Jimmie Jan Alforque

Quisumbing vs. Gov. Garcia

G.R. No. 175527, December 8, 2008, EN BANC (TINGA, J.)

Prior authorization by the sanggunian concerned is required before the local chief
executive may enter into contracts on behalf of the local government unit.

FACTS
Gabriel Luis Quisumbing (Quisumbing), Estrella P. Yapha, Victoria G. Corominas, and
Raul D. Bacaltos (Bacaltos), collectively petitioners, assail the Decision of the RTC of Cebu
City, which declared that under the pertinent provisions of the Local Government Code, and the
Government Procurement Reform Act, respondent Cebu Provincial Governor Gwendolyn F.
Garcia (Gov. Garcia), need not secure the prior authorization of the Sangguniang Panlalawigan
before entering into contracts committing the province to monetary obligations.

The Commission on Audit (COA) conducted a financial audit on the Province of Cebu for the
period ending December 2004. Its audit team rendered a report, Part II of which states: "Several
contracts in the total amount of P102,092,841.47 were not supported with a Sangguniang
Panlalawigan resolution authorizing the Provincial Governor to enter into a contract, as required
under Section 22 of R.A. No. 7160."

Alleging that the infrastructure contracts subject of the audit report complied with the
bidding procedures provided under R.A. No. 9184 and were entered into pursuant to the general
and/or supplemental appropriation ordinances passed by the Sangguniang Panlalawigan, Gov.
Garcia alleged that a separate authority to enter into such contracts was no longer necessary.

ISSUE:

Whether or not prior approval by the Sangguniang Panlalawigan was required before
Gov. Garcia could have validly entered into the questioned contracts

HELD:

As it clearly appears from the foregoing provision, prior authorization by the sanggunian
concerned is required before the local chief executive may enter into contracts on behalf of the
local government unit.

Sec. 306 of R.A. No. 7160 read in conjunction with Sec. 346, Sec. 306 authorizes the
local chief executive to make disbursements of funds in accordance with the ordinance
authorizing the annual or supplemental appropriations. The "ordinance" referred to in Sec. 346
pertains to that which enacts the local government unit’s budget, for which reason no further
authorization from the local council is required, the ordinance functioning, as it does, as the
legislative authorization of the budget.

To construe Sections 306 and 346 of R.A. No. 7160 as exceptions to Sec. 22(c) would
render the requirement of prior sanggunian authorization superfluous, useless and irrelevant.
There would be no instance when such prior authorization would be required, as in contracts
involving the disbursement of appropriated funds. Yet, this is obviously not the effect Congress
had in mind when it required, as a condition to the local chief executive’s representation of the
local government unit in business transactions, the prior authorization of the sanggunian
concerned. The requirement was deliberately added as a measure of check and balance, to temper
the authority of the local chief executive, and in recognition of the fact that the corporate powers
of the local government unit are wielded as much by its chief executive as by its council.

The fact that the Province of Cebu operated under a reenacted budget in 2004 lent a
complexion to this case which the trial court did not apprehend. Sec. 323 of R.A. No. 7160
provides that in case of a reenacted budget, "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 budgets for the preceding year shall be
deemed reenacted and disbursement of funds shall be in accordance therewith."