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COA Case Digests Section 1: Purpose, composition, appointment Doctrine: COA as a collegial body Case: Mison v COA Facts:

The case is about customs case no. 813 where the commissioner of customs, MIson, declaring illegal the seizure by elements of the Philippine Navy of the M/V "Hyojin Maru" a vessel of Japanese registry, and ordered the release of the vessel and its cargo to the claimants, Chan Chiu On and Cheung I. However, the vessel was never released because it sank while in the custody of the bureau of customs and it could not be salvaged. The claimants filed a claim with the Commission on Audit for the payment of the vessel. Acting thereon "(b)y authority of the Acting Chairman," Mr. Rogelio B. Espiritu, Manager, Technical Service Office of the COA, denied the claim for the reasons set forth in his registered letter to the claimant's lawyer dated November 3, 1977-captioned "Decision No. 77-142." In a letter dated May 10, 1978, claimants counsel, Mr. David replied that said Decision No. 77-142-rendered only by the Manager, Technical Service Office of the COA, and "not (by) the Acting Chairman, much less . . . the Commission on Audit" 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. In a 4th Indorsement dated June 22, 1987 addressed "to the Auditor, Bureau of Customs," Chairman Eufemio C. Domingo, acting "FOR THE COMMISSION," reconsidered Decision No. 77-142 of Acting Commissioner of Audit Tantuico, supra. He declared that the vessel sank while in illegal custody of the Bureau of Customs, which "should have pre-eminently taken adequate measures to preserve" it but did not.; hence, he declared that "this Commission will interpose no objection" to the instant claim, subject to the usual auditing and accounting requirements." Petitioner seasonably filed with this Court a petition for certiorari to nullify said COA Decisions pursuant to Section 7, Article IX of the 1987 Constitution. Issues: Whether or not the decision to reverse the Espiritu Decision was proper?

Decision: In the first place the "Espiritu decision" was void ab initio. As manager of the COA Technical Service Office, Mr. Espiritu obviously had no power whatever to render and promulgate a decision of or for the Commission. Indeed, even the Chairman, alone, had not that power. As clearly set out in the Constitution then in force, the power was lodged in the Commission on Audit, "composed of a Chairman and two Commissioners." 20 It was the Commission, as a collegial body, which then as now, had the jurisdiction to "(d)ecide any case brought before it within sixty days from the date of its submission for resolution," subject to review by the Supreme Court on certiorari. 21 Hence, the adoption or ratification of the Espiritu decision by the Acting COA Chairman was inconsequential. Ratification cannot validate an act void ab initio because done absolutely without authority. The act has to be done anew by the person or entity duly endowed with authority to do so. 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. it must be made clear that the Espiritu Decision was not merely "technically invalid," as the petitioner describes it. It was substantively void ab initio, because rendered without jurisdiction. It had an essential inherent defect that could not be cured or waived.

Doctrine: Promotional appointments Case: Funa v COA Facts: Following the retirement of Carague on February 2, 2008 and during the fourth year of Villar as COA Commissioner, Villar was designated as Acting Chairman of COA from February 4, 2008 to April 14, 2008. Subsequently, on April 18, 2008, Villar was nominated and appointed as Chairman of the COA. Shortly thereafter, on June 11, 2008, the Commission on Appointments confirmed his appointment. He was to serve as Chairman of COA, as expressly indicated in the appointment papers, until the expiration of the original term of his office as COA Commissioner or on February 2, 2011. Challenged in this recourse, Villar, in an obvious bid to lend color of title to his hold on the chairmanship, insists that his appointment as COA Chairman accorded him a fresh term of seven (7) years which is yet to lapse. He would argue, in fine, that his term of office, as such chairman, is up to February 2, 2015, or 7 years reckoned from February 2, 2008 when he was appointed to that position. Meanwhile, Evelyn R. San Buenaventura (San Buenaventura) was appointed as COA Commissioner to serve the unexpired term of Villar as Commissioner or up to February 2, 2011.

Issues: Whether or not Villars appointment as COA Chairman, while sitting in that body and after having served for four (4) years of his seven (7) year term as COA commissioner, is valid in light of the term limitations imposed under, and the circumscribing concepts tucked in, Sec. 1 (2), Art. IX(D) of the Constitution Decision: WHEREFORE the petition is PARTLY GRANTED. The appointment of then Commissioner Reynaldo A. Villar to the position of Chairman of the Commission on Audit to replace Guillermo N. Carague, whose term of office as such chairman has expired, is hereby declared UNCONSTITUTIONAL for violation of Sec. 1(2), Art. IX(D) of the Constitution. Sec. 1 (2), Art. IX(D) of the Constitution, reads: (2) The Chairman and Commissioners [on Audit] 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. (Emphasis added.) The Court restates its ruling on Sec. 1(2), Art. IX(D) of the Constitution, viz: 1. The appointment of members of any of the three constitutional commissions, after the expiration of the uneven terms of office of the first set of commissioners, shall always be for a fixed term of seven (7) years; an appointment for a lesser period is void and unconstitutional. i. The appointing authority cannot validly shorten the full term of seven (7) years in case of the expiration of the term as this will result in the distortion of the rotational system prescribed by the Constitution. 2. Appointments to vacancies resulting from certain causes (death, resignation, disability or impeachment) shall only be for the unexpired portion of the term of the predecessor, but such appointments cannot be less than the unexpired portion as this will likewise disrupt the staggering of terms laid down under Sec. 1(2), Art. IX(D). 3. Members of the Commission, e.g. COA, COMELEC or CSC, who were appointed for a full term of seven years and who served the entire period, are barred from reappointment to any position in the Commission. Corollarily, the first appointees in the Commission under the Constitution are also covered by the prohibition against reappointment. 4. A commissioner who resigns after serving in the Commission for less than seven years is eligible for an appointment to the position of Chairman for the unexpired

portion of the term of the departing chairman. Such appointment is not covered by the ban on reappointment, provided that the aggregate period of the length of service as commissioner and the unexpired period of the term of the predecessor will not exceed seven (7) years and provided further that the vacancy in the position of Chairman resulted from death, resignation, disability or removal by impeachment. The Court clarifies that reappointment found in Sec. 1(2), Art. IX(D) means a movement to one and the same office (Commissioner to Commissioner or Chairman to Chairman). On the other hand, an appointment involving a movement to a different position or office (Commissioner to Chairman) would constitute a new appointment and, hence, not, in the strict legal sense, a reappointment barred under the Constitution. 5. Any member of the Commission cannot be appointed or designated in a temporary or acting capacity.

Section 2: Power and Functions Examine and audit government revenues Examine and audit government expenditures Doctrine: post-audit authority Case: Blue Bar Coconut Phils v Tantuico Facts: Sometime in 1976, the respondent Acting Chairman of the Commission on 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 Fund, in various letters to them (Annexes G-2 H, I, J, L and N of petition) to collect the short levies and overpaid subsidies, and to apply subsidy claims to the settlement of short levies should the petitioners fail to remit the amount due. Issues: Whether or not the respondent COA Chairman may disregard the PCA rules and decisions has become moot.

