Mison v.

COA
187 SCRA 445
John Carlo L. Peñaranda

DOCTRINE: COA is collegial body which means that a governmental entity marked by power or authority vested
equally in each of a number of colleagues.

FACTS:

Hyojin Maru, a seized vessel by the Bureau of Customs sank prior to its release to its claimants. Such
claimants then filed a claim with COA for the payment of the vessel. But this claim was denied by Mr. Rogelio
Espiritu, Manager Technical Services Office(TSO) of COA claiming to be acting "(b)y authority of the Acting
Chairman," The decision was eventually ratified by Chairman Domingo acting “for the commission”. Claimants
now question the authority of the TSO Manager and COA Chair, alleging that the decision was void because the
matter could validly be acted upon only by "the Commission on Audit duly constituted, by the appointment and
qualification of its Chairman and two Commissioners," "as specifically provided by Section 2, Article XII-D of the
(1973) Constitution.

ISSUE:

Whether or not the authority of TSO Manager and COA chair is constitutional.

HELD:

Yes. The decision is void ab initio. The TSO manager had no power whatever to render and promulgate a
decision of or for the Commission. Indeed, even the Chairman, alone, had not that power. ." It was the
Commission ("composed of a Chairman and two Commissioners), as a collegial body, had the jurisdiction Further,
the ratification was also inconsequential. Ratification cannot validate an act void ab initio because it was done
absolutely without authority. Moreover, even conceding the contrary, no proper ratification or validation could
have been effected by the Acting Chairman since he was not the Commission, and he himself had no power to
decide any case brought before the Commission, that power, to repeat, being lodged only in the Commission itself,
as a collegial body.
FUNA V.COA
G.R. No. 192791, April 24, 2012
John Carlo L. Peñaranda

DOCTRINE: Section 1 (2) The Chairman and the Commissioners shall be appointed by the President with the
consent of the Commission on Appointments for a term of seven years without reappointment. Of those first
appointed, the Chairman shall hold office for seven years, one Commissioner for five years, and the other
Commissioner for three years, without reappointment. Appointment to any vacancy shall be only for the unexpired
portion of the term of the predecessor. In no case shall any Member be appointed or designated in a temporary or
acting capacity.

FACTS:

Funa challenges the constitutionality of the appointment of Reynaldo A. Villar as Chairman of the
Commission on Audit and accordingly prays that a judgment issue "declaring the... unconstitutionality" of the
appointment.term of seven (7) years, pursuant to the 1987 Constitution.[1] Carague's... term of office started on
February 2, 2001 to end on February 2, 2008. Villar was nominated and appointed as Chairman of the COA.
Shortly thereafter, on June 11, 2008, the Commission on Appointments confirmed his appointment.

ISSUE:

Whether or not the assailed appointment of respondent Villar as COA Chairman is unconstitutional.

RULING:

Yes, the appointment of Villar as COA Chairman is unconstitutional because according to Sec. 1 (2), Art.
IX(D) of the Constitution. The appointment of Villar, from Commissioner to Chairman, was not a reappointment.
Jurisprudence tells us that the word “reappointment” means a second appointment to one and the same office.
Necessarily, a movement to a different position within the commission (from Commissioner to Chairman) would
constitute an appointment, or a second appointment, to be precise, but not reappointment. in this case, Villar has
already served four years as commissioner, serving as COA chairman for full 7-year term as COA chairman would
unduly extend his term beyond the 7 years fixed by the constitution. Where the Constitution or, for that matter, a
statute, has fixed the term of office of a public official, the appointing authority is without authority to specify in
the appointment a term shorter or longer than what the law provides—if the vacancy calls for a full seven year
appointment, the President is without discretion to extend a promotional appointment for more or for less than
seven (7) years. The explicit command of the Constitution is that the “Chairman and the Commissioners shall be
appointed by the President for a term of seven years and appointment to any vacancy shall be only for the
unexpired portion of the term of the predecessor.
Blue Bar Coconut Philippines v. Tantuico, Jr.
163 SCRA 716, No. L-47051, July 29, 1988
John Carlo L. Peñaranda

DOCTRINE: Power of the Commission under Section 2 (1); The civil service embraces all branches,subdivisions,
instrumentalities, and agencies of the government, including government-owned or controlled corporations with
original characters.

FACTS:

Sometime in 1976, the respondent Acting Chairman of the Commission 011 Audit initiated a special audit
of coconut end-user companies, which include herein petitioners, with respect to their Coconut Consumers
Stabilization Fund levy collections and the subsidies they had received. As a result of the initial findings of the
Performance Audit Office with respect only to the petitioners, respondent Acting COA Chairman directed the
Chairman, the Administrator, and the Military Supervisor of PCA and the Manager of the Coconut Consumers
Stabilization Fuiid, in various letters to them (Annexes G2, H, I, J, L and N of petition) to collect the short levies
aiid overpaid subsidies, and to apply subsidy claims to the settlement of short levies should the petitioners fail to
remit the amount due. Petitioners now contend that they are outside the ambit of respondents' "audit" power which
is confined to government-owned or controlled corporations

ISSUE:

Whether or not the contention of the petitioners is correct?

