VIA MARIA I.

MALAPOTE
Final Position Paper in FMG

PART III

CHECK AND BALANCES: AUDIT AND ACCOUNTABILITY IN

PHILIPPINE PUBLIC FINANCES

Immediately after Aquino’s assumption to office, she promulgated the

“Freedom Constitution” which, among other provisions, declared all government
positions vacant unless otherwise identified (Section 3, March 28, 1986). This
Freedom Constitution was the basic law of a revolutionary government and was
superseded by the Constitution of 1987. Six new anti-corruption laws emerged under
its operation.
The Administrative Code of 1987 (Executive Order No. 292)6 incorporates in a
unified document the major structural, functional and procedural principles and rules
of governance. It reiterates public accountability as the fundamental principle of
governance. In 1989, the Republic Act No. 6713, the Code of Conduct and Ethical
Standards for Public Officials and Employees was passed. It promotes a high
standard of ethics and requires all government personnel to make an accurate
statement of assets and liabilities, disclose net worth and financial connections. It
also requires new officials to divest ownership in any private enterprise within 30
days from assumption of office, to avoid conflict of interest. The Ombudsman Act of
1989 (RA 6770) provides the functional and structural organization of the Office of
the Ombudsman. The Act further defining the Jurisdiction of the Sandiganbayan (RA
8249) places the Sandiganbayan as a special court on par with the Court of Appeals.
The Philippine government is directed to maintain honesty and integrity in the
public service, and to take action against graft and corruption (Section 27, Art. II). It
is also directed to give full public disclosure of all transactions involving the public
interest (Section 28, Art. II). This provision is complemented by the Bill of Rights
within the Constitution, which gives people the right to information on matters of
public concern, including official records, documents and papers pertaining to official
acts, transactions or decisions, and to government research data used as the basis for
policy development (Section 7, Art. III).
 The 1987 Constitution of the Philippines provides the basis of ethical and
accountable behavior in the public sector. Section 1 of Article XI states that: Public
office is a public trust. Public officers and employees must at all times be accountable
to the people, serve them with utmost responsibility, integrity, loyalty, and efficiency,
act with patriotism and justice, and lead modest lives. This provision requires every
public official and employee to exhibit and live certain values while in government
service. In addition, the State has been mandated by the Constitution to “maintain
honesty and integrity in the public service and take positive and effective measures
against graft and corruption”.

The Government Accountability Agencies

The Philippine government has agencies mandated to ensure accountability and
transparency on its overall operations. These agencies are: The Office of the
Ombudsman, Sandiganbayan, Presidential Anti-Graft Commission, the Civil
Service Commission, and the Commission on Audit.  

Office of the Ombudsman

The people’s protector and watchdog

The Office of the Ombudsman (Ombudsman) is mandated by the Constitution as

“protectors of the people who shall act promptly on complaints filed against officers
or employees of the government including members of the Cabinet, local government
units and government-owned and controlled corporations and enforce their
administrative, civil and criminal liability in every case where the evidence warrants
in order to promote efficient service by the government to the people.” Significantly,
Section 13 of Republic Act 6770 or the Ombudsman Act of 1989 states it shall give
priority to “high-profile complaints to high-ranking and supervisory officials involved
with grave offenses and large sums of money and/or properties.” The Ombudsman
does not only cover officials and employees of the government, but also private
individuals who have participated or “in conspiracy” with them in the filed
complaints.  
The number of cases filed by the Ombudsman against government officials went up
by 267% in 2016, according to the Sandiganbayan Judicial Records Division.
The Ombudsman filed a total of 1,311 cases in 2016, much higher than the 357 filed
in 2015. It was the first time since 1995 that the agency filed more than a thousand
cases.
Based on the Sandiganbayan report, 418 cases were filed in the first half of 2016 –
still under former president Benigno Aquino III – while 893 were filed from June to
December 2016, mostly under the Duterte administration.
In total, the agency has filed a total of 3,966 cases against erring public officials since
Ombudsman Conchita Carpio-Morales was appointed in 2011.
The top offense is violation of Republic Act 3019 or the Anti-Graft and Corrupt
Practices Act (402 cases), followed by malversation of public funds (390 cases),
violation of presidential decrees (112 cases), and falsification of public documents (72
cases).