Decision: In the case at bar, the petitioners have failed to show that acts were done with grave abuse of discretion amounting to lack of jurisdiction. Case dismissed. Petitioners contend that they are outside the ambit of respondents' "audit" power which is confined to government-owned or controlled corporations. Section 2 (1) of Article IX-D 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 revenues 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 corporation with original charters, and on a post-audit basis. ... (d) such nongovernmental 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." (Emphasis supplied) 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. n view of the above considerations, we apply the principle of primary jurisdiction: In cases involving specialized disputes, the trend has been to refer the same to an administrative agency of special competence. As early as 1954, the Court in Pambujan Sur United Mine Workers v. Samar Mining Co., Inc. (94 Phil. 932,941), held that under the sense-making and expeditious doctrine of primary jurisdiction ... the courts cannot or will not determine a controversy involving a question which is within the jurisdiction of an administrative tribunal prior to the decision of that question by the administrative tribunal, where the question demands the exercise of sound administrative discretion requiring the special knowledge, experience, and services of the administrative tribunal to determine technical and intricate matters of fact, and a uniformity of ruling is essential to comply with the Purposes of the regulatory statute administered." Recently, this Court specaking thru Mr. Chief Justice Claudio Teehankee said that "In this era of clogged court dockets, the need for specialized administrative boards or commissions with the special knowledge, experience and capability to hear and determine promptly disputes on technical matters or essentially factual matters, subject to judicial review in case of grave abuse of discretion, has become well nigh indispensable." The court reminds us that The legal presumption is that official duty has been duly performed. Doctrine: Limitations to post-audit authority Case: Eslao v. COA Facts:

In 1988, Pangasinan State University entered into a Memorandum of Agreement (MOA) with the Department of Environment and Natural Resources (DENR) to evaluate government reforestation programs in Pangasinan. The evaluation project was being funded by the government under an Asian Development Bank loan to the Philippines. In January 1989, the Board of Regents (BOR) of PSU approved and confirmed the rates of honoraria and per diems for the PSU personnel involved in the project. Subsequently, PSU issued authority to pay P70, 375.00 representing honoraria to PSU personnel engaged in the project. This amount was reduced pursuant to the National Compensation Circular (NCC) #53 which was promulgated by the Department of Budget (DBM) in June 21, 1988. In July 1989, the resident auditor of PSU alleged that there were excesses in the payment of honoraria based on the provisions of the Compensation Policy Guidelines (CPG) #80-4 which was promulgated also by the DBM in August 7, 1980. The resident auditor argues that CPG #80-4 should be applied in this case and not NCC #53. Due to the request of PSU DBM clarified the matter, thru a letter, saying that the basis for the project's honoraria should not be CPG No. 80-4 which pertains to locally funded projects but rather NCC No. 53 which pertains to foreign-assisted projects. However, COA decided against the reconsideration filed by PSU and it argued the following: since under the MOA a Coordinating Committee shall be created which shall be responsible for the overall administration and coordination of the evaluation to be chaired by the DENR and co-chaired by the PSU VP for Research and Development this type of project contemplated under the MOA fits the description of a locally funded project which is an inter -agency activity between DENR and PSU and therefore it also fits the description of a special project. And (2) COA argues that the DBM ruling classifying the project as foreignassisted does not rest on solid ground since loan proceeds, regardless of source, eventually become public funds for which the government is accountable. Hence any project funded under the ADB loan agreement is considered to be locally funded. Issue: WON the NCC #53 should govern the payment of honoraria and per diem to the personnel of PSU involved in the DENR and PSU project. Decision: The court granted the petition. NCC should apply not CPG 80-4 First: Special project is defined under Sec 2.1 of the CPG 80-4 as an interagency or inter-committee activity or an undertaking by a composite group of

officials/employees from various agencies which [activity or undertaking] is not among the regular and primary functions of the agencies involved. There are two components of a special project (1) there should be an interagency or inter-committee activity or undertaking by a group of officials or employees who are drawn from various agencies and (2) the activity or undertaking involved is not part of the "regular or primary" functions of the participating agencies. The first component refers to the group of personnel from 2 or more government agencies which will actually carry out the project in the field and not to the coordinating body. In this case, the project team who will actually carry out the work is composed of only PSU personnel. Thus, the project team is not a "composite group" as required by the definition of CPG No. 80-4 of "special projects. CPG 80-4 was issued 8 years before NCC#53 was promulgated. Examination of the provisions of NCC No. 53 makes it crystal clear that the circular is applicable to foreign-assisted projects only. Pertinent provision of NCC#53 states that : prescribe/authorize the classification and compensation rates of positions in foreignassisted projects (FAPs) including honoraria rates for personnel detailed to FAPs and guidelines in the implementation thereof pursuant to Memorandum No. 173 dated 16 May 1988 19. Clearly, NCC No. 53 amended the earlier CPG No. 80-4 by carving out from the subject matter originally covered by CPG No. 80-4 all "foreign-assisted [special] projects." The MOA between PSU and DENR also state that the project is part of the commitment with the ADB under the Forestry Sector Program Loan and the DERN certification which states that the project being done by PSU and other state universities are foreign funded under the ADB/OECF Forestry Sector Program Loan Second: Under the Administration Code of 1987, the Compensation and Position Classification Bureau of the DBM "shall classify positions and determine appropriate salaries for specific position classes and review appropriate salaries for specific position classes and review the compensation benefits programs of agencies and shall design job evaluation programs." COA is not authorized under its constitutional mandate to substitute its own judgement for any applicable law or administrative regulation with the wisdom or propriety of which, however, it does not agree, at least before such law or regulation is set aside b the authorized agency of government or by the courts Note: COA post audit involves doing the same kind of work under pre-audit and looking at exactly the same disbursement vouchers and supporting documents already available even prior to payment, except that it is intentionally done later, or AFTER execution and payment of transactions According to Eslao v COA the post-audit authority is limited to determining compliance to government laws and regulations like checking if there is an appropriation or budget, inquiring about the legality of transactions, and checking if proper approval and documentation was followed not to determine which law is more applicable.

Doctrine: Limitation to post-audit authority Case: J.F.F Manacop v. CA Facts: Petitioner Manacop Construction Corporation constructed a perimeter fence along MIA road in order to prevent squatters from entering the area. The construction was done without Notice to Proceed due to the need and urgency of the project. After the 1986 February Revolution, a new general manager was appointment to MIA and 95% of the fence worth Php 282,068.00 was already constructed by the petitioner. A letter from the petition demanding payment for work done was sent to the GM of MIA. However, the GM denied the request of the petitioner. This prompted petitioner to file a complaint before the trial court which granted the petition and ordered MIA to pay petitioner the amount of the partially completed project based on quantum meruit since there was an absence of written contract between the parties. Respondent MIA protested against this decision in so far as basing the payment on quantum meruit when the trial court should have referred the computation to the COA based on what was done in Eslao v COA. The CA affirmed that petitioners should be paid but it set aside the trial court decision to base the payment on quantum meruit and referred it to COA. Issue: WON Manacop construction corporation should be paid based on quantum merit Decision: The court ruled in favor of the petition. The CA decision is set aside and the RTC decision is reinstated. The court settled first the issue that petitioners should be paid for the construction made which arose from a quasi-contractual relation. Quantum meruit allows recovery of the reasonable value regardless of any agreement as to value. It entitles the party to "as much as he, reasonably deserves," as distinguished from quantum valebant or to "as much as what is reasonably worth." Unliquidated claims present a justiciable question ripe for judicial determination which is beyond the powers of the COA to adjudicate. Recovery based on quantum meruit is in the nature of such claim because its settlement requires the application of judgment and discretion and cannot be adjusted by simple arithmetical processes