RULING:

No. 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. Such has been clearly included in Section 2 (1) of Art IX-D of the Constitution viz.(d) such non-
governmental entities receiving subsidy or equity directly or indirectly from or through the government which are
required by law or the granting institution to submit to such audit as a condition of subsidy or equity."
DBP v. COA
422 SCRA 459 [2004]
John Carlo L. Peñaranda

DOCTRINE: SECTION 2. (1) The Commission on Audit shall have the power, authority, and duty to examine,
audit, and settle all accounts pertaining to the revenue and receipts of, and expenditures or uses of funds and
property, owned or held in trust by, or pertaining to, the Government, or any of its subdivisions, agencies, or
instrumentalities, including government-owned or controlled corporations with original charters

FACTS:
DBP-TSD paid to the investormembers a total of P11,626,414.25 representing the net earnings of the
investments for the years 1991 and 1992. The payments were disallowed by the Auditor under Audit Observation
Memorandum No. 93-2 dated March 1, 1993, on the ground that the distribution of income of the Gratuity Plan
Fund (GPF) to future retirees of DBP is irregular and constituted the use of public funds for private purposes which
is specifically proscribed under Section 4 of P.D. 1445.8

AOM No. 93-2 did “not question the authority of the Bank to setup the [Gratuity Plan] Fund and have it
invested in the Trust Services Department of the Bank.”9 Apart from requiring the recipients of the P11,626,414.25
to refund their dividends, the Auditor recommended that the DBP record in its books as miscellaneous income the
income of the Gratuity Plan Fund (“Fund”). The Auditor reasoned that “the Fund is still owned by the Bank, the
Board of Trustees is a mere administrator of the Fund in the same way that the Trust Services Department where
the fund was invested was a mere investor and neither can the employees, who have still an inchoate interest [i]n
the Fund be considered as rightful owner of the fund.

ISSUE:

Whether or not government instrumentalities have the grounds to question decisions of COA.

RULING:

Section 2, Article IX-D of the Constitution does not bar government instrumentalities from questioning
decisions of the COA. Government agencies and government-owned and controlled corporations have long
resorted to petitions for certiorari to question rulings of the COA. These government entities filed their petitions
with this Court pursuant to Section 7, Article IX of the Constitution, which mandates that aggrieved parties may
bring decisions of the COA to the Court on certiorari. Likewise, the Government Auditing Code expressly provides
that a government agency aggrieved by a COA decision, order or ruling may raise the controversy to the Supreme
Court on certiorari “in the manner provided by law and the Rules of Court.” Rule 64 of the Rules of Court now
embodies this procedure, to wit: SEC. 2. Mode of review.—A judgment or final order or resolution of the
Commission on Elections and the Commission on Audit may be brought by the aggrieved party to the Supreme
Court on certiorari under Rule 65, except as hereinafter provided.
Uy v. COA
G.R. No. 177131, June 7, 2011
John Carlo L. Peñaranda

DOCTRINE: Payment of back wages to illegally dismissed government employees can hardly be described as
irregular, unnecessary, excessive, extravagant or unconscionable.

FACTS: 

Former Governor Paredes dismissed from service more than sixty employees, allegedly to scale down the
operations of the office. The Merit Systems Protection Board which is under the CSC rendered a decision that the
reduction in work force was not done in accordance with civil service rules and regulations, and ordered the
reinstatement of the workers. The Commission on Audit (COA) rendered a decision ruling that the back salaries of
the workers have become the personal liability of the Governor because the illegal dismissal was done in bad faith.

ISSUE:
 Whether or not COA, in the exercise of its power to audit, can disallow the payment of back wages of
illegally dismissed employees by the Provincial Government of Agusan del Sur which has been decreed pursuant
to a final decision of the CSC.

RULING: 

No, the audit authority of COA is intended to prevent irregular, unnecessary, excessive, extravagant or
unconscionable expenditures, or uses of government funds and properties. Payment of back wages to illegally
dismissed government employees can hardly be described as irregular, unnecessary, excessive, extravagant or
unconscionable. Furthermore, Government Paredes was never made a party to nor served a notice of the
proceedings before the COA and it would be unfair to hold him personally liable for the claims of petitioners
without giving him an opportunity to be heard and present evidence in his defense.
Aguinaldo v. Sandigbayan
265 SCRA 121 [1996]
John Carlo L. Peñaranda

DOCTRINE: SECTION 2. (1) The Commission on Audit shall have the power, authority, and duty to examine,
audit, and settle all accounts pertaining to the revenue and receipts of, and expenditures or uses of funds and
property, owned or held in trust by, or pertaining to, the Government, or any of its subdivisions, agencies, or
instrumentalities, including government-owned or controlled corporations with original charters

FACTS:

Aguinaldo, then holding the position of Provincial Governor of Cagayan Province, hence a public officer
who, by reason of the duties of his office, is accountable for public funds or property, taking advantage of his
official position. The Commission on Audit(COA) found that claims of petitioner for intelligence operations in
1988 and 1989 in the amounts of P400,000 and P350,000, respectively, had been charged to the 20% Development
Fund and that some of the claims were covered by disbursement vouchers with only reimbursement receipts to
support them, most of which were signed by only one person, while other claims had no supporting papers at all.
For this reason the audit team submitted a report, recommending that it must be required to submit the required
documents covering claims for intelligence activities, before making payment. Require claimant to complete the
documentation on payments made with incomplete papers otherwise, refund of the same should be made. Stop
provincial officials from using the 20% Development Fund for purposes other than for development projects under
MLG Circular No. 83-4On February 3, 1992, the COA Director, filed with the Office of the Ombudsman
acomplaint, alleging anomalies consisting of irregular/illegal disbursements of government funds. Ombudsman
found that, in all, petitioner had distributed the amount of P750,000 to the military, police and civilian informers to
fight insurgency. Petitioner cannot, however submit receipts or documents evidencing disbursements for
intelligence activities which are required.. Under these circumstances, being an accountable public officer and who
could not account for the insurgency funds when audited, there is prima-facie evidence that he has put such
missing funds to personal use and therefore liable for malversation of public funds under Article 217 of the RPC.

