denied petitioner's motion in a letter dated June 27. HELD:  NO. On May 31. can put to naught a constitutional provision which has been ratified by the majority of the Filipino people. ISSUE Whether such denial to give due course to the appeal of herein petitioner constitutes grave abuse of discretion amounting to lack of jurisdiction.250. 1990. the petitioner received an Auditor's Notice to Person Liable dated April 17. 1990. If We will not sustain the Commission's power and duty to examine. Petitioner appealed this denial to the Commission on Audit at Quezon City. claimed his transportation allowance for the month of January 1989. the NPC. Nov.  Petitioner’s contention that the NPC policy grants transportation allowance to employees and that COA Circulars prohibiting such allowance should not apply to NPC cannot sustain for its leads to the absurd conclusion that a mere Board of Directors of a government-owned and controlled corporation. which denied do due course.Bustamante v. 1992 FACTS:  Petitioner is the Regional Legal Counsel of the National Power Corporation (NPC) for the     Northern Luzon Regional Center covering the provinces of Rizal up to Batanes.  It is beyond dispute that the discretion exercised in the denial of the appeal is within the power of the Commission on Audit as it is provided in the Constitution. In a letter to the said Regional Auditor dated June 18. As such he was issued a government vehicle with plate number SCC 387. by issuing a resolution. GR No. We will be rendering inutile this Constitutional Body which has been tasked to be vigilant and conscientious in safeguarding the proper use of the government's. the petitioner. 1990 from respondent Regional Auditor Martha Roxana Caburian disallowing P1. the people's property. owned or held in trust by this government-owned and controlled corporation. 81-95 authorizing the monthly disbursement of transportation allowance. audit and settle accounts pertaining to this particular expenditures or use of funds and property.

or use of government funds and properties. the Commission on Audit can promulgate accounting and auditing rules and regulations including those for the prevention and disallowance of irregular. or unconscionable expenditures. excessive. among others. or unconscionable expenditures. excessive or extravagant expenditures of public funds but could only bring the matter to the attention of the proper administrative officer. 1-87 dated February 18.Caltex v.  Petitioner contend that the COA can neither ignore these issuances (the supplemental rules to Department of Finance Circular No. ISSUE: Whether the power of COA does not extend to the disallowance of irregular.  Whereas under Article XI. Hence. since the Commission on Audit must ultimately be responsible for the enforcement of these rules and regulations. the disallowance of irregular. as also under the 1973 Constitution. extravagant. unnecessary. extravagant. 208 SCRA 726 (1992) FACTS:  This is a petition questioning the authority of the Commission on Audit (COA) in disallowing petitioner’s claims for reimbursement from the Oil Price Stabilization Fund (OPSF) and seeking the reversal of said Commission’s decision denying its claims for recovery of financing charges (result of the inability to fully offset financing expenses from yields in money market placements) from the Fund. 1987 which allowed the recovery of financing charges directly from the Oil Price Stabilization Fund) nor formulate its own interpretation of the laws in the light of the determination of executive agencies. unnecessary. extravagant." . but only to the promulgation of accounting and auditing rules. of the 1935 Constitution the Auditor General could not correct irregular. unnecessary. under the 1987 Constitution. or uses of government funds and properties. excessive. the failure to comply with these regulations can be a ground for disapproving the payment of a proposed expenditure. The determination by the Department of Finance and the Office of Energy Affairs that financing charges are recoverable from the OPSF is entitled to great weight and consideration. unnecessary. HELD:  NO. excessive. COA. is limited to the promulgation of accounting and auditing rules for. Section 2. or unconscionable expenditures or uses of government funds and properties. The function of the COA. particularly in the matter of allowing or disallowing certain expenditures.

335 SCRA 750 (2000) FACTS:  The National Power Corporation (NAPOCOR) hired the legal service of petitioner.  Petitioner argued that the circular is unconstitutional because it restricted the practice of law. . a private legal practitioner. 86-255 which requires prior written approval by the Solicitor General as well as the Commission on Audit. unnecessary. excessive and extravagant expenditures of government funds. since he was hired without complying with Circular No. ISSUE: Whether the circular of COA poses a restriction in the practice of law. Gangan.  The Commission on Audit (COA) disallowed the payment of his compensation. HELD:  NO.  The circular simply sets forth the prerequisite for the government agency in hiring a lawyer which are reasonable safeguards to prevent irregular.Polloso v.