The case of Eslao v COA and Royal Trust Co does not apply in the instant case. Eslao and Royal Trust Co are applicable to cases when the issue is who will determine the computation and not the exact amount. In this case, the lower court had already made a factual finding on the amount reasonably due to petitioner and scrutinized the evidence to sustain the claim. Besides, there is nothing in the cited cases which would imply that only the COA can determine the specific amount due to a contractor guided by the equitable principle of quantum meruit. The courts are not powerless to determine a factual matter in accordance with both standards COAs authority is limited to settling liquidated accounts which are those accounts whihcc may be adjusted simply by arithmetical process. It does not include the power to fix the amount of an undetermined debt. Recovery in based on quantum meruit is based on unliquidated claims. In the cases, JFF Manacop was also due to receive a specific amount based on the evaluation of the work it has already compeleted. The case of Eslao v CA does not apply here because in Eslao, the amounts of honoraria and per diems to be paid to the PSU personnel who were yet specified and there was an exisiting regulation that governs what standard should be used. Eslao is applicable to cases when the issue is who will determine the computation and not the exact amount Doctrine: Prevention of unnecessary expenses Case: Polloso v Gangan Facts: National Power Corporation (NPC) hired by way of service contract, Atty,Benemerito Satorre, a private lawyer to perform and provide legal functions and services. Satorre was to receive 21,749 as monthly salary with representation and transportation allowance of 5,300. In January 1995, the unit auditor of NPC issued a Notice of Disallowance for the payment of the services rendered by Atty Satorre because it violates COA Circular No 86-255 which requires that contract of services should have the written conformity and acquiessence of the Solicitor General or Corporate Counsel and the concurrence of the Commission on Audit (COA). Petitioner, Dante Polloso submitted a letter-explanation refuting the alleged violation contained in the Notice of Disallowance and sought reconsideration. This was denied by COA. Hence the instant petition which refutes the reasons provide by COA why it issued the Notice of Disallowance. Petitioner argues that the phrase handling of legal cases should be construed to mean as conduct of cases or handling of court cases or litigation and not to other

legal matters, such as legal documentation, negotiations, counseling or right of way matters Issue: WON COA-Circular 86-255 applies to the nature of hiring of Atty. Sattore who handled only right of way matters and did not handle court cases Decision: The court ruled against the petition. The COA circular was issued recognizing the problem of hiring private lawyers or law praticioners practitioners to render legal services for them and/or to handle their legal cases in consideration of fixed retainer fees, at times in unreasonable amounts, paid from public fund despite numerous laws that restrict the practice. The COA circular provides that: the payment out of public funds of retainer fees to private law practitioners who are so hired or employed without the prior written conformity and acquiescence of the Office of the Solicitor General or the Government Corporate Counsel, as the case may be, as well as the written concurrence of the Commission on Audit shall be disallowed in audit and the same shall be a personal liability of the officials concerned. Based on the Circular government agencies and instrumentalities are restricted in their hiring of private lawyers to render legal services or handle their cases. Contrary to the view espoused by petitioner, the prohibition covers the hiring of private lawyers to render any form of legal service. It makes no distinction as to whether or not the legal services to be performed involve an actual legal controversy or court litigation Public funds will not be disbursed top pay private lawyers unless there is prior written conformity and acquiescence from the Solicitor General or the Government Corporate Counsel. The court said the circular was a safeguard to prevent the irregular, unnecessary, excessive and extravagant or unconscionable expenditure. COA conducts audit proceedings in order to prevent the irregular, unnecessary, excessive and extravagant or unconscionable expenditure of government/public funds. The circular recognizes the problem of hiring private lawyers or law practitioners to render legal services in consideration of fixed retainer fees, at times in unreasonable amounts, paid from public fund despite numerous laws that restrict the practice

Doctrine: Prevention of unnecessary expenses Case: Uy v COA

Facts: Petitioners were among the more than sixty permanent employees of the Provincial Engineering Office, Province of Agusan del Sur, who were dismissed from the service by then Governor Ceferino S. Paredes, Jr. when the latter assumed office, allegedly to scale down the operations of the said office. On July 11, 1988, a petition for reinstatement was filed before the Merit Systems Protection Board (MSPB) alleging that Governor Paredes was motivated by political vengeance when he dismissed them and hired new employees to replace them. It appears that during the pendency of the petition for reinstatement, Governor Paredes issued Memorandum Order No. 3-A dated March 20, 1989 providing for the hiring of casual employees to replace the dismissed employees, allegedly due to exigency of service. On February 1, 1989, the governor specifically denied the allegations of petitioners that their dismissal was illegal. On January 29, 1993, the MSPB rendered a decision holding that the reduction in work force was not done in accordance with civil service rules and regulations, and ordering the reinstatement of petitioners. The pertinent portions of said decision state, viz: " The law applicable in the case at bar, which is hereby quoted as follows are Section 29 of E.O. 292 and Section 14 of the Rules on Personnel Actions and Policies, thus: 'Sec. 29. Reduction in Force. Whenever it becomes necessary for lack of work or funds or due to change in the scope or nature of an agencys program or as a result of reorganization, to reduce the staff of any department or agency, those in the same group or class of positions in one or more agencies within the particular department or agency wherein the reduction is to be effected, shall be reasonably compared in terms of relative fitness, efficiency and length of service, and those found to be least qualified for the remaining position shall be laid off. (underlining supplied). Sec. 14. The names of permanent employees laid off shall be entered in a reemployment list for the appropriate occupation. The list, arranged in the order of the employees retention credit, shall be kept by the Department or agency where the reduction took place, and a copy thereof shall be furnished the Commission. The manifest repugnance of the action taken by Governor Paredes, Jr. was further exacerbated by the issuance of the highly questionable Memorandum Order No. 3-A s. 1989 dated March 20, 1989. Said memorandum provides for the hiring of casuals under the faade of exigency of the public service. It was also a blatant violation of Section 14 of the Rules on Personnel Actions and Policies which succinctly states that the names of permanent employees laid off shall be entered in a reemployment list for the appropriate occupation. Pursuant to a Motion for Clarification filed by petitioners, the MSPB issued an Order dated April 19, 1993 which directed the Provincial Government of Agusan del Sur

to pay petitioners their back salaries and other money benefits for the period that they had been out of the service until their reinstatement. The difficulties of petitioners did not end, for on July 9, 1994, the Provincial Administrator, for and in behalf of Governor Plaza, wrote a letter to respondent COA through the Provincial Auditor, inquiring on whether or not: "1. The MSPB Civil Service Commission decision directing the incumbent Provincial Governor, Agusan del Sur to pay back salaries and other benefits of the reinstated sixty one (61) PEO employees, illegally dismissed by the former Provincial Governor Ceferino S. Paredes Jr., is final and executory;-COA: YES 2. The Commission on Audit is the only proper authority to determine disbursement of such is in order-COA: YES. The money claim should first be brought to the Commission on Audit. 3. The former Provincial Governor Ceferino S. Paredes, Jr., who perpetrated the illegal act of dismissing the 61 PEO employees, would be personally liable for payment of back salaries and other benefits." Petitioners filed a special civil action for certiorari to raise the following assignment of errors: "(A)......The Honorable Commission on Audit committed grave abuse of discretion by ruling that payment of their back salaries and other money benefits became the personal liability of former Governor Ceferino Paredes Jr. and not of the Provincial Government of Agusan del Sur, after the Merit Systems Protection Board and the Civil Service Commission declared its decisions final and executory; (B)......The Honorable Commission on Audit has no appellate authority to revise, amend and modify the final and partially executed decisions/orders of the Merit Systems Protection Board and the Civil Service Commission, being the same constitutional commission and co-equal with each other; (C)......The decisions of the Merit Systems Protection Board and the Civil Service Commission have already been partially executed by the local government unit of the Province of Agusan del Sur by reinstating petitioners to their former positions in 1993 and partially paying their back wages; and Issues: Whether respondent 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 Civil Service Commission Decision: No. The COA is bereft of power to disallow the payment of petitioners' back wages. Orders of the respondent Commission on Audit are SET ASIDE.