ISSUE:
Whether or not Sandiganbayan has erred in deciding to proceed trial of petitioner.

RULING:

Given the indecisive, uncertain and, at best, tentative opinion of COA officials, we think the Sandiganbayan
correctly decided to proceed with the trial of petitioner, leaving the ultimate resolution of the questions (whether
the affidavits submitted by petitioner constitute sufficient evidence of disbursement of public funds for the purpose
claimed by petitioner and whether charging certain expenditures to the so-called 20% Development Fund is
authorized under the law) to be made after trial. For its part, the Office of the Ombudsman, having found the
COA's original finding of failure to comply with accounting rules unaffected by later equivocal and hedging
clearance of COA's officials, found no reason to reconsider its decision to prosecute.
 Home Development Mutual Fund v. Commission on Audit
G.R. No. 142297, June 15, 2004
John Carlo L. Peñaranda

DOCTRINE: A government-owned and controlled corporation performing proprietary functions with original
charter or created by special law is covered by the Civil Service pursuant to Article IX, Section 2(1) of the 1987
Constitution.

FACTS:

   Republic Act No. 6971, "An Act to Encourage Productivity and Maintain Industrial Peace by Providing
Incentives to Both Labor and Capital," was approved on November 22, 1990, and took effect on December 9,
1990. Section 3 of said Act Sec. 3. Coverage.This Act shall apply to all business enterprises with or without
existing and duly recognized or certified labor organizations, including government-owned and controlled
corporations performing proprietary functions. It shall cover all employees and workers including casual, regular,
supervisory and managerial employees  On June 4, 1991, the Secretary of Labor and Employment and the
Secretary of Finance promulgated the Rules Implementing Republic Act No. 6971. Rule II.

      In a letter-request, HDMF, through its President and Chief Executive Officer, Zorayda Amelia C. Alonzo,
requested for the lifting of the disallowance. Alonzo argued that R.A. No. 6971 applies to the employees of HDMF
since the coverage of the said law includes government-owned and controlled corporations performing proprietary
functions, and the supplemental rules excluding it from coverage was issued after the HDMF had already granted
the productivity incentive bonus to its employees. The COA affirmed the audit disallowance in a later decision
stating that it finds the HDMF’s argument, that the supplemental rules should not be given retroactive effect,
untenable. It must be noted that the grant of the Productivity Incentive Bonus was made on November 21, 1991 or
after receipt of the advice of the Department of Budget and Management Undersecretary dated August 26, 1991 to
defer payment of Productivity Incentive Bonus to all GOCCs/GFIs with original charters performing proprietary
functions, pending definite ruling of the Office of the President. Despite the said notice, management proceeded
with the payment.    HDMF filed a motion for reconsideration that was denied by the Commission on Audit in
Resolution No. 2000-086 dated March 7, 2000.

ISSUE:
Whether or not the Commission on Audit acted in excess of its jurisdiction or with grave abuse of discretion
amounting to lack of jurisdiction in affirming the audit disallowance.

RULING:

No, Commission on Audit did not commit grave abuse of discretion amounting to lack of jurisdiction in
affirming the audit disallowance. Petitioner is a government-owned and controlled corporation performing
proprietary functions with original charter or created by special law, specifically Presidential Decree (PD) No.
1752, amending PD No. 1530. As such, petitioner HDMF is covered by the Civil Service pursuant to Article IX,
Section 2(1) of the 1987 Constitution, and, therefore, excluded from the coverage of Republic Act No. 6971.
DBP v. COA
231 SCRA 202, January 16, 2002
John Carlo L. Peñaranda

DOCTRINE:
Article IX-D Section 2(2) of the Constitution provides that the COA’s power to examine and audit is non –
exclusive while its authority to define the scope of its audit, promulgate auditing rules and regulations, and
disallow unnecessary expenditures is exclusive.

FACTS:
The Philippine Government obtained an Economic Recovery Loan from the World Bank. It was intended to
support the recovery of the Philippine economy. As a condition for granting the loan, the World Bank required the
Philippine government to rehabilitate the Development Bank of the Philippines (DBP). 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. Then COA
Chairman Teofisto Guingona replied that the Commission will interpose no objection to the DBP’s engagement of
a private external auditor provided that the terms for said audit are first reviewed and approved by the Commission.
After learning that the DBP had signed a contract with a private auditing firm, the new COA Chairman wrote
the DBP Chairman that the COA resident auditors were under instructions to disallow any payment to the private
auditor. 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, is its singular function to examine, audit, and settle
all accounts pertaining to the Government, or any of its subdivisions, including government-owned and controlled
corporations.

ISSUE:
Whether or not 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, 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.” 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, promulgate auditing rules and regulations, and disallow unnecessary
expenditures is exclusive.
Nava v. Palattao
499 SCRA 745,August 28,2006
John Carlo L. Peñaranda

DOCTRINE: The lack of a  public bidding and the violation of an administrative order do not by themselves
satisfy the third element of Republic Act No. 3019. Lack of public bidding alone does not result in a manifest and
gross disadvantage

FACTS:
An amount of P603,265.00 was released to the DECS for distribution to the newly nationalized high
schools located within the region. Through the initiative of accused Venancio Nava, a meeting was called among
his seven (7) schools division superintendents whom he persuaded to use the money or allotment for the purchase
of Science Laboratory Tools and Devices (SLTD). In other words, instead of referring the allotment to the one
hundred fifty-five (155) heads of the nationalized high schools for the improvement of their facilities, accused
Nava succeeded in persuading his seven (7) schools division superintendents to use the allotment for the purchase
of science education facilities.