the World Bank required the Philippine government to rehabilitate the Development Bank of the Philippines (DBP).DBP v. is its singular function to examine. As a condition for granting the loan. promulgate auditing rules and regulations. ISSUE: Whether the Constitution vest in COA the sole and exclusive power to examine and audit government banks so as to prohibit concurrent audit by private external auditors under any circumstance? Ruling:    NO. It was intended to support the recovery of the Philippine economy. and settle all accounts pertaining to the Government. After learning that the DBP had signed a contract with a private auditing firm. The new COA Chairman contends that the very essence of the Commission on Audit as an independent constitutional commission in the total scheme of Government.” The clear and unmistakable conclusion from a reading of the entire Section 2 is that the COA’s power to examine and audit is non – exclusive while its authority to define the scope of its audit. Then COA Chairman Teofisto Guingona replied that the Commission will interpose no objection to the DBP’s engagement of a private e xternal auditor provided that the terms for said audit are first reviewed and approved by the Commission. COA’s power to examine and audit under the first paragraph is not declared exclusive. while its authority under the second paragraph is expressly declared “exclusive. and disallow unnecessary expenditures is exclusive. . including governmentowned and controlled corporations. COA. 231 SCRA 202 FACTS:       The Philippine Government obtained an Economic Recovery Loan from the World Bank. the new COA Chairman wrote the DBP Chairman that the COA resident auditors were under instructions to disallow any payment to the private auditor. audit. The Monetary Board adopted a resolution requiring a private external auditor for the DBP. DBP Chairman Jesus Estanislao wrote the COA seeking approval of the DBP’s engagement of a private external auditor in addition to the COA. or any of its subdivisions.

which as of 2006 has ballooned to P17 billion. ISSUE: Whether the PNCC is not a government agency making it autonomous of the government and that COA has no jurisdiction over the case.  In the SC. PNCC and Radstock entered into a compromise agreement whereby PNCC shall pay a reduced amount of P6.  The Trial Court issued a writ of preliminary attachment against PNCC and garnished the latter’s bank accounts and real properties. December 4.  For 20 years.). HELD:  NO. Basay Mining Corp. (PNCC) (previously Construction Development Corp. an affiliate of PNCC. obtained loans from Marubeni Corp wherein PNCC.  It denied PNCC’s MTD.185 billion instead of the total amount of the debt. 2009 FACTS:  The Philippine National Construction Corp.  The dissenters’ position that PNCC has the power to compromise because it was incorporated under the Corporation Code and is therefore an “autonomous entity” and is “just like any other private corporation” is wrong. GR No. Radstock Securities.  Radstock immediately started actions for the collection of the amount.” The CA also approved it.7 billion admitted receivable from PNCC). in October 2010. Marubeni assigned its credit to Radstock for only US $2 million (or less than P100 million.  In 1978 and 1981. in stark contrast to the P10. without a board resolution authorizing the same. obliged to pay solidarily with Basay. . Of the Philippines or CDCP) was incorporated under the Corporation Code.  CA also denied PNCC’s petition for certiorari. PNCC passed a board resolution recognizing a P10. 178158. the bone of contention is the PNCC Board’s power to compromise the obligation.  However.7 billion liability to Marubeni Corp.  Three months later.  COA found the terms of the compromise as “fair and above board.Strategic Alliance v.  Later. (later CDCP Mining Corp. PNCC consistently refused to admit liability for the Marubeni loans.

PNCC is a GOCC. Neither is PNCC an “autonomous entity” because it is under the DTI. over which the President exercises control. . Therefore.   PNCC is not “just like any other private corporation” because it is indisputably a GOCC. As held in Felciano v.e. Since the compromise agreement was not approved by Congress. it is a government agency to which the provisions of RAC regarding compromises apply. Thus. COA. it has no power to compromise the Marubeni loan. Only the Congress can do so. it is void. As such. the COA’s jurisdiction extends not only to government agencies or instrumentalities but also to GOCCs with original charters and other GOCC’s without original charters (i.. those created under the Corporation Code but are owned and controlled by the government).

excessive. Paredes. unnecessary. The order of COA is set aside. can disallow the payment of back wages of illegally dismissed by the Provincial Government of Agusan del Sur which has been decreed pursuant to a final decree of the Civil Service Commission. A petition for reinstatement was then filed by petitioners before the Merit Systems Protection Board (MSPB) of the Civil Service Commission alleging that Governor Paredes was motivated by political vengeance when he dismissed them. who were dismissed from the service by then Governor Ceferino S. et al v. The Court ruled that the audit authority of COA is intended to prevent irregular.     ISSUE: Whether COA.Uy. 130685. when the latter assumed office. HELD:    NO. The MSPB also ordered the Provincial Government of Agusan del Sur to pay the petitioners their back salaries and other money benefits for the period that they had been out of service until their reinstatement. 2000 FACTS:  Petitioners were among the more than sixty permanent employees of the Provincial Engineering Office of the Province of Agusan del Sur. The Acting Provincial Treasurer refused to release petitioners’ remaining back salaries and other monetary benefits. and ordering the reinstatement of petitioners. allegedly to scale down the operations of the said office. . Payments of back wages to illegally dismissed government employees can hardly be described as irregular. or uses of government funds and properties. Jr. extravagant or unconscionable expenditures. A motion for reconsideration filed by the petitioners was denied by respondent COA. the MSPB rendered a decision holding that the reduction in work force was not done in accordance with civil service rules and regulations. March 21. unnecessary. excessive. in its exercise of its power to audit. Eventually. extravagant or unconscionable. GR No. COA.