FIRST. The ruling of the respondent COA is based on its finding that bad faith attended the dismissal of petitioners. In arriving at this conclusion, respondent COA relied solely on the MSPB decision of January 29, 1993 holding that the dismissal was illegal because first, it was made in violation of Section 29 of EO 292 and Section 14 of the Rules on Personnel Action and Policies, and second, new casual employees were hired under the guise of exigency of the public service. A careful perusal of said Decision will disclose that the MSPB never made a categorical finding of fact that former Governor Paredes acted in bad faith and hence, is personally liable for the payment of petitioners' back wages. SECOND. The case at bar brings to the fore the parameters of the power of the respondent COA to decide administrative cases involving expenditure of public funds. Undoubtedly, the exercise of this power involves the quasi-judicial aspect of government audit. As statutorily envisioned, this pertains to the "examination, audit, and settlement of all debts and claims of any sort due from or owing to the Government or any of its subdivisions, agencies and instrumentalities". The COAs work as adjudicator of money claims for or against the government means the exercise of judicial discretion. It includes the investigation, weighing of evidence, and resolving whether items should or should not be included, or as applied to claim, whether it should be allowed or disallowed in whole or in part. Its conclusions are not mere opinions but are decisions which may be elevated to the Supreme Court on certiorari by the aggrieved party. Accordingly, the fundamental requirements of procedural due process cannot be violated in proceedings before the COA. In the case at bar, former Governor Paredes was never made a party to nor served a notice of the proceedings before the COA. THIRD. In the case at bar, the action taken by COA in disallowing the further payment by the Provincial Government of Agusan del Sur of backwages due the petitioners amended the final decision of the MSPB. The jurisdiction of the MSPB to render said decision is unquestionable. This decision cannot be categorized as void. Thus, we cannot allow the COA to set it aside in the exercise of its broad powers of audit. 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 backwages to illegally dismissed government employees can hardly be described as irregular, unnecessary, excessive, extravagant or unconscionable. This is the reason why the Acting Provincial Treasurer, despite the pendency of his query with the COA, proceeded to release government funds in partial payment of the claims of petitioners. We are not unaware of our ruling in Aguinaldo v. Sandiganbayan , that the conclusive effect of the finality of the COAs decision on the executive branch of the government relates solely to the administrative aspect of the matter. However, in the case at bar, the disallowance of the payment of backwages radically alters the MSPB decision which held the provincial government, not the provincial governor, personally liable. The COA decision affects not only the procedural, but more importantly the substantive rights of the parties.

Doctrine: Independent Administrative Ruling 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), recommending the following measures to be taken: Require the submission of 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. 83-4. On February 3, 1992, the COA Director, Feliciano B. Clemencio, filed with the Office of the Ombudsman a complaint, alleging anomalies consisting of irregular/illegal disbursements of government funds. Named respondents in the complaint were petitioner and the members of the Provincial Board of Cagayan, the Assistant Provincial Treasurer and the Accountant. In a resolution dated May 31, 1994 the Ombudsman found that, in all, petitioner had distributed the amount of P750,000 to the military, police and civilian informers to fight insurgency. 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 Revised Penal Code. Likewise there is also prima-facie evidence to charge respondent Governor Aguinaldo with violation of Section 3 , paragraph (3) of R.A. 3019 (Anti-Graft and Corrupt Practices Act). Two cases of Malversation of Public Funds under Art. 217 of the Revised Penal Code were accordingly filed against petitioner on August 16, 1994. Upon motion of petitioner, the Sandiganbayan ordered the Office of the Ombudsman to reinvestigate the cases. Prosecutor Espinosa requested information from the Special and Technical Audit Division of the COA whether there had been compliance with the recommendations in

the latters SAO Report No. 90-25 which, as already stated, required the submission of documents covering claims for intelligence activities and the complete documentation of payments made, and the provincial officials to stop using the 20% Development Fund for purposes other than for development projects. He also inquired whether on the basis of the affidavits executed by the twelve military officers, the disbursements could be considered fully liquidated. In reply, COA Special and Technical Audit Division, through Provincial Auditor Teresita Rios, stated: [E]xcept for the list of recipients and the machine copies of the duly subscribed affidavits of some of the recipients, records do not show that this office received the documents required from the Governor. However, the list of recipients and the duly subscribed affidavits including the representations made in the letter of the Provincial Treasurer and the Provincial Auditor, may be a convincing proof that the questioned disbursements were disbursed according to the intended purpose and not for private consumption. Apparently not satisfied with the explanation, Prosecutor Espinosa recommended to the Ombudsman that the malversation cases against petitioner be pressed. His recommendation was approved and so, on April 26, 1995, he asked the Sandiganbayan for the suspension pendente lite of petitioner. The Sandiganbayan said: the COA could have been more responsive to the request both of the Court and of the accused itself in stating its position on the matter more categorically. However, the fact is that it did not do so. Instant Urgent Motion to Defer Arraignment and Motion to Quash DENIED. The Sandiganbayan withheld action on the prosecutions motion to suspend petitioner pending the pretrial. When asked by the prosecutor whether Marquezs credit advice was fina l, COA Chairman Celso D. Gangan stated that it was normally not subject to the review of [COA], the matter being within [Director Marquezs] audit competence. i[2] The Sandiganbayan was unconvinced. On March 4, 1996, it terminated the pretrial and, on April 12, 1996, ordered the suspension of petitioner as Provincial Governor for ninety (90) days. Its resolution reads: It is well to note that prosecution of cases is left in the hands of the prosecutor. While the COA can and may assist in collating evidence to substantiate a charge of malversation, it does not preclude the Ombudsman from conducting its own investigation, and filing the appropriate charge if, by its own determination, the evidence warrants the same. The COA is merely the source of the facts in these cases. Any determination made by the COA outside of the narration of facts duly supported by evidence will not by itself determine whether or not adequate cause exists to prosecute a case. To demonstrate this point, the Supreme Court has ruled that a public officer may be held guilty of malversation based on a preliminary audit report (De Guzman v. People, 119 SCRA 337, 348 (1982) and that [t]he absence of a pos t-audit is not a fatal omission nor is it a preliminary requirement to the filing of an information for

malversation as long as the prima facie guilt of the suspect has already been established. (Corpuz v. People, 194 SCRA 73, 79 (1990)) Nor is COAs final determination required for a malversation case to prosper, much less will it decide one way or the other the propriety of the suspension of an accused in a malversation case filed, as sought herein. The prosecution argues that the affidavits of military officers are inadequate for the purpose of liquidating disbursements in view of COA Circular No. 92-385 which provides that any disbursement from the confidential and/or intelligence fund shall be accounted for solely on the certification of the head of the agency or by the officer-incharge of the intelligence, confidential or national security mission and MLG Circular No. 83-4, dated February 7, 1983, which provides that the 20% Development Fund should be utilized exclusively for development projects and excludes expenditures for counter-insurgency operations. Issues: Whether or not the Sandiganbayan gravely abused its discretion in denying the motion to quash and directing the preventive suspension of the petitioner given the COAs findings and post-audit clearances, including the COA Chairmans confirmation? 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. The indecisive nature of the Regional Directors certification did not escape the notice of the Sandiganbayan. It required the prosecution to secure a more definite and categorical ruling from the COA. The effort failed to produce anything more reassuring. Instead of concurring in the opinion of the Regional Director, the Chairman of the COA tossed the matter to the latter on the ground that final authority to conduct post audit of confidential and intelligence expenses had been delegated to Regional Directors like Director Rafael Marquez and the latters decision is normally not subject to review of [the central office]. In Ramos v. Aquino,ii[5] we ruled that the fact that petitioners accounts and vouchers had been passed in audit is not a ground for enjoining the provincial fiscal from conducting a preliminary investigation for the purpose of determining the criminal liability of petitioners for malversation of public funds through falsification of public documents. COAs approval of petitioners disbursements only relates to the administrative aspect of the matter of his accountability but it does not foreclose the Ombudsmans authority to investigate and determine whether there is a crime to be prosecuted for