ISSUE:
Whether or not petitioner is guilty of violating Section 3(g) of the Anti-Graft and Corrupt Practices Act.
 
RULING:
Yes, petitioner is guilty of violating Section 3(g) of the Anti-Graft and Corrupt Practices Act. Petitioner is
a public officer, who approved the transactions on behalf of the government, which thereby suffered a substantial
loss. The discrepancy between the prices of the SLTDs purchased by the DECS and the samples purchased by the
COA audit team clearly established such undue injury. Indeed, the discrepancy was grossly and manifestly
disadvantageous to the government. The law on public bidding is not an empty formality. It aims to secure the
lowest possible price and obtain the best bargain for the government. It is based on the principle that under
ordinary circumstances, fair competition in the market tends to lower prices and eliminate favouritism.
Gualberto Dela Llana v. Commission on Audit
G.R. No. 180989, February 7, 2012
John Carlo L. Peñaranda

DOCTRINE: The conduct of pre-audit is not mandatory duty that this Court may compel the COA to perform. In
accordance to the constitutional pronouncement, COA has the exclusive authority to define the scope of its audit
and examination.

FACTS:
This is a Petition in pursuant to Section 7, Article IX-D of the 1987 Constitution, seeking to annul and set
aside Commission on Audit (COA) Circular No. 89-299, which lifted its system of pre-audit of government
financial transactions. The rationale for the circular was, first to reaffirm the concept that fiscal responsibility
resides in management as embodied in the Government Auditing Code of the Philippines; and, second, to
contribute to accelerating the delivery of public services and improving government operations by curbing undue
bureaucratic red tape and ensuring facilitation of government transactions, while continuing to preserve and protect
the integrity of these transactions. As a taxpayer, Petitioner alleged that pre-audit duty on the part of the COA
cannot be lifted by mere circular, considering the pre-audit is a constitutional mandate enshrined in Section 2 of
Article IX-D of the 1987 Constitution. Moreover, he claims that because of the lack of pre-audit by COA, serious
irregularities in the government transactions have been committed.

ISSUE:
Whether or not it is the constitutional duty of COA to conduct pre-audit before the consummation of
government transaction.

RULING:
No, the petitioner’s allegations find no support in the Section 2 of Article IX-D of the 1987 Constitution. In the
said provision, it did not mention that it requires the COA to conduct a pre-audit of all government transactions and
for all government agencies. The only clear reference to pre-audit requirement is found in Section 2, paragraph 1,
which provides that a post-audit is mandated for certain government or private entities with state subsidy or equity
and only when the internal control system of an audited entity is inadequate. In such situation, the COA may adopt
measures, including temporary or special pre-audit, to correct the deficiencies. Hence, the conduct of pre-audit is
not mandatory duty that this Court may compel the COA to perform. In accordance to the constitutional
pronouncement, COA has the exclusive authority to define the scope of its audit and examination.
Versoza v. Carague
G.R. No. 157838, February 7, 2012
John Carlo L. Peñaranda

DOCTRINE: Aricle IX-D Section 2. (1) The Commission on Audit shall have the power, authority, and duty to
examine, audit, and settle all accounts pertaining to the revenue and receipts of, and expenditures or uses of funds
and property, owned or held in trust by, or pertaining to, the Government, or any of its subdivisions, agencies, or
instrumentalities, including government-owned or controlled corporations with original charters, and on a post-
audit basis: (a) constitutional bodies, commissions and offices that have been granted fiscal autonomy under this
Constitution.

FACTS:

Cooperative Development Authority (CDA) conducted a public bidding for the supply of computer
equipment and peripherals. COA through the TSO, tested the reasonableness of the prices of the purchased
computers. TSO found that the purchased computers were overpriced/excessive which resulted to the Resident
Auditor issuing a Notice of Disallowance for the overpricing. CDA however contends that COA gravely abused its
discretion in the manner of the determination of the overpricing was inadequate and thus evidence was not
substantial to prove the overpricing of the computers.

ISSUE:

Whether or not the contention of the CDA correct?

RULING:

No, The general policy of the Court to sustain the decisions of administrative authorities, especially one
which is constitutionally-created, not only on the basis of the doctrine of separation of powers but also for their
presumed expertise in the laws they are entrusted to enforce. Findings of quasi-judicial agencies, such as the COA,
which have acquired expertise because their jurisdiction is confined to specific matters are generally accorded not
only respect but at times even finality if such findings are supported by substantial evidence, and the decision and
order are not tainted with unfairness or arbitrariness that would amount to grave abuse of discretion. Thus, in this
case, there being no grave abuse of discretion in the findings and conclusions of the COA in this case, the Court
finds no cogent reason to deviate from these long-settled rules.
Philippine Coconut v. Republic
663 SCRA 514
John Carlo L. Peñaranda

DOCTRINE: Section 2 (2) The Commission shall have exclusive authority, subject to the limitations in this
Article, to define the scope of its audit and examination, establish the techniques and methods required therefor,
and promulgate accounting and auditing rules and regulations, including those for the prevention and
disallowance of irregular, unnecessary, excessive, extravagant, or unconscionable expenditures, or uses of
government funds and properties.