Case: PDAP
The  Priority Development Assistance Fund scam, also called the PDAF
scam or the pork barrel scam, is a political scandal involving the alleged
misuse by several members of the Congress of the Philippines  of
their Priority Development Assistance Fund (PDAF, popularly called
"pork barrel"), a lump-sum discretionary fund granted to each member of
Congress for spending on priority development projects of the Philippine
government, mostly on the national level.
The scam was first exposed in the Philippine Daily Inquirer on July 12,
2013,  with the six-part exposé of the Inquirer on the scam pointing to
businesswoman Janet Lim-Napoles as the scam's mastermind after
Benhur K. Luy, her second cousin and former personal assistant, was
rescued by agents of the National Bureau of Investigation on March 22,
2013, four months after he was detained by Napoles at her unit at
the Pacific Plaza Towers in Fort Bonifacio. Initially centering on
Napoles' involvement in the 2004 Fertilizer Fund scam, the government
investigation on Luy's testimony has since expanded to cover Napoles'
involvement in a wider scam involving the misuse of PDAF funds from
2003 to 2013.
It is estimated that the Philippine government was defrauded of some ₱10
billion in the course of the scam, having been diverted to Napoles,
participating members of Congress and other government officials. Aside
from the PDAF and the fertilizer fund maintained by the Department of
Agriculture, around ₱900 million in royalties earned from
the Malampaya gas field were also lost to the scam.(Philippine Daily
Inquirer. July 12, 2013)

Case: Euro Generals

Facts:
Eight police officers and Eliseo de la Paz along with the spouses of some
police officials and General Jesus Versoza went to Russia to attend the
International Police Conference last October 2008. Former PNP
comptroller Eliseo de la Paz and his wife were briefly detained and
interrogated at the Moscow international airport for carrying an
undeclared 105,000  euros  or ₱6.9 million in cash.
Decision: 
Investigators said the amount came from “private funds.” The team said
the PNP officials violated section 3(e) of the Anti-Graft and Corrupt
Practices Act. The Field Investigation Office anchored its
recommendations on an alleged violation of Article 217 of the Revised
Penal Code, or Malversation of funds. The FIO recommended the filing of
several criminal and administrative charges against several of the
respondents. The recommended charges were falsification of public
documents, prolonging of performance of duties, violation of the passport
law, obstruction of the apprehension and prosecution of criminal
offenders, perjury, and violation of the New Central Bank Act.

Case: COA vs Nandang

The Office of the Ombudsman has approved the filed a case against former
Zamboanga Del Sur Mayor Wilson Nandang for alleged failure to liquidate
funds amounting to P1.25 million. Nandang is facing charges of 10 counts
each for violating Articles 217 (Malversation of Public Funds) and 218
(Failure of Accountable Officer to Render Accounts) of the Revised Penal
Code (RPC).
 According to a statement from the Ombudsman, Nandang received 10
cash advances for travel expenses from January to August of 2011.
The Ombudsman said cash advances for domestic travels must be liquidated
within 30 days upon the return to official station, under Commission on
Audit (COA) Circular No. 97-002. Article 217 of the RPC states that
malversation is committed by a public officer who is accountable for public
funds or property, by reason of duties of office, and appropriates the same
or misappropriates public funds or properties, wholly or partially.
Meanwhile, violation of Article 218 of the RPC is committed by a public
officer, whether in service or therefrom by resignation or any other cause,
who, required by law or regulation to render account to the provincial
auditor and fails to do as such two months after accounts are meant to be
rendered.