which petitioner is answerable. Case: DBP v COA Facts: Development Bank of the Philippines (DBP) seeks to set aside COA Decision which disallowed in audit the dividends distributed under the Special Loan Program (SLP) to the members of the DBP Gratuity Plan. The DBP is a government financial institution with an original charter, Executive Order No. 81, as amended by Republic Act No. 8523 (DBP Charter). In 1983, the Bank established a Special Loan Program availed thru the facilities of the DBP Provident Fund and funded by placements from the Gratuity Plan Fund. This Special Loan Program was adopted as part of the benefit program o f the Bank to provide financial assistance to qualified members to enhance and protect the value of their gratuity benefits because Philippine retirement laws and the Gratuity Plan do not allow partial payment of retirement benefits. The program was su spended in 1986 but was revived in 1991 thru DBP Board Resolution No. 066 dated January 5, 1991. Under the Special Loan Program, a prospective retiree is allowed the option to utilize in the form of a loan a portion of his outstanding equity in the gratuity fund and to invest it in a profitable investment or undertaking. The earnings of the investment shall then be applied to pay for the interest due on the gratuity loan which was initially set at 9% per annum subject to the minimum investment rate resulting from the updated actuarial study. The excess or balance of the interest earnings shall then be distributed to the investor-members. Pursuant to the investment scheme, DBP-TSD paid to the investor-members 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. Chairman Antonio of DBP also asked COA to lift the disallowance of the P11,626,414.25 distributed as dividends under the SLP on the ground that the latter was simply a normal loan transaction. Issues: Whether or not the distribution of dividends under the SLP is valid. Decision:

NO. The beneficiaries or cestui que trust of the Fund are the DBP officials and employees who will retire. Retirement benefits can only be demanded and enjoyed when the employee shall have met the last requisite, that is, actual retirement under the Gratuity Plan. In this case, dividends were distributed to employees even before retirement. As Chairman Zalamea himself noted, neither the Gratuity Plan nor our laws on retirement allow the partial payment of retirement benefits ahead of actual retirement. It appears that DBP sought to circumvent these restrictions through the SLP, which released a portion of an employees retirement benefits to him in the form of a loan. Severance of employment is a condition sine qua non for the release of retirement benefits. Retirement benefits are not meant to recompense employees who are still in the employ of the government. That is the function of salaries and other emoluments. Retirement benefits are in the nature of a reward granted by the State to a government employee who has given the best years of his life to the service of his country. Case: DBP v COA (2006) Facts: In 1988, DBP purchased 5 Mitsubishi L-300 vans and 14 Mitsubishi Lancer cars worth a total of P5,525,000 for its 5 regional offices and 14 branches pursuant to its modernization program. During this period, DBP was undergoing a process of rehabilitation and the vehicles were utilized to bolster its efforts at fund generation which required the mobilization of its personnel in order to reach out to a wider base of clientele. In its 1992 Annual Audit Report, COA included these transactions among its adverse audit findings alleging DBPs non-compliance with Letter of Instruction No. 667 and Letter of Implementation No. 29 which require Presidential approval for purchase of transport. The auditor recommended the filing of administrative charges against the responsible officers but it was never effected for the responsible officers later ceased to be connected with the agency. In 1998, the COA Auditor issued a Notice of Disallowance on the subject transaction. This impelled DBP, through their President and CEOs letter, to move for the lifting of the disallowance of P5,525,000.00. The purchase was justified as necessary for its modernization program since it was undergoing a process of rehabilitation at the time and that their branches were in dire need of additional vehicles for improved mobility to support its thrust of providing financial assistance to small and medium enterprises in the countryside to generate employment and spur economic development. The COA Auditor recommended the lifting of the audit disallowance. But contrary thereto, the Director, Corporate Audit Office I, issued a Memorandum finding DBP wantonly disregarded the requirement of Presidential approval which is a condition sine

qua non for the purchase of vehicles under Letter of Instruction No. 667 which provides, inter alia, that: When authorized to purchase motor vehicles pursuant to Letter of Implementation No. 29 dated December 5, 1975, national government agencies, including government-owned and controlled corporations and state colleges and universities shall observe the following maximum standard specifications: xxxxxxxxx 5.0 Exceptions may be allowed only as specifically authorized by the President. Letter of Implementation No. 29 provides: Pursuant to Presidential Decree No. 830, dated November 27, 1975 and in connection with Letter of Implementation No. 28 placing the Budget Commission immediately under the President of the Philippines, the Commissioner of the Budget is hereby delegated authority to take final action on the following budgetary matters heretofore referred by this Commission to the Executive Secretary: xxxxxxxxx The following, among others, shall continue to be referred to the President for personal consideration and action: xxxxxxxxx 5. Purchase of transport and construction equipment, books, drugs and medicines, and other items. DBP assailed COA Decision No. 2001-151 which denied its motion for the lifting of the disallowance. The Commission affirmed the subject disallowance for want of prior Presidential approval contrary to Letter of Implementation No. 29 and LOI No. 667. Issue: Whether or not COA committed GADALEJ in disallowing the purchase of motor vehicles by DBP Decision: COA did not commit grave abuse of discretion in disallowing the purchase of motor vehicles by DBP. Based on Letter of Instruction No. 667 and Letter of Implementation No. 29, prior Presidential authorization is required before DBP, being a government-owned and controlled corporation, could purchase the subject vehicles. Verily, Letter of Instruction No. 667 is not a "mere technicality" as DBP contends, otherwise, administrative agencies would be free to utilize such funds freely as long as they can justify their use through the mere invocation of laudable purposes. Since the disallowance was made

pursuant to the applicable law, it cannot be assailed as an act of grave abuse of discretion. Case: Home Development Mutual Fund v COA Facts: 22 Nov. 1990: RA 6971, An Act to Encourage Productivity and Maintain Industrial Peace by Providing Incentives to Both Labor and Capital, was approved and took effect on 9 Dec. 1990. The Secretary of Labor and Employment and the Secretary of Finance promulgated the Rules Implementing RA 6971. Pursuant to Sec. 1 Coverage, the Rules shall apply to: a. All business enterprises with or without existing duly recognized or certified labor organization, including GOCC performing proprietary functions b. All employees and workers including casual, regular, rank-and-file, supervisory and managerial employees 21 Nov. 1991: HDMF granted Productivity Incentive Bonus equivalent to one month salary plus allowance to all its personnel pursuant to RA 6971 and its Implementing Rules. The HDMF granted said bonus despite the advice of Undersecretary Salvador Enriquez of Dept. Of Budget and Management (DBM) to all GOCCs and governmental financial institutions (GFIs) with original charters performing proprietary functions to defer payment of the productivity incentive bonus to their employees, pending the issuance of a definite ruling by the Office of the President. 27 Dec. 1991: DOLE and Dept. Of Finance issued Supplemental Rules Implementing RA 6971 Section 1.Paragraph (a) Section 1, Rule II of the Rules Implementing RA 6971, shall be amended to read as follows: Coverage. These Rules shall apply to: (a) All business enterprises with or without existing duly certified labor organizations including government-owned and controlled corporations performing proprietary functions which are established solely for business or profit or gain and accordingly excluding those created, maintained or acquired in pursuance of a policy of the state, enunciated in the constitution or by law, and those whose officers and employees are covered by the Civil Service. 29 Nov. 1996: the grant of productivity incentive bonus to the HDMF personnel was disallowed in audit under Notice of Disallowance. The disallowance was based on COA Decision No. 96-288, stating that RA 6971 does not apply to GOCCs or to GFIs with original charters performing proprietary functions, such as the HDMF. 28 May 1997: HDMF, through its President and CEO Zorayda Alonzo, requested for the lifting of the disallowance arguing that RA 6971 applies to HDMF employees