FACTS:

COCOFED proposes to constitute a trust fund to be known as the “Coconut Industry Trust Fund (CITF) for
the Benefit of the Coconut Farmers,” with respondent Republic, acting through the Philippine Coconut Authority
(PCA), astrustee. As proposed, the constitution of the CITF shall be subject to terms and conditions which, for the
most part, reiterate the features of SMC’s conversion offer, albeit specific reference is made to the shares of the 14
CIIF company.

ISSUE:

Whether or not the proposal of Trust fund is constitutional.

RULING:

No. We have ruled time and again that taxes are imposed only for a public purpose. “They cannot be used
for purely private purposes or for the exclusive benefit of private persons.” When a law imposes taxes or levies
from the public, with the intent to give undue benefit or advantage to private persons, or the promotion of private
enterprises, that law cannot be said to satisfy the requirement of public purpose. in this case, the coconut levy funds
were sourced from forced exactions decreed under P.D. Nos. 232, 276 and 582, among others, with the end-goal of
developing the entire coconut industry. Clearly, to hold therefore, even by law, that the revenues received from the
imposition of the coconut levies be used purely for private purposes to be owned by private individuals in their
private capacity and for their benefit, would contravene the rationale behind the imposition of taxes or levies.
Philippine Coconut Producers Federation, Inc.
Funa v. Meco
G.R. NO. 193462 , Februaty 4, 2014
John Carlo L. Peñaranda

DOCTRINE: Section 2 (1) The Commission on Audit shall have the power, authority, and duty to examine, audit,
and settle all accounts pertaining to the revenue and receipts of, and expenditures or uses of funds and property,
owned or held in trust by, or pertaining to, the Government, or any of its subdivisions, agencies, or
instrumentalities, including government-owned or controlled corporations with original charters

FACTS:

On 23 August 2010, petitioner sent a letter to the COA requesting for a “copy of the latest financial and
audit report” of the MECO invoking, for that purpose, his “constitutional right to information on matters of public
concern.” The petitioner made the request on the belief that the MECO, being under the “operational supervision”
of the Department of Trade and Industry (DTI), is a government owned and controlled corporation (GOCC) and
thus subject to the audit jurisdiction of the COA.

Petitioner’s letter was received by COA Assistant Commissioner Jaime P. Naranjo, the following day. On
25 August 2010, Assistant Commissioner Naranjo issued a memorandum referring the petitioner’s request to COA
Assistant Commissioner Emma M. Espina for “further disposition.” In this memorandum, however, Assistant
Commissioner Naranjo revealed that the MECO was “not among the agencies audited by any of the three Clusters
of the Corporate Government Sector.”

ISSUE:

Whether or not MECO is a GOCC covered by the auditing power of COA.

RULING:

No. Government instrumentalities are agencies of the national government that, by reason of some “special
function or jurisdiction” they perform or exercise, are allotted “operational autonomy” and are “not integrated
within the department framework.” Subsumed under the rubric “government instrumentality” are the following
entities: Regulatory agencies, Chartered institutions, government corporate entities or government instrumentalities
with corporate powers (GCE/GICP), and GOCCs
Law Firms v. Comelec
GR 213330, November 19, 2015
John Carlo L. Peñaranda

DOCTRINE: A private lawyer may be hired by the GOCC by securing the written conformity of the OGCC and
the written concurrence of the COA must first be secured -which also applied in cases of contract renewal

FACTS:
Isabela Water District (ISAWAD) is a government owned and controlled corporation (GOCC) created
pursuant to the provisions of Presidential Decree (P.D.) No. 198, or the "Provincial Water Utilities Act of 1973"
(PWUA), as amended by Republic Act (R.A.) No. 9286.4 Aleli G. Almadovar (petitioner) is the General Manager
(GM) of ISAWAD. On January 25, 2007, Catalino S. Genel , Audit Team Leader for ISAWAD, Isabela City,
issued the following NDs for ISAWAD's various payments. On April 26, 2007, petitioner filed an appeal with the
Regional Cluster Director, Cluster Ill-Public Utilities, Corporation Government Sector, which was indorsed to the
COA Regional Office. Petitioner insisted that the increase in her salary and her RATA was in accordance with
R.A. No. 9286, or the law which amended the PWUA.Petitioner further claimed that the engagement of a private
counsel, Atty. Quirino Esguerra Jr. (Atty. Esguerra), and the designation of OGCC lawyer, Atty. Fortunato G.
Operario Jr. (Atty. Operario), were in accordance with the procedure set forth by law. Consequently, the payments
made to them were appropriate.

ISSUE:
Whether or not the designation of OGCC lawyer, Atty. Fortunato G. Operario Jr. (Atty. Operario), were in
accordance with the procedure set forth by law.

RULING:

No, On December 29, 2011, the COA rendered the assailed decision affirming the ruling of the COA
Regional Office. It stressed that before a private lawyer may be hired by the GOCC, the written conformity of the
OGCC and the written concurrence of the COA must first be secured -which also applied in cases of contract
renewal. The COA ruled that the payments to Atty. Esguerra from January to October 2005 were improper because
his services were retained without the necessary conformity and concurrence of both the OGCC and the COA.
Only the retainership contract for a period of one year effective on November 1, 2005 was with the conformity and
concurrence of both the OGCC and the COA aggrieved, petitioner moved for reconsideration of the decision but
her motion was denied by the COA
Caltex V. COA
208 SCRA 726, May 8, 1992
John Carlo L. Peñaranda

DOCTRINE: Taxes may be levied with a regulatory purpose to provide means for the rehabilitation and
stabilization of a threatened industry which is affected with public interest as to be within the police power of the
State.