The law assigns the Office of the Ombudsman (OMB) a pivotal role in ensuring
integrity and deterring corruption in the public sector. The threat of prosecution
and conviction of public wrong-doers is a potent sanction against corruption. This
will not be regarded as a credible threat without a reliable and effective OMB that
demonstrates credible leadership and publicly measurable success

The Sandiganbayan
A special court that hears cases of graft and corruption

The Sandiganbayan, or the government’s anti-graft court, is mandated by the 1973

and 1987 Constitutions. It covers criminal and civil cases against graft and corrupt
practices and other offenses committed by public officers and employees with Salary
Grade 27 and above, including those in local government units and government-
owned or controlled corporations, which are related to their official duties as
determined by law.  Crimes and civil cases filed against public officers below Salary
Grade 27 are covered by the Regional Trial Court but Sandiganbayan is vested with
Appellate Jurisdiction over its final judgments, resolutions or orders. Private
individuals can also be sued before this special court if they are alleged to be in
conspiracy with public officers. The Sandiganbayan is also entrusted to have original
exclusive jurisdiction over special laws such as RA 3019 (Anti-graft and Corrupt
Practices Law), RA 1379 (Forfeiture of Illegally Acquired Wealth), Revised Penal
Code spec. Batasang Pambansa 871. Presidential Anti-Graft Commission The
Presidential Anti-Graft Commission (PAGC) is mandated by Executive Order No. 12
to assist the President in the campaign against graft and corruption. It investigates and
conducts hearings of administrative cases and complaints against Presidential
appointees in the Executive Branch with Salary Grades 26 and higher including
members of the Armed Forces of the Philippines and Philippine National Police of
directed by the President, government-owned and controlled corporations and public
officers, employees and private persons in conspiracy with alleged public officials.
PAGC’s jurisdiction includes the following laws: RA 3019, RA 1379, 6713, Revised
Penal Code, and E.O. 292.  

Cases vs SandiganBayan
The plunder and graft cases filed before the Ombudsman against the 3
senators implicated in the controversial pork barrel scam involve what
appear to be among the highest amounts in terms of ill-gotten money in the
country's history.
Of the three, the cases against Senator Ramon Revilla Jr involve the highest
amounts (a total of P517 million or $11.87 million for graft, and P224
million or $5.14 million for plunder), followed by Senator Juan Ponce
Enrile (P345 million or $7.92 million for graft, P172 million or $3.95
million for plunder) and Senator Jinggoy Estrada (P278 million or $6.38
million for graft, P183 million or $4.2 million for plunder).
However high these figures may be, they still aren't the highest figures in
the history of the anti-graft court. The Sandiganbayan database shows that
from 1979 to 2013, there are 7 cases that involve amounts higher than those
in Revilla's graft charge.
Here's a list of 10 cases that involve the highest amounts ever handled by
the Sandiganbayan, as reflected in the anti-graft court's database.

1. P4.098 billion ($94.05 million) – plunder case vs former president

Joseph Estrada and 7 others
The plunder case filed in 2001 against Estrada involves the highest amount
handled by the anti-graft court so far. The case, filed after he was ousted in
2000, involves his acceptance of proceeds from the illegal numbers game
jueteng and his ownership of huge amounts of money in a bank account
under the name Jose Velarde.
Estrada was convicted in September 2007, and was detained until he was
granted presidential pardon a month later. The Sandiganbayan's 2013
compliance report says he still owes the government over P400 million,
roughly US$9 million. (READ: No closure yet on Erap Estrada’s plunder
case)
Incidentally, his son Jinggoy is among those implicated in this case, but he
was acquitted (along with Edward Serapio) in 2007. (READ:  How Jinggoy
got away in his first plunder charge)

2. P818 million ($18.77 million) – graft case vs officials of Philippine

Export and Foreign Loan Guarantee Corporation (Philguarantee) and
two others
Philguarantee executive vice-president Cesar Macuja, vice chairman
Rosendo Bondoc, Ronaldo Zamora (personal lawyer of former president
Ferdinand Marcos) and Vicente Chuidan were charged in 1993 for
violating section 3(a) of Republic Act 3019, or the Anti-Graft and Corrupt
Practices Act.
Section 3(a) of the said law states that it is unlawful for public officials to
"[persuade, induce or influence] another public officer to perform an act
constituting a violation of rules and regulations duly promulgated by
competent authority or an offense in connection with the official duties of
the latter, or allowing himself to be persuaded, induced, or influenced to
commit such violation or offense."
Chuidian was allegedly a dummy of the Marcoses in several companies,
and was said to have influenced the Philguarantee officers to facilitate the
procurement and issuance of a loan guarantee in favor of the Asian
Reliability Company Incorporated (ARCI) – which was 98% owned by
Chuidian. Philguarantee is a government-owned entity created by former
president Ferdinand Marcos in 1974 to guarantee loans for promoting
businesses in the Philippines.
This case was dismissed in 1998.