since coverage of the law includes GOCCs 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. 16 June 1998: COA affirmed the audit disallowance in its Decision No. 98-245 Issues: Whether or not the Supplemental Rules are valid? If so, whether or not it may be given retroactive effect? Decision: HDMF is a GOCC performing proprietary functions with original charter or created by special law, PD 1752 amending PD 1530. As such, 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 RA 6971. Since RA 6971 intended to cover only GOCCs incorporated under the general corporation law, the power of administrative officials to promulgate rules in the implementation of the statute is necessarily limited to what is intended and provided for in the legislative enactment. Hence, the Supplemental Rules clarified that GOCCs performing proprietary functions which are created, maintained or acquired in pursuance of a policy of the state, enunciated in the constitution or by law, and those whose officers and employees are covered by the Civil Service are excluded from the coverage of RA 6971. Therefore, even if petitioner HDMF granted the Productivity Incentive Bonus before the Supplemental Rules were issued clarifying that petitioner was excluded from the coverage of RA. 6971, the employees of HDMF did not acquire a vested right over said bonus because they were not entitled to it under RA 6971. Moreover, the DBM advised HDMF, on August 26, 1991, to defer payment of the productivity incentive bonus to their employees, pending the issuance of a definite ruling by the Office of the President on the matter. Despite said advice, the Board of Trustees of HDMF opted to grant the said bonus on a voluntary basis as stated in its Resolution No. 91-549, Series of 1991. It expressed its concern over the welfare of the officers and employees of the Fund rather than adhering to the stringent technicality of the law. The Board, therefore, was aware that possibly HDMF may not be covered by RA 6971. It should have exercised prudence by awaiting the definite ruling on the coverage to prevent legal problems. Anent the validity of the Supplemental Rules Implementing RA 6971, the SC held that said rules issued by the Secretary of DOLE and Secretary of Finance were in accord with the intendment and provisions of RA 6971. In view of the foregoing, COA did not commit GADALEJ in affirming the audit disallowance. The petition was dismissed and COAs Resolution and Decision were affirmed.

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 COAs 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 Issues: Was the audit conducted by COA valid? Decision: COA has the exclusive authority to define the scope of its audit and examination and to establish the required techniques and methods; COAs 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: Caltex v COA Facts: Petition questioning the authority of COA in disallowing petitioners claims for reimbursement from the OPSF and seeking reversal of COAs decision denying its claim for recovery of financing charges from the Fund and reimbursement of underrecovery arising from sales to Napocor, Atlas, Marcopper, preventing it from offsetting remittances against its reimbursement vis--vis the OPSF and disallowing its claims OPSF created under Section 8 of PD 1956 as amended by EO 137

COA sent letter to Caltex directing latter to remit to OPSF its collection (P1.2B); pending remittance, all its claims from OPSF shall be held in abeyance Caltex submitted to COA a proposal for payment of collections and recovery of claims sicne outright payment of P1.2B will impair its cash position COA accepted proposal but prohibited Caltex from further offsetting remittances and reimbursements for ensuing years Subd D Art IX of the 1987 Constitution audit power of Auditor General under all 3 Constitutions authorizes disallowance of illegal expenditure of funds; power strengthened by COAs general jurisdiction in Sec 26 of Government Auditing Code of Phil and Admin Code of 1987 Issues: Can Caltex offset its claims against its OPSF contributions? Decision: Taxpayer may not offset taxes due from the claims that he may have against the government Taxes cannot be the 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 COA decision affirmed except portion disallowing claim for reimbursement of underrecovery arising from sales to Napocor which is allowed

Doctrine: Audit power Case: Mamaril v Domingo Facts: Petitioner was Evaluator/Computer in LTO. He committed lots of errors. Money lost. COA Decision 1614 holding him liable for 44k+ Petitioner availed of the early retirement program But 44k+ was withheld by LTO because of the COA Decision Petitioner claims he cannot be liable on the audit disallowances because: He was not an accountable officer He did not come into possession of money/property

He did not act in bad faith COA cannot direct LTO to withhold the 44k+ SC ruled that COA has the power to adopt its own measures regarding state audit. Directing the LTO to withhold the 44k was within the power of the COA because the petitioner owed money to a government agency (LTO) Issue: Whether or not it is within COAs power to adopt its own measures regarding state audit Decision: The COA has the power to adopt its own measures when doing its duty of examining and managing state expenses. 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

Doctrine: Power over GOCC Case: Philippine Airlines v COA Facts: PAL is a domestic corp, engaged in the air transport business. Majority of stocks are GSIS owned Usually, PAL would use a system of bidding to get fuel 60% of fuel purchases awarded to the lowest bidder 40% to second lowest bidder Petron, Caltex, Shell were usual bidders COA told PAL to stop the bidding and only get from Petron Based on DO 19 requiring GOCC to only get from Petron PAL sought reconsideration, saying DO 19 should not include PAL because: Bidding ensured the best fuel price Petron alone might not be sufficient for PALs fuel needs COA denied. Told PAL to just negotiate with Petron. Hence, petitioner.

Issue: Whether or not DO 19 should cover PAL Decision: SC ruled that: DO 19 really included PAL (GSIS owns stocks) HOWEVER, COA committed GADALEJ in not exempting PAL The reasons that PAL gave were really persuasive. They had more weight than the policy enunciated in DO 19. It was COAs duty to exempt PAL because not exempting PAL would lead to unnecessary spending the very evil sought to be prevented by the creation of COA Department Order 19 required all GOCCs to get their fuel from Petron. In the case of PAL v. COA, COA ordered PAL to follow DO 19 The very evil sought to be avoided in the creation of the COA the irregular, excessive or unconscionable expenditures of the government. Thus, it has the power and the duty to exempt certain branches from any regulation if, obedience to it would lead to those kinds of excessive expenditures. 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 Pobres claim for terminal leave benefits CSC petitions, but SC upholds CAs decision, and rules to wait for the decision of COA regarding Pobres 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: Luciano v COA Facts: Assailed are decisions of the COA sustaining the Notice of Disallowance disallowing the payment of monetary reward as part of the Exemplary Public Service Award (EPSA) to former three-term councilors of the City of Manila authorized by a City Ordinance. The COA opined that the monetary reward under the EPSA is covered by the term compensation. Though it recognizes the local autonomy of LGUs, it emphasized the limitations thereof set forth in the Salary Standardization Law. It explained that the SSL does not authorize the grant of such monetary reward or gratuity. It also stressed the absence of a specific law passed by Congress which ordains the conferment of such monetary reward or gratuity to the former councilors. In Decision No. 2010-077, COA said they have jurisdiction to rule on the legality of the disbursement, because the COA held that it is vested by the Constitution the power to determine whether government entities comply with laws and regulations in disbursing government funds and to disallow irregular disbursements. Issue: Does COA have the authority to disallow the disbursement of local government funds and was there grave abuse of discretion in disallowing? Decision:

