7 fod REPUBL:C OF THE PHILIPPIND » f COMMISSION ON AUDIT hk COMMISS DN ON. Aul TO Heads, of Departments, Bureaus and Offices of National Government; Managing Heads and Gover Bodies of Government-owned and/or controlled Corporations, including their Subsidiaries, Self- governing Boards, Commissions or Agencies, and State Col and Universities; Local chief Bxecutives; Accountable Officer COA, Directors, Directors and Unit Auditors; and Others Concerned. SUBJECT: Prohibition inst employment by government agencies instrumentalities, including government-owned or controlled corporations, of private lawyers to handie their legal cases. For the information and guidance of all concerned, quoted hereunder are excerpts from the decision of the Supreme Court In the case of the Municipality of Pililla, Rizal vs. Court of Appeais, et. al., G.R. No. 105909, promulgated on June 28, 1994: “Under the above-provision (Section 1683 of the Revised Administrative Code), complemented by Section 3, Republic Act No. 2264, the Local Autonomy Law, only the Provincial Figcal and the Municipal Attorney can represent a Province or Municipality in their lawsuits. The provision is mandatory. The municipality's authority = uploy a private lawyer: is expressly limited only to aituations where the Provincial Fiscal ig disqualified to represent it “ror the aforent fact that the Pro the Municipality’ ntLoned exception to apply, the yincial Fiscal Disqualified to handle 8 case must appear on record. In the instant case, there ig nothing in the records to show that the Provincial Fiscal is disqualified to act as Counsel for the Minicipality of Pililla on appeal, hence the appearance of herein private Counsel 16 without authority of Law The decision of the Supreme Court in the above case clearly indicates that where a government agency is provided by law with @ legal officer or office who or which can handle its legal requiréwents of cases in courts, it {agency} may not bs allowed to hire the services of private lawyers for a fee, chargeable dnst public funds, unless exceptional or extraordinary circumstances obtain 4s exemplified in the above-cited case of Municipality of Pililla, Rizal vs. Court of Appeals, et. al. a WA CERTIFIED COPY ON FILE Commission on Audit Administration Sector (as Reededs Manage Is Manage General Servi A pe Shis toent # 2 Accordingly and pursuant to this Commission's exclusive A authority to promulgate accounting and auditing rules and regulations, including for the prevention and disallowance of irregular, unnecessary, | excessive, extravagant and/or unconscionable expenditure or uses of public funds and property (Sec. 2-2, Art. IX-D, Constitution), public funds shall not be utilized for payment of the services of a private legal counsel or law firm to represent dévernment agencies in court or. to render legal services’ for them. In the event that such legal services caniel be avoided or ts Justified under extraordinary or exceptional Circumstances, the written conformity and quiescence of the Solicitor General or the Government Corporate sel, as the case may be, and the written concurrence of the ission on Audit shall first be secured beforé the hiring or nt of a private lawyer or law firm. is or modifies COA Circular No. 86-255, dated April 2, 1986 and all other existing COA issuances inconsistent herewith. This Circular shall take effect immediate): BSPyRrTU aoa Commissioner SOFRONIO B. URSAL Commissioner NAA/JAG/al1 private-Lawyers WG CERTIFIED COPY ON FIL! Commission on Audit Adinlaistration Sector ANG Chief 2 bagcment Services General Services Office po he sfeyfte Records Mani % ANNEX PUBLIC OF THE PHILIPPINES. COMMUESSION ON AUDI Caecum auecdee caer teal RE COMMISSION ON AUDIT CIRCULAR No. 98-_@02 ,/ Other Loca} Chief ‘BR: Regional Directors, Heads of ‘Provincial, Municipal and Circuit Municipal Audit units, All Others Concerned To + -Provincial Governors, City and Municipal Mayors, tives, COA Directors, SUBJECT: Prohibition against employment by local govern~ = ment units of private lawyers to handle legal cases. For the information and guidance of all concerned, quoted hereunder are excerpts from the letter of Silvestre H. Bello TII, Solicitor General, dated January 27, 1997, to this Commission: January 27, 1997 HON. CELSO D. GANGAN cChairuan Commission on Audit Commonwealth Avenue Quezon City Sin This has reference to the numerous requests for deputation of private lawyere at the instance of local government units (LGUs) under a supposedly legal anchor on COA Circular No. 95-011 dated December 4, 1995. COA Circular No. 95-011 provides in pertinent part: "x x x x, In the event that such legal_services cannot be avoided or is justified under extraordinary or except~ ional circumstances, the written conform ERTIPIED COPY ON FALE snunisston op Andit ipnteistrati Management Servie General Services Office OSfsfu” ity and acquiescence of the Solicitor General or the Government Corporate Counsel, as the case may be, and the written concurrence of the Commission on Audit shall be first secured before hiring or employment of a private lawyer or law firm." ‘ This part of the Circular is but a reiteration of an earlier