3. P694 million ($15.93 million) – graft case vs National Sugar Trading

Corporation (NASUTRA) offficials
NASUTRA officials Roberto Benedicto (chairman of the board), Jose Unson
(executive vice president), and Jaime Dacanay (vice president) were
charged with violation of section 3(e) of RA 3019 for importing raw sugar
without prior authority.
Section 3(e) of the said law states that it is unlawful for public officials to
"[cause] any undue injury to any party, including the Government, or
giving any private party any unwarranted benefits, advantage or preference
in the discharge of his official administrative or judicial functions through
manifest partiality, evident bad faith or gross inexcusable negligence. This
provision shall apply to officers and employees of offices or government
corporations charged with the grant of licenses or permits or other
concessions."
The illegal sugar importation was said to have "[forced] local sugar prices
to go down and coerce/compel sugar producers or traders to restore sugar
trading and control back to NASUTRA and thus enabling the accused
NASUTRA officers to rake in millions of pesos in profit and commission
from sugar trading along to the damage and prejudice of the government
and the public interest."
The case was dismissed in 1997.

4. P685 million ($15.72 million) – graft case vs judiciary employees and 4

others
Manila RTC deputy register of deeds Yolanda Alfonso, branch clerk of
court Raymundo Vallega, and 4 private individuals were charged in 1994
for violating section 3(e) of the anti-graft law.
No other information is easily available about this case, except for what the
Sandiganbayan database indicate: that the case was "transferred to other
court" in 1995.
5. P660 million ($15.15 million) – graft case vs Government Service
Insurance System (GSIS) officials
GSIS vice president/comptroller Richard Martinez and chief executive
officer Amado Epino were charged in 2000 for violating section 3(e) of RA
3019.
Like the previous case, no other information is available except that it was
withdrawn by the Office of the Special Prosecutor in 2001.

6. P533 million ($12.23 million) – 2003 graft case vs Public Estates

Authority (PEA) officials and 6 state auditors
In 2003, 20 PEA officials and some state auditors from the Commission on
Audit (COA) were charged with violation of section 3(e) of RA 3019 in
relation to the overpriced Diosdado Macapagal Boulevard.
It was revealed by former PEA board director Sulficio Tagud that the
project was overpriced, and that all requests by contractor JD Legaspi
Construction for price adjustment were approved by the PEA board. Based
on the Sandiganbayan database, the case remains pending.

7. P520 million ($11.93 million) – graft case vs former trade minister

Roberto Ongpin, former Bangko Sentral ng Pilipinas chief Jaime Laya,
and former Philguarantee president Rosendo Bondoc
A graft case was filed in 1995 against Ongpin, Laya and Bondoc for
violating section 3(e) of RA 3019 after they allegedly conspired in the
approval of a big loan of the Construction and Development Corporation of
the Philippines.
The case against Ongpin was dismissed in 2003, while the case against
Bondoc was dismissed in 2004. As for Laya, his case was dismissed also in
2004 after the Sandiganbayan upheld the immunity granted to him by the
Presidential Commission on Good Government (PCGG).

8. P511 million ($11.73 million) – graft case vs former Philippine

National Bank (PNB) vice president Domingo Ingco Sr and two others
Ingco, along with top officials of Cresta Monte Shipping Corporation, was
charged in 1993 with violation of sections e and g of RA 3019 for
conspiring to have the company's loan applications approved even without
some of the necessary requirements satisfied.
Violation of section g of the law refers to "entering, on behalf of the
Government, into any contract or transaction manifestly and grossly
disadvantageous to the same, whether or not the public officer profited or
will profit thereby."
The case was dismissed in 1997.