FACTS:

In 1989, COA sent a letter to Caltex, directing it to remit its collection to the Oil Price Stabilization
Fund (OPSF), excluding that unremitted for the years 1986 and 1988, of the additional tax on petroleum products
authorized under the PD 1956. Pending such remittance, all of its claims for reimbursement from the OPSF shall be
held in abeyance. The grant total of its unremitted collections of the above tax is P1, 287,668,820. Caltex submitted
a proposal to COA for the payment and the recovery of claims. COA approved the proposal but prohibited Caltex
from further offsetting remittances and reimbursements for the current and ensuing years. Caltex moved for
reconsideration but was denied. Hence the present petition.

ISSUE:

Whether or not the amounts due from Caltex to the OPSF may be offset against Caltex’s outstanding claims
from said funds.

RULING:

No. Taxation is no longer envisioned as a measure merely to raise revenue to support the existence of
government. Taxes may be levied with a regulatory purpose to provide means for the rehabilitation and
stabilization of a threatened industry which is affected with public interest as to be within the police power of the
State.
PD 1956, as amended by EO 137, explicitly provides that the source of OPSF is taxation. A taxpayer may not
offset taxes due from the claims he may have against the government. Taxes cannot be subject of compensation
because the government and taxpayer are not mutually creditors and debtors of each other and a claim for taxes is
not such a debt, demand, contract or judgment as is allowed to be set-off. Hence, COA decision is affirmed except
that Caltex’s claim for reimbursement of under recovery arising from sales to the National Power Corporation is
allowed. 
Mamaril v. Domingo
277 SCRA 206, October 13, 1993
John Carlo L. Peñaranda

DOCTRINE: 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, and
the adoption of internal rules of control

FACTS:

Petitioner was formerly and Evaluator/Computer of the Land Transportation Office (LTO) at its San Pablo
City Branch. In the course of the performance of his duties, he committed errors in his evaluation and computation,
resulting in the under collection of registration, license and other miscellaneous fees and penalties. Petitioner
availed of the Early Program under RA 6683. As a result of the decision of the COA, holding that the amount of
44,515.90 be withheld from petitioner's leave pay other than his retirement gratuity, he has not received in full the
due him from his retirement. 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.D. No. 1445 (1978) since: (a) his
work was purely clerical; (b) he did not come into possession of any money or property for which he is now asked
to pay; and (c) he did not act in bad faith or with gross

ISSUE:

Whether or not the petitioner is within the audit jurisdiction of COA.

RULING:

Yes, State audit is not limited to the auditing of the accountable officers and the settlement of accounts, but
includes accounting functions and the adoption in the audited agencies of internal controls to see to it, among other
matters, that the correct fees and penalties due the government are collected. The verification of the correctness of
the evaluation and computation of the fees and penalties collectible under the Land Transportation Law (R.A. No.
4136) are parts of the functions of the COA, which examines and audits revenue accounts (The Government
Auditing Code of the Philippines, P.D. No. 1445, sec 60).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, and the adoption of internal rules of control. An Evaluator/Computer, for
instance, is an indispensible part of the process of assessment and collection and comes with the scope of the
Commission’s jurisdiction.
Philippine Airlines v. COA
245 SCRA 39 [1995]
John Carlo L. Peñaranda

DOCTRINE: SECTION 2. (1) The Commission on Audit shall have the power, authority, and duty to examine, audit, and settle
all accounts pertaining to the revenue and receipts of, and expenditures or uses of funds and property, owned or held in
trust by, or pertaining to, the Government, or any of its subdivisions, agencies, or instrumentalities, including government-
owned or controlled corporations with original charters

FACTS:

PAL is a domestic corporation duly organized and existing under Philippine laws, principally engaged in the air
transport business, both domestic and international. At the time of the filing of the petition on February 8, 1990, majority of
its shares of stock was owned by the Government Service Insurance System (GSIS), a government corporation.

To assure itself of continuous, reliable and cost-efficient supply of fuel, PAL adopted a system of bidding out its fuel
requirements under a multiple supplier set-up whereby PAL awarded to the lowest bidder sixty percent (60%) of its fuel
requirements and to the second lowest bidder the remaining forty percent (40%), provided it matched the price of the
lowest bidder.

ISSUE:

Whether or not Philippine airlines is a government owned corporation.

RULING:

Once again, we find ourselves compelled to dismiss the petition. Pursuant to the government’s privatization
program, PAL’s shares of stock were bidded out early this year, resulting in the acquisition by PR Holdings, a private
corporation, of 67% of PAL’s outstanding stocks. PAL, having ceased to be a government-owned or controlled corporation, is
no longer under the audit jurisdiction of the COA. Accordingly, the question raised in this petition has clearly become moot
and academic.
CIR v. COA
218 SCRA 203 [1993]
John Carlo L. Peñaranda

DOCTRINE: SECTION 2. (1) The Commission on Audit shall have the power, authority, and duty to examine, audit, and settle
all accounts pertaining to the revenue and receipts of, and expenditures or uses of funds and property, owned or held in
trust by, or pertaining to, the Government, or any of its subdivisions, agencies, or instrumentalities, including government-
owned or controlled corporations with original charters

FACTS:

On June 25, 1986, petitioner Tirso B. Savellano furnished the Bureau of Internal Revenue (BIR) with a confidential
affidavit of information2 denouncing the National Coal Authority (NCA) and the Philippine National Oil Company (PNOC) for
non-payment of taxes totalling P234 Million on interest earnings of their respective money placements with the Philippine
National Bank (PNB) since October 15, 1984 to said date. Investigation by the BIR confirmed the reported tax liabilities, and
upon demands thereafter made, NCA and PNOC paid to the BIR the taxes corresponding to their period. Petitioner Tirso
Savellano questions the COA disallowance on the ground that the express statutory grant to BIR of the power to allow or
disallow claims for payment of tax informer's reward is an implied statutory denial of the same power to the COA, which
would otherwise transform said respondent into "a super tax authority" and "undermine and dilute the substance and
efficacy of the very entity created and empowered by law to collect taxes and augment the government's revenue collecting
potentials."