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 under Section 2, Article IX-D of the 1987 Constitutionas echoed by Section 11, Chapter 4, Subtitle B, Title I, Book V of the Administrative Code of 1987. LGU's though granted local fiscal autonomy, are still within the audit jurisdiction of the COA Undoubtedly, the rewards to be received is excessive and tantamount to double and additional compensation. This cannot be justified by the mere fact that the awardees have been elected for three (3) consecutive terms in the same position. Verily, the COA's assailed decisions were made in faithful compliance with its mandate and in judicious exercise of its general audit power as conferred on it by the Constitution. The COA adheres to the policy that government funds and property should be fully protected and conserved and that irregular, unnecessary, excessive or extravagant expenditures or uses of such funds and property should be prevented. Pursuant to its mandate as the guardian of public funds, the COA is vested with broad powers over all accounts pertaining to government revenue and expenditures and the uses of public funds and property. This includes the exclusive authority to define the scope of its audit and examination, establish the techniques and methods for such review, and promulgate accounting and auditing rules and regulations. The COA is endowed with enough latitude to determine, prevent and disallow irregular, unnecessary, excessive, extravagant or unconscionable expenditures of government funds. It is tasked to be vigilant and conscientious in safeguarding the proper use of the government's, and ultimately the people's, property. The exercise of its general audit power is among the constitutional mechanisms that gives life to the check and balance system inherent in our form of government. 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: POI v Auditor General Facts: Philippine Operations, Inc., (POI) entered into a barter agreement with the Bureau of Prisons whereby it agreed to deliver to the Bureau a sawmill, complete, with a diesel fuel engine, a stop saw edge and log turner, etc., and two LCMs in good turning condition, in exchange for 350,000 board feet of sawed lumber. The sawmill machine delivered to the Bureau was lacking parts for the installation. Due to the defect, the Bureau would not be able to complete the delivery of sawed lumber. The attorney for POI filed a claim with the Auditor General demanding that cash payment of P70,000 be paid to it, plus P35,000 for damages suffered. The Auditor General denied the claim of POI because the agreement entered into was one of barter and no money consideration came to mind and that the Bureau of Prisons was willing to perform its part of the obligation.

Issue: Whether or not the Auditor General has jurisdiction over unliquidated claim?

Decision: Auditor General has no jurisdiction or power to take cognizance of claims for unliquidated damages. All that is vested in the Auditor General is the settlement of accounts. Accounts, because of the absence of any reasons to the contrary, must be deemed to have the same meaning as accounts under the laws in force before the approval of the Constitution. On the merits of the claim, the claim of the petitioner for

damages cannot be sustained, for admitting that the said amounts represent the difference in the value between the lumber delivered in April, 1950, and that which was to be delivered within thirty days after the installation of the sawmill, the delay in the delivery was due to petitioner's own fault, namely, its failure to deliver the sawmill and the landing barges complete and in satisfactory condition it had guaranteed them, and in part to its desire to change the lumber for surplus materials. For the foregoing considerations, the petition for review is hereby dismissed, with costs against the petitioner. Doctrine: Power to act on specific debt claim Case: ICNA v Republic Facts: Insurance Company of North America filed an action for the recovery of P86,081.30, the insured value of shipment allegedly lost in the custody of the carrier, United States Lines, Co., or of the lighter operator, Luzon Stevedoring Corporation, or of the arrastre operator, Bureau of Customs, an agency of defendant, Republic of the Philippines (RP). The RP and the Bureau of Customs moved to dismiss the complaint by claiming State immunity from suit. However, the court, in lieu of a decision rendered in Mobil Philippines Exploration, Inc. vs. Bureau of Customs and Customs Arrastre denied the petition to dismiss Issue: WON the plaintiff should have filed its claim through the Auditor General? Decision: In the decided case of Compaia General de Tabacos, it was said that money claims not easily determinable and which calls for the application of judgment and discretion upon the measure of damages are not within the competence of the Auditor General to decide. However, those, which the claim is already fixed and is readily determinable, can be addressed directly to the Auditor General. This is the case of the present petition. Since there was an assertion of the existence of a specific and fixed indebtedness on the part of the Government, it should be lodged with the Auditor General. Doctrine: Power to disapprove payments 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 Case: NHC v COA Facts: The Philippine Government forged an agreement on financial cooperation with the Republic of Germany. The agreement involved the Republic of the Philippines as Borrower and the National Housing Authority (NHA) as Project Sponsor, and the

Kreditanstalt Fur Weidaraufbau (KWF) as the lender, for the Urban Housing DagatDagatan Project II. However, despite all the negotiations and contracts, the Urban Housing DagatDagatan Project II was not completed as scheduled. Thus an extension of the contract was made since the NHA did not appear to have much choice. Several extensions were made which triggered the difficulties experienced by NHA. Issue: WON the COA has authority to disallow a duly entered contract and substitute its own judgment or disposition in lieu of the decision of the management or governing body of government entities Decision: The COA has been enshrined by the government with powers to "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." It has been recognized in Caltex Philippines, Inc. vs. COA, that COA has authority to disallow irregular, unnecessary, excessive, extravagant or unconscionable expenditures. The nature of the terminal phase of the Dagat-Dagatan project does not require the expertise of a foreign consultant and that the finishing stage merely requires simple advisory services that can be undertaken by NHA or DPWH in-house technical staff or at the most a local consultant. Our Constitution prohibits unnecessary expenses of public funds. The postulates of our Constitution are not mere platitudes, which we should honor only in rhetorics but not in reality. The power to contract a foreign loan does not carry with it the authority to bargain away the ideals of our Constitution. Doctrine: Define scope and techniques for its own auditing procedures Case: Danville Maritime v COA Facts: Disapproval of the result of a public bidding held by the PNOC by COA 1988, the PNOC BoD passed a resolution authorizing the sale by public bidding of its tanker-vessel T/T Andres Bonifacio Floor price was set at US$14M with a 10% deposit. Bids were to be made on Sept. 1, 1988 Danville Maritime, Inc was the sole bidder (US$14,158,888.88) COA issued a memorandum stating: The contract must first be submitted to COA

The bidding suffers deficiency due to the lack of competition Negotiation was not applicable Oct 12, 1988, PNOC received an offer from Fearnly Finans, a Norwegian company, to buy the vessel at least US$1M more than Danvilles PNOC BoD ordered a rebidding pursuant to the COA directive Issue: W/N COA committed GADALEJ when it ruled that there was a failure of bidding when there was only one bid and subsequently ordered a rebidding Decision: COA Cir No 88-264: There should be at least two bidders, otherwise there is a failure of bidding Negotiated sale may only be undertaken after the failure of the second bidding Only the SC can review the decisions made by COA Doctrine: Promulgate accounting and auditing rules Case: Leycano v COA Facts: Petitioner Manuel Leycano, Jr. was the Provincial Treasurer of Oriental Mindoro and at the same time a member of the Provincial School Board (PSB) of that province. During his tenure, he was appointed by the PSB as a member of its Inspectorate Team which, according to him, had the function of "monitoring the progress of PSB projects. In the year 1995, several checks were issued to various private contractors in connection with the repair, rehabilitation, and construction projects covered by the Special Education Fund (SEF) of Oriental Mindoro to several public schools. The Special Audit Team, COA Regional Office No. IV, headed by State Auditor Joselyn Cirujano (the Auditor), subsequently audited selected transactions under the SEF of the Province of Oriental Mindoro, which included those projects covered by the checks issued. The Special Audit Team found deficiencies in the projects; hence, it issued the questioned Notices of Disallowance holding petitioner, liable for signing the Certificates of Inspection relative to the projects and thereby falsely attesting to their 100% completion