9. P432 million ($9.91 million) – graft case vs. Development Bank of the
Philippines (DBP) officials
DBP chairman Rafael Sison and executive vice president Jose Tengco Jr
were charged in 2011 for violation of section 3(e) of RA 3019.
No other information is easily available, except that the case remains
pending.
Sison was acquitted by the anti-graft court for a separate graft case in 2012
for extending a loan guarantee to a company that has allegedly not
provided sufficient collateral.

10. P400 million ($9.18 million) – graft case vs Gregorio Araneta III (son-
in-law of former president Marcos) and 8 others
A graft case was filed in 1986 after the supposed transfer of a major portion
of the assets of the Pantranco North Express Inc (PNEI) to the North
Express Transport Inc (NETI), a newly-organized corporation principally
owned and controlled by Araneta.
An investigation reportedly show that there were certain terms and
conditions that made it possible to permit PNEI assets, including those
which were not included in a projected sale to NETI, to be prematurely
delivered to NETI.
Those charged with violation of RA 3019 were Araneta and officials of the
Philippine National Bank (PNB), National Investment and Development
Corporation (NIDC), and PNEI. The case against Araneta and 4 others
were dismissed, while the 4 others were acquitted.
Other big cases
The plunder case filed in 2012 against former president Gloria Macapagal
Arroyo and 9 others placed 12th in the list, as it invoves P365 million
($8.38 million). The case is in connection with the alleged misuse of
Philippine Charity Sweepstakes Office (PCSO) intelligence funds during the
latter years of Arroyo's administration. (READ: Arroyo, 9 others charged
with plunder)
The case was filed a week before President Benigno Aquino III delivered his
State of the Nation Address (SONA) that same year.
Meanwhile, the case filed in 2005 against former military comptroller
Major General Carlos Garcia ranks 15th with P303 million ($6.95 million).
Garcia, his wife and 3 children were charged for illegal accumulation of
wealth.
The Office of the Ombudsman entered in February 2010 into a plea bargain
agreement with Garcia. The Supreme Court issued a temporary restraining
order on the plea bargain deal in 2013. (READ: SC stops Garcia plea
bargain deal) (Rappler.com)

  Case: Aguinaldo v Sandiganbayan

Facts:
Petitioner is the Provincial Governor of Cagayan. At the time material to
this decision he was serving his first term as Governor of that province.
In 1990, 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 (SAO Report No. 90-25),

Decision:
Indeed, petitioner failed to submit certain documents required by COA rules
to support claims for disbursements. His counter-affidavit falls short of the
 requirements of COA Circular No. 88-293 which, while allowing the use of
“mere certification” to support liquidation vouchers (Par. VII(G)),
nonetheless requires the prescribed form to state that “the details and
supporting documents are in our custody and kept in our confidential file
and may be audited if the circumstances so demand.”
COA’s approval of petitioner’s disbursements only relates to the
administrative aspect of the matter of his accountability but it does not
foreclose the Ombudsman’s authority to investigate and determine whether
there is a crime to be prosecuted for which petitioner is answerable.

Civil Service Commission

The central personnel agency

The Civil Service Commission (CSC) is the central personnel agency of the
government and is tasked in the recruitment, building, maintenance and retention of a
highly-competent and professional workforce. It is also one of the three independent
commissions established by the Constitution with adjudicative powers to render final
disputes and personnel actions on Civil Service. It covers all national government
agencies, local government units and government-owned and-controlled corporations.
Executive Order No. 292 (July 25, 1987), Administrative Code of 1987, effected the
CSC’s constitutional mandate (reiterated under Article IX-B of the Philippine
Constitution of 1987), recognizing for the first time the right of government
employees to self-organization and collective negotiations under the framework of the
1987 Constitution. Mandate The Civil Service Commission (CSC) promotes morale,
efficiency, integrity, responsiveness, progressiveness, and courtesy in the Civil
Service. It adopts measures to strengthen the merit and reward system, integrates all
human resources development programs for all level and ranks, and institutionalizes a
management climate conducive to public accountability.