ISSUE:

Whether or not the COA has jurisdiction

RULING:

Yes. The final determination by the Department of Finance, through the recommendation of the BIR, of petitioner
Savellano's entitlement to the informer's reward is, under Section 90, conclusive only upon the executive agencies
concerned. Respondent COA is not an executive agency. It is one of the three (3) independent constitutional commissions.
Specifically, it is the constitutional agency vested with the "power, authority and duty to examine, audit and settle all
accounts pertaining to the revenue and receipts of, and expenditures or uses of funds and property owned or held in trust
by he government, or any of its subdivisions, agencies or instrumentalities."
CSC v. Pobre
GR 160568, SEPT 15, 2004
John Carlo L. Peñaranda

DOCTRINE: Where government expenditures or use of funds is involved, the CSC cannot claim an exclusive
domain simply because leave matters are also involved. The COA and CSC are equally pre-eminent in their
respective spheres. Neither one may claim dominance over the others

FACTS:
Respondent Hermogenes P. Pobre is a former government official who retired from the government service
three times. He first retired as commissioner of the Commission on Audit (COA) on March 31, 1986. He reentered
the government and retired as chairman of the Board of Accountancy. He was then appointed as associate
commissioner of the Professional Regulation Commission (PRC) of which he retired eventually as chairman. The
first two times he retired, he received his terminal leave pay both times. On his third retirement, respondent Pobre
claimed payment of his terminal leave based on his highest monthly salary as PRC chairman but to be reckoned
from the date he first entered the government service as budget examiner. He invoked Section 13 of
Commonwealth Act 186.Doubtful of the legality of the claim, PRC chairperson sought the opinion of both COA
and CSC. CSC said however that all respondent Pobre was entitled to were his terminal leave benefits based only
on his accrued leave credits from the date of his assumption to office as PRC chairman and not his total terminal
leave credits, including those earned in other government agencies from the beginning of his government
service.On appeal, the CA ruled that it is the COA who has jurisdiction and not CSC.
ISSUE:
Whether or not it is the COA and not the CSC has the exclusive jurisdiction to pass upon the validity of
respondent's claim for terminal leave?

RULING:
No. While the determination of leave benefits is within the functions of the CSC as the central personnel
agency of the government, the duty to examine accounts and expenditures relating to such benefits properly
pertains to the COA. Where government expenditures or use of funds is involved, the CSC cannot claim exclusive
jurisdiction simply because leave matters are involved. Thus, even as we recognize CSC’s jurisdiction in this case,
its power is not exclusive as it is shared with the COA. While the implementation and enforcement of leave
benefits are matters within the functions of the CSC as the central personnel agency of the government, the duty to
examine accounts and expenditures relating to leave benefits properly pertains to the COA. Where government
expenditures or use of funds is involved, the CSC cannot claim an exclusive domain simply because leave matters
are also involved. The COA and CSC are equally pre-eminent in their respective spheres. Neither one may claim
dominance over the others. In case of conflicting rulings, it is the Judiciary which ascertains which shall prevail.
Here, there is no conflicting ruling to speak of because the COA is yet to render its opinion on PRC’s query
regarding respondent Pobre’s claim for terminal leave benefits. The court thus finds it prudent to abstain from any
pronouncement on this issue and to wait for COA to rule on respondent’s claim.
Luciano Veloso, et al. V. COA
GR 193677, September 6, 2011
John Carlo L. Peñaranda

DOCTRINE: ART IX-D SECTION 2(2) provides that; The Commission shall have exclusive authority, subject to
the limitations in this Article, to define the scope of its audit and examination, establish the techniques and
methods required therefor, and promulgate accounting and auditing rules and regulations, including those for the
prevention and disallowance of irregular, unnecessary, excessive, extravagant, or unconscionable expenditures or
uses of government funds and properties.

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. Section 2 thereof provides:

            SEC. 2. The EPSA shall consist of a Plaque of Appreciation, retirement and gratuity pay remuneration
equivalent to the actual time served in the position for three (3) consecutive terms, subject to the availability of
funds as certified by the City Treasurer. 

            Pursuant to the ordinance, the City made partial payments to some former city councilors including herein
petitioners the total amount of P9,923,257.00.The Director, Legal and Adjudication Office (LAO)-Local of the
COA issued ND No. 06-010-100-05 dated May 24, 2006.The COA sustained the Notice of Disallowance

ISSUE:

            (1) Whether the COA has the authority to disallow the disbursement of local government funds

           (2) Whether the COA committed grave abuse of discretion in affirming the disallowance of P9,923,257.00
covering the EPSA of former three-term councillors of the City of Manila authorized by Ordinance No. 8040.