198. Government-owned or controlled corporations are those created by special laws and not those under the Corporation Code of the Philippines. PD 198 is the very law which gives a water district juridical personality. Ruling:        YES.      Issue: Whether the Local Water Districts formed and created pursuant to the provisions of Presidential Decree No. rules and regulations therein laid down. are government-owned or controlled corporations with original charter thus falling under the jurisdiction of the visitorial power of the COA. The controversy began when the COA opined that the audit of the water districts is simply an act of discharging the visitorial power vested in them by the Constitution. LWUA maintained that only those water districts with subsidies from the government fall within the COA’s jurisdiction and only to the extent of the amount of such subsidies. The conflict between the water districts and COA is dependent on whether or not water districts are government-owned or controlled corporations with original charter. Petitioners contend that they are private corporations without original charter. otherwise known as the “Provincial Water Utilities Act of 1973. 95237. Unlike a private corporation where the members of the board are elected from among the members and stockholders thereof. In other words. 1991 Facts:  Petitioners are among the more than five hundred water districts existing throughout the country formed pursuant to the provisions of Presidential Decree No.” It authorized the different local legislative bodies to form and create their respective water districts through a resolution they will pass subject to the guidelines. as amended. as amended by Presidential Decrees Nos. 768 and 1479. PD 198 is a special law applicable only to the different water districts created pursuant thereto. The resolution of a local sanggunian is intended only to implement the provisions of said decree. The said decree is in fact the charter of the different water districts for it clearly defines the latter’s primary purpose and its basic organizational set – up. members of the board of a water district are appointed by the local chief executive of the local subdivision unit where such district is located.Davao City Water District v. . September 13. 198. hence outside the jurisdiction of respondents CSC and COA. On the other hand. CSC and COA. GR No.

COA denied the petition and advised him to file his claim with the court authorized to rule on issue of constitutionality of provisions of law.  Citing lack of jurisdiction. reimbursement. or compensation arising from law or contract due or owing to a government agency” does not include the power to rule on the constitutionality of the laws. which provides that a retiree who loses his Filipino citizenship shall be removed from the retired list and consequently have his retirement benefits terminated. June 7. COA dismissed his appeal. GR No.Parreno v. 162224. it is within COA’s jurisdiction to resolve the dispute. contesting the constitutionality of Section 27 of PD 1638 or the AFP Military Personnel Retirement and Separation Decree as amended by PD 1650. Issue: Whether COA’s jurisdiction over money claims include the power to rule on the constitutionality of the laws. petitioner argued that since his pension involves government funds. 2007 Facts:  Parreño filed a claim before the Commission on Audit (COA) for the continuance of his pension. citing lack of jurisdiction.  In his motion for reconsideration. COA. The Court ruled that the jurisdiction of COA over money claims defined as “demands for payment of a sum of money. . Ruling:   NO.

COA G.R."  These corporations are treated by law as agencies or instrumentalities of the government which are not subject to the tests of ownership or control and economic viability but to different criteria relating to their public purposes/interests or constitutional policies and objectives and their administrative relationship to the government or any of its Departments or Offices. are ipso facto to be considered private corporations as there exists another distinct class of corporations or chartered institutions which are otherwise known as "public corporations.  For the purposes of audit supervision. Section 4.  The BSP sought reconsideration of the COA Resolution in a letter signed by then BSP National President Jejomar C.BSP vs. which are not government owned or controlled. the BSP shall be classified among the government corporations to be audited by employing the team audit approach.  The BSP is a public corporation with juridical personality as it is called by the law creating it. Held: YES. 2011 Facts:  The COA issued a resolution in 1999 defining its policy with respect to the audit of the Boy Scouts of the Philippine. June 7. Binay. Issue: Wheter the BSP is under the audit jurisdiction of COA. Annual Report to the President and to Congress . saying that it is not subject to the COA’s jurisdiction.  Not all corporations. No. 177131. which was created as a public corporation.

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