Ca se: Legaspi vs CSC

Facts:
Citizen Valentin Legaspi requested from the Civil Service Commission
information on the civil service eligibilities of sanitarian employees in the
Health Department of Cebu City. The Commission rejected the request,
asserting that Legaspi was not entitled to the information. Legaspi
instituted an action for mandamus from the Court to require that the
information be provided.

Decision:
The Constitution requires government agencies to provide information upon
request; if they do not want to disclose information, they carry the burden of
proving that the information is not of public concern or, if it is of public
concern, that the information has been specifically exempted by law.
Moreover, a citizen does not need to show any legal or special interest in
order to establish his or her right to information.

Case: Marcos vs CSC

Marcos has been in the government service for 20 years more or less starting as a
lowly laborer at the National Irrigation Administration (NIA) and made a steady
ascent until he was appointed as Civil Engineer II in an engineering district (SED) of
the Department of Public works and Highways (DPWH). In fact he even received a
loyalty cash award of P1,500 for supposedly rendering 10 years of unbroken service in
the DPWH and was recommended for promotion as Engineer III in SED DPWH.
In turned out however that to gain the award and impending promotion Marcos
submitted three separate Personal Data Sheets (PDS) or Civil Service Form 212 on
December 20, 1988 (first), March 2, 1992 and 1994 (third) containing different and
conflicting pieces of information as to his employment for the period 1984-1986. He
stated in his second PDS that he worked at the Philippine-Japan Highway Loan
Division (PJHLD) of the DPWH Region 8 from May 1, 1984 until October 1986 and
indicated in his third PDS that he was “on leave” from his job as civil engineer at
DPWH Region 8 from January 1, 1984 up to October 9, 1986, when, in fact, he was
working at PHILPOS Bagacay Mines during the same period according to his first
PDS.
When charged with falsification of official documents, dishonesty, conduct prejudicial
to the best interest of the service and grave misconduct, the Civil Service Commission
(CSC) found him guilty of dishonesty and imposed upon him the penalty of dismissal
 from the service. Upon appeal to the Court of Appeals (CA) the latter also found him
guilty of dishonesty but held that the penalty of dismissal should be reduced to one
year suspension from work without pay considering that: (1) Marcos had been in the
government service for almost 20 years; (2) this was his first offense; (3) he rose from
the ranks as a mere laborer until he was promoted to Engineer II at the SED-DPWH;
and (4) he returned the loyalty cash award of P1,500. Was the CA correct?
Yes. While Section 53 A (1) of the Civil Service Rules classifies dishonesty as a grave
offense with a corresponding penalty of dismissal even if committed for the first time,
Section 53 of the same Rules provide that in the determination of the penalties to be
imposed . . . mitigating circumstances attendant to the commission of the offense shall
be considered such as length of service to the government, frequency or habitualness
in committing the offense and other analogous circumstances. Marcos’ 20 years of
government service and unblemished record in the past and the fact that he returned
the cash award are circumstances that mitigate the imposable penalty from dismissal
to one year suspension from service without pay, pursuant to said Section 53 of the
Civil Service Rules. But he is hereby warned that a repetition of the same or similar
act in the future will be dealt with more severely (Miel vs. Malindog, G.R. 143538,
February 13, 2009).

Commission on Audit  

The Commission on Audit (COA) is the constitutional commission mandated to be

the supreme audit institution of the government. It has jurisdiction over national
government agencies, local government units, government-owned and controlled
corporations and non-government organizations receiving benefits and subsidies from
the government.
The Ombudsman Act of 1989 (Republic Act No. 6770) empowers the OMB “to
investigate any serious misconduct in office allegedly committed by officials
removable by impeachment, for the purpose of filing a verified complaint for
impeachment, if warranted” in the House of Representatives. In addition, Sec. 15 of
RA 6770 mandates the OMB “to investigate and initiate the proper action for the
recovery of ill-gotten and/or unexplained wealth, and the prosecution of the parties
involved therein,” and “to give priority to complaints filed against high ranking
government officials”. The OMB’s accountability duty includes the investigation of
impeachable officials for the purpose of (1) recommending, if warranted, the initiation
of impeachment; (2) filing civil cases for the recovery of ill-gotten wealth; and/or (3)
filing criminal indictments for violation of anti-graft and other penal statutes after the
impeachable officials shall have served their terms.