RULING:

            Under the 1987 Constitution, however, the COA is vested with the authority to determine whether
government entities, including LGUs, comply with laws and regulations in disbursing government funds, and to
disallow illegal or irregular disbursements of these funds. Thus, LGUs, though granted local fiscal autonomy, are
still within the audit jurisdiction of the COA. However, in line with existing jurisprudence, we need not require the
refund of the disallowed amount because all the parties acted in good faith
Boy Scouts of the Philippines v. Commission on Audit
G.R. No. 177131, June 7, 2011
John Carlo L. Peñaranda

DOCTRINE: Article IX-D Section 2(1) of the Constitution provides that the Commission on Audit shall have the
power, authority and duty to examine , audit, and settle all accounts pertaining to the revenue and receipts of, and
expenditures or uses of funds and property ,owned or held in trust by, or pertaining to, the Government, or any of
its subdivisions, agencies ,or instrumentalities , including government-owned or controlled corporations with
original charters and on a post audit basis.

FACTS:

This case arose when COA issued Resolution No. 99 with the subject “Defining the Commissions policy
with respect to the audit of the Boy Scouts of the Philippines.” In its whereas clauses, the COA Resolution stated
that the BSP was created as a public corporation under Commonwealth Act No. 111, as amended by Presidential
Decree No. 460 and Republic Act No. 7278; that in Boy Scouts of the Philippines v. National Labor Relations
Commission, the Supreme Court ruled that the BSP, as constituted under its charter, was a “government-controlled
corporation within the meaning of Article IX(B)(2)(1) of the Constitution”; and that “the BSP is appropriately
regarded as a government instrumentality under the 1987 Administrative Code.”The COA Resolution also cited its
constitutional mandate under Section 2(1), Article IX (D).Finally, the COA Resolution reads: NOW
THEREFORE, in consideration of the foregoing premises, the COMMISSION PROPER HAS RESOLVED, AS
IT DOES HEREBY RESOLVE to conduct an annual financial audit of the Boy Scouts of the Philippines in
accordance with generally accepted auditing standards, and express an opinion on whether the financial statements
which include the Balance Sheet, the Income Statement and the Statement of Cash Flows present fairly its financial
position and results of operations.

BE IT RESOLVED FURTHERMORE, that for purposes of audit supervision, the Boy Scouts of the
Philippines shall be classified among the government corporations belonging to the Educational, Social, Scientific,
Civic and Research Sector under the Corporate Audit Office I, to be audited, similar to the subsidiary corporations,
by employing the team audit approach.

ISSUE:

Whether or not Boy Scout of the Philippines is a government owned and controlled corporation subject for COA’s
audit jurisdiction.

RULING:

Yes. After looking at the legislative history of its amended charter and carefully studying the applicable
laws and the arguments of both parties, we find that the BSP is a public corporation and its funds are subject to the
COA’s audit jurisdiction. The BSP Charter (Commonwealth Act No. 111, approved on October 31, 1936), entitled
“An Act to Create a Public Corporation to be known as the Boy Scouts of the Philippines, and to define its Powers
and Purposes” created the BSP as a “public corporation” to serve the following public interest or purpose:

Sec. 3. The purpose of this corporation shall be to promote through organization and cooperation with other
agencies, the ability of boys to do useful things for themselves and others, to train them in scout craft, and to
inculcate in them patriotism, civic consciousness and responsibility, courage, self-reliance, discipline and kindred
virtues, and moral values, using the method which are in common use by boy scouts.

Tecson v. Comelec
G.R. No. 161434, March 3, 2004
John Carlo L. Peñaranda

DOCTRINE
The 1935 Constitution on Citizenship, the prevailing fundamental law on respondent’s birth, provided
that among the citizens of the Philippines are "those whose fathers are citizens of the Philippines
FACTS:
Petitioners sought for respondent Poe’s disqualification in the presidential elections for having allegedly
misrepresented material facts in his (Poe’s) certificate of candidacy by claiming that he is a natural Filipino citizen
despite his parents both being foreigners. Comelec dismissed the petition, holding that Poe was a Filipino Citizen.
Petitioners assail the jurisdiction of the Comelec, contending that only the Supreme Court may resolve the basic
issue on the case under Article VII, Section 4, paragraph 7, of the 1987 Constitution.

ISSUE:
Whether or not Comelec committed grave abuse of discretion in holding that Poe was a Filipino citizen.

RULING:
No, the 1935 Constitution on Citizenship, the prevailing fundamental law on respondent’s birth, provided
that among the citizens of the Philippines are "those whose fathers are citizens of the Philippines." Tracing
respondent’s paternal lineage, his grandfather Lorenzo, as evidenced by the latter’s death certificate was identified
as a Filipino Citizen. His citizenship was also drawn from the presumption that having died in 1954 at the age of
84, Lorenzo would have been born in 1870. In the absence of any other evidence, Lorenzo’s place of residence
upon his death in 1954 was presumed to be the place of residence prior his death, such that Lorenzo Pou would
have benefited from the "en masse Filipinization" that the Philippine Bill had effected in 1902. Being so, Lorenzo’s
citizenship would have extended to his son, Allan respondent’s father. Respondent, having been acknowledged as
Allan’s son to Bessie, though an American citizen, was a Filipino citizen by virtue of paternal filiation as
evidenced by the respondent’s birth certificate. The 1935 Constitution on citizenship did not make a distinction on
the legitimacy or illegitimacy of the child, thus, the allegation of bigamous marriage and the allegation that
respondent was born only before the assailed marriage had no bearing on respondent’s citizenship in view of the
established paternal filiation evidenced by the public documents presented. But while the totality of the evidence
may not establish conclusively that respondent FPJ is a natural-born citizen of the Philippines, the evidence on
hand still would preponderate in his favor enough to hold that he cannot be held guilty of having made a material
misrepresentation in his certificate of candidacy in violation of Section 78, in relation to Section 74 of the Omnibus
Election Code.