one, COA Circular No. 86-255, dated April 22, 1986, xx xX Xx. The Circular first quoted above would at first blush seem to include LGUs to be serviced by private lawyers or law firms when duly authorized or deputized by the Solicitor General. This posture, however, will run afoul of the Local Government Code of 1991, RA 7160, under which the authority of the Solicitor General to deputize such lawyers or firms is not recognized or is withdrawn. ‘x x x x xX. Under Section 481 of RA 7160, 4t is the legal officer of a municipality who must handle its legal affairs, including repregentation in court. In the absence of the Municipal Legal Officer, the Provincial Legal Officer also serves as the legal officer of the municipality. He 1s disqualt- fied from being such only “in actions or proceedings where a component city or municipality is the party adverse to the provincial government or to another component city or municipality (see pac. 3(1) of Section 481 of RA 7160). xx x x. / Aside from the Provincial Legal Officer, the municipality may secure the services of the Provincial Prosecutor. x x x except in cases in which original jurisdiction is vested in the Supreme Court or the adverse party is the province itself (CE. Province of Cebu vy. Intermediate Appellate Court, 147 SCRA 447 [1987]). x x x x The case of Municipality of Pililia, Rizal v. CA, et al., 233 SCRA 484 (1994), cited in Circular No, 95-011, would even iend support to the position that only the Provincial Fiscal (Provincial Prosecutor) and the Municipal Attorney can represent @ province or municipality in their lawsults. Finally, Section 481, third paragraph, of RA 716@ provides that "the appointment of a legal : i be CERTIFIED COPY ON FILE von Audit “ctor Commis Adhuiistratio a f yivEcA Chiet ; ds Manaxciment Services Views Office ACR? tafe NSANO:officer shall be mandatory for the provincial and city governments and optional for the municipal government." Evidently, provincial and city govern- ments have no choice but to appoint their respective legal officers, hence, they cannot under any condition be represented by a private Lawyer or law firm. In case of municipal governments, the lew provides that the appointment of a legal officer is “optional.” However, the permissiveness of such appointment must be construed only in cases of budgetary limitation. Thus, the municipality may opt not to appoint a municipal legal officer by reason of financial constraint. But it cannot at some point request the deputation of private lawyers to handle its cases. It is non sequitur For it is well accepted that the fees of private lawyers are exorbitant. To make an antithetica’ construction would indirectly sanction what the law and jurisprudence directly prohibit. To recapitulate, the OSG is not the lega counsel of the LéUs.' Not being their lewyér, the OSG cannot also deputize private lawyers to handle their cases. KX xX KK. very truly yours, (SGD) SILVESTRE H. BELLO ITT Solicitor General” In view thereof, the last paragraph of COA Circu lars Number 95-011 and 86-255, dated December 4, 1995 and April 2, 1986, respectively, are hereby amended insofar as are concerned, to read as follows: "Accordingly and pursuant to this Commission’s exclusive authority to promulgate accounting and auditing rules and regulations, including for the prevention and disallowance of irregular, unneces~ sary, excessive, extravagant and/or unconscionable expenditure or uses of public funds and property (Sec. 2-2, Act. IX-D, Constitution), public funds shall not be utilized for payment of the services of a private legal counsel or law firm to represent government agencies and_—sAnstrumentalities including government-owned “or controlled — =F RTIFIED COPY ON FILE, Connaission on Audit istration Sector jleeda Chief agemen nt Servi Coneral Services Office: !Sjiafie LGUs. corporations and local government units in court or to render legal services for them. In the event that such legal sérvices canhot be avoided or ts justified under extraordinary or — exceptiona Circumstances for government agencies — and Including government-owned or he written conformity and acqulescence of the Solicitor General or the Government Corporate Counsel, as the case maybe and the written concurrence of the Commission on Audit shall first be secured before the hiring or employment of a private lawyer or law firm. With respect to local government units, only in those instances provided in par. 3(1), Section 481 of R.A. 7160, which states, thus x x x X + Provided, That, in actions or proceedings where a component city or municipality is a party adverse to the provincial government or to another component city or municipality, a special legal officer may be employed to represent the adverse party;" may public funds be utilized as payment for the services of a private legal counsel or law firm.” This Circular shall take effect immediately. ‘BESO D. GANGAN idles 7 dre > RONLO B. URS EEGL C. FLOR Commissioner Commissioner GAO a “ CSS /RDT/BEC/LDG qs pvt. lawyer Lego CERTIFIED COPY ON FILE Commission on Andit Adniinistration Sector Mate... corde xe, biel Records Mauaxement Services General Services Office eC S131