 Under a democracy such as in the Philippines, the people’s fundamental faith in the
integrity of political institutions is what holds the system together even under the most
difficult times. The present situation in the Philippines is a test of this principle.
Whether or not the test is passed with success is a matter yet to be seen. However, at
this stage, what could be gainfully learned from present experience is the knowledge
that people’s trust seems to lie on the existence of ethics and accountability
mechanisms and infrastructure. As shown and proven with quite a measure of success
by many studies, ethics and accountability are keys not only to effective government
but also to effective governance.

Case: Nava v Pallatao

Facts:
COA conducted an audit of the DECS Region 11 Offices and found that the
money allotted to for the improvement of 155 HS have been spent for
purchase of Science Laboratory Tool and Devices (SLDT) by 7 school
superintendents.
Respondent question the validity of the COA’s audit.
Court ruled that COA has the authority and duty to examine, audit and
settle all accounts pertaining to the revenue and receipts of, and
expenditures or uses of fund and property owned by or pertaining to the
government.
It has the exclusive authority to define the scope of its audit and
examination and to establish the required techniques and methods. The
contention of the respondents are untenable since they fail to show that the
audit made by COA was irregular.
Decision:
COA has the exclusive authority to define the scope of its audit and
examination and to establish the required techniques and methods; COA’s
findings are accorded not only respect but also finality, when they are not
tainted with grave abuse of discretion
COA always has the authority to define the scope of their audit. This is
based on the two cases (Nava vs Palattao & Dela Llana vs. COA). The
second sentence is wrong since what the constitutional provision provides is
that only a post-audit is needed.
Doctrine: Audit Power

Case: CSC v Pobre

Facts:
Respondent Hermogenes P. Pobre is a former government official who
retired from the government service three 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
Petitioner CSC promulgated CSC Resolution No. 01-1739 stating 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
Respondent Pobre sought reconsideration of the above resolution, which
petitioner denied.
The Court of Appeals set aside the resolutions of petitioner CSC and
declared that it was the COA, not petitioner CSC, which had jurisdiction to
adjudicate respondent Pobre’s claim for terminal leave benefits
CSC petitions, but SC upholds CA’s decision, and rules to wait for the
decision of COA regarding Pobre’s benefits.

Issue:
Does the Civil Service Commission have exclusive jurisdiction over a
matter which involves the terminal leave benefits of a retired government
official?

Decision:
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, the CSC and the Commission on Elections 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 interprets
the meaning of the law and ascertains which view shall prevail.
Doctrine: Audit Jurisdiction

Case: Boy Scouts v COA

Facts:
Assailed is a resolution from COA stating that Boy Scouts of the Philippines
is a public corporation based on its charter under a Commonwealth Act as
amended by a Presidential Decree. The COA resolution stated that they can
conduct an annual financial audit of the BSP in accordance with generally
accepted auditing standards.

Issue:
The jurisdiction of the Commission on Audit (COA) over the Boy Scouts of
the Philippines (BSP)

Decision:
The BSP Charter shows that it was created as a public corporation under
Commonwealth Act No. 111. The Commonwealth Act was amended by
Presidential Decree No. 460 which provided substantial changes in the BSP
structure. Also, Republic Act 7278 further amended Commonwealth Act No.
111 “by strengthening the volunteer and democratic character” of the BSP
and reducing government representation in its governing body. Although
there are substantial changes to the charter of the BSP it still continues to
be a public corporation or a government instrumentality, therefore, the
court comes to the conclusion that it is subject to the exercise by the COA of
its audit jurisdiction in the manner consistent with the provisions of the BSP
Charter.
Doctrine: Power to settle government accounts
Case: Dingdong v Guingona
Facts:
Atty. Praxedio P. Dingcong, former Acting Regional Director of Regional
Office No. VI of the Bureau of Treasury in Iloilo City, on three occasions,
contracted the services of one Rameses Layson, a private carpenter and
electrician. Subsequently, Layson was hired by the Bureau of Treasury
Office as a private carpenter and electrician.
On January 17, 1984, the Resident Auditor disallowed the amount of
P6,574 from the labor contracts with Layson, by reducing the daily rate
from P40/day to P18/day. Petitioner then appealed to the Chairman of the
Commission on Audit, who affirmed the disallowance as being excessive
and disadvantageous to the government.

Issue:
WON the disallowance is invalid for being a usurpation of management
function and an impairment of contract.

Decision:
Commission on Audit (COA) is vested with the power and authority, and is
also charged with the duty, to examine, audit and settle all accounts
pertaining to the expenditures or uses of funds owned by, or pertaining to
the Government, or any of its subdivisions, agencies, or instrumentalities.
The COA found that the labor contract, which they disallowed, was
excessive and was thus disadvantageous to the Government. The rate
applied by the petitioner was P40/day while the prevailing rate at the time
was only P25/day. However, the court notes that since the total cost of the
work does not exceed P3,000, the same may be performed under the
“pakyao” contract, and is therefore, not necessarily disadvantageous. The
Bureau of Treasury Office hired Layson since he was the one who submitted
the lowest price in the auction for the contract. Thus, it being found that the
contract is not disadvantageous, the decision of the COA is set aside and is
ordered to refund the petitioner of the disallowed item.
Doctrine: Power to disapprove funds
 PART IV.
CONCEPTUAL PARADIGM OF FINANCIAL MANAGEMENT

(1)Financial
Planning

(4) Financial (2) Budget

Accountabilit Analysis &
y Preparation

(4) Assesst (3)

Management Accounting

Public Financial Management (PFM) is a system of rules, procedures and practices

for government to manage public finances.
1. Financial Panning is the process of estimating the capital required and
determining its competition. It is the process of framing financial policies in
relation to procurement, investment and administration of funds.
  Expected Income and Expenditures for Programs, Projects, and
Activities

2. Budget Analysis and Preparation

 Estimates of Income
 Total appropriation covering current operating expenditures and
capital
3. Accounting is the action or process of keeping financial accounts.
 Recording and reporting actual income and expenditures.
 Evaluation of performance of the local government unit vis-à-vis
Planned targets

4. Asset Management is the process of managing the local governments’ assets

cost effectively. Establish organizational accountability and responsibility for
a capital asset inventory, tracking condition, use and performance.
 Release and actual disbursement of funds for the identified
functions-Work and Financial Plan and Request for Allotment

5. Financial accountability is the responsibility for the way the money is used
and managed.

PART V. BIBLIOGRAPHY
Cobar, Leslie Jamie. Checks and Balances:Audit and Accountability in Philippines
Public Finances. Manila. Internet. 2010.
Briones, Leonor. Accountability for Integrity and Results: The Case of the
Philippines Bureau of Treasury. Manila. Internet.1998.
Republic Act No. 6713: The Code of Conduct of Civil Servants. Internet. 20 February
1989.
Civil Service Commission. Ethics and Accountability: The Philippine Experience.
Whitton, Howard. Transparency International: Implementing Effective Ethics
Standards in Government and Civil Service. Internet. February 2001.
Administrative Order No. 07: Rules of Procedure of the Office of the Ombudsman.
Arellano Law Foundation. The Law Phil Project: The Philippine Law and
Jurisprudence Bank. EO 12. Internet. April 16, 2001.
Moratalla, Nelson Nogot. Graft and Corruption: The Philippine Experience. UP
Public Administration. Internet. 1987.
Manasan, Rosario. Reforming the legal framework for the budget process. Philippine
Institute of Development Studies. Internet. December 2017.