Petitioner appealed that he be excluded from those lists held liable for the deficiency of the project Issue: Whether or not petitioner is held accountable for the deficiency of the said project? Decision: In light of this function of the Inspectorate Team, its members may be held liable by the COA for any irregular expenditure of the SEF if their participation in such irregularity can be established. While petitioner, in his capacity as member of the Inspectorate Team, is not an accountable officer as contemplated in Section101 of P.D. No. 1445, which states: SEC. 101. Accountable officers; bond requirement (1) Every officer of any government agency whose duties permit or require the possession or custody of government funds or property shall be accountable therefore and for the safekeeping thereof in conformity with law. (2) Every accountable officer shall be properly bonded in accordance with law, he may, nonetheless, be held liable by the COA under the broad jurisdiction vested on it by the Constitution" 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." In addition, the authority of the COA to hold petitioner liable is also implied in its duty to 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. Furthermore, Section 340 of the Local Government Code (LGC) clearly provides: SECTION 340. Persons Accountable for Local Government Funds Any officer of the local government unit whose duty permits or requires the possession or custody of local government funds shall be accountable and responsible for the safekeeping thereof in conformity with the provisions of this Title. Other local officers who, though not accountable by the nature of their duties, may likewise be similarly held accountable and responsible for local government funds through their participation in the use or application thereof. (Emphasis and underscoring supplied) Payment should not be made to a contractor without the prior inspection of the project by the Inspectorate Team, the members thereof who sign the certificate of inspection participate in the use and application of local government funds (in this case, the Special Education Fund of the Province of Oriental Mindoro). Thus, if there is an irregularity in the performance of this duty, they may be held liable for any loss that is incurred by the government as a consequence thereof. In this case, there

was such irregularity when petitioner and other members of the Team attested to the 100% completion of the projects notwithstanding their undisputed deficiencies. Section 340 of the LGC states: Other local officers who, though not accountable by the nature of their duties, may likewise be similarly held accountable and responsible for local government funds through their participation in the use or application thereof. Expressly provides that even officers though not accountable by the nature of their duties shall be accountable upon involvement of local government funds. A member of the inspectorate team is not an accountable person, but may be held liable by the above provision. Doctrine: Discretion to the most competent people Case: NCMH v COA Facts: The National Center for Mental Health Management (NCMHM) was given an increase in their budgetary allocation for improvements thereof. Soon, after the work was almost finished, the NCMHM Nurses Association lodged with the Office of the Ombudsman a complaint assailing herein petitioners for mismanagement of funds, thereafter, the group asked COA to undertake an audit of the NCMHM to which the Special Audit Team (SAT) conducted and submitted the Special Audit Office (SAO) report that states that the use of a bulk of the budget was unnecessary, excessive and/or extravagant. A request for re-evaluation and reconsideration was made and a hearing was held along with the final report of the COA Review Panel. The SAO report and the Evaluation report was brought to COA en banc for review and was denied alleging that there was an overprice, splitting, violation of rules of public bidding, unnecessary, extravagant and/or expensive expenditures, unlawful alteration of dates. Hence this petition that alleged COA to have committed Grave Abuse of Discretion, that they were denied due process and that the findings found in the SAO report was not substantiated by evidence but by suspicion. Issue: Whether or not the expenditures were considered to be unnecessary, extravagant and/or expensive Decision: Expenditures on such other items as P5.26 million for furnishing the hospitals with curtains, P1.837 million for garden soil, P1.150 million for repairs of street light, a laser, dental equipment, together with light cure machines, for a total price of P1,240,000.00, an incinerator for P99,000.00 and vibration compacts

for P176,055.00, are reported to be unnecessary, and extravagant. The charge is said to be not consistent with the COA Circular No. 88-55A that defines the terms unnecessary and extravagant. COA Circular 88-55A 2.2 The service mission, size, systems, structure, strategy, skills, style, spirit and financial performance of government agency are the primary considerations in determining whether or not their expenditures are irregular, unnecessary, excessive or extravagant. The terms irregular, unnecessary, excessive, and extravagant, when used in reference to expenditure of funds or uses of property, are relative. The determination of which expenditures of funds or use of property belongs to this or that type is situational. Circumstances of time and place, behavioural and ecological factors, as well as political, social and economic conditions, would influence any such determination. Viewed from this perspective, transactions under audit are to be judged on the basis of not only the standards of legality but also those of regularity, necessity, reasonableness and moderation, (COA Chairman Francisco Tantuinco, Jr.) The court ruled: In passing, nothing before us suggests, even remotely, that the disbursements have been made for personal or selfish ends. Petition GRANTED In accordance with the COA Circular that defines what unnecessary, extravagant and/or expensive is. Case: Ramos vs. Aquino Facts: Appellants are assailing the jurisdiction of Benjamin Aquino, the Provincial Fiscal of Rizal, to conduct the preliminary investigation of the alleged commission of malversation through falsification of public, official and commercial documents imputed to them by the Romeo Espino, the Commanding General, Philippine Army, Fort Bonifacio, Rizal. They contest that under the Constitution, the Auditor General is vested with the duty of not only to examine or audit all expenditures of funds of the Government, but also to audit or investigate and "bring to the attention of the proper administrative officer expenditures of funds or property which in his opinion are irregular, unnecessary, excessive, or extravagant." The latter duty includes the obligation to determine whether there is criminal responsibility for any anomaly. Issues: WON the investigation of the cases by the Provincial Fiscal (Benjamin Aquino), encroached upon the powers of the Auditor General? Decision:

There is the explicit requirement then that there be no expenditure of public founds except in pursuance of an appropriation made by law. Though the power of the purse belongs to the legislative, they are not in a position to oversee and supervise the actual release of each and every appropriation. That is where the Auditor General comes in. He serves as the necessary check to make certain that no department of the government exceeds the statutory limits of the appropriation to which it is entitled. Petitioner relying on section 657 of the Revised Administrative Code: "Accounts once finally settled shall in no case be opened or reviewed except as herein provided" is without merit. Preceding paragraph states that in case any settled account "appears to be infected with fraud, collusion or error of calculation or when new and material evidence is discovered, the Auditor General may within three years after original settlement, open such account, and after a reasonable time for his reply or appearance, may certify thereon a new balance." This grant does not carry with it the power to determine who may be constituted in the event that in the preparation thereof a crime has been committed. The exclusive jurisdiction of the Auditor General refer to auditorial requirements and approval but not to the criminal liability, if any, of the persons involved in an alleged irregular or anomalous disbursement of public funds. The authority of the Fiscal to investigate whether a criminal act has been committed or not in the disbursement of public funds is not included in the administrative findings of the Auditor General. COAs interest is merely administrative. Doctrine: Deciding administrative cases involving expenditure of public funds . Case: Salva v Carague Facts: Petitioner Dr. Teresita L. Salva, President of the Palawan State University (formerly Palawan State College [PSC]), is being held personally liable by the Commission on Audit (COA) for the disallowance made on the construction of Phase II, Multi-Purpose Building of the PSC in the amount of P274,726.38. In 1992, the PSC and the Integrand Development Construction, Inc. (IDCI) entered into a Construction Agreement for the construction of the PSC Multi-Purpose Building (Phase II) for the price of P1,685,883.45 When the COA-Technical Audit Specialist (COA-TAS) reviewed the contract, it found excess amounts attributed to the costs of items of mobilization/demobilization and earthfill and compaction. In COA Decision No. 95-211 dated March 28, 1995, petitioner, together with PSC Vice-President Francisco M. Romantico and PSC Accountant Carolina S. Baloran, were held jointly and severally liable for the amount of P274,726.38 which was the excess amount. The COA further affirmed said disallowance in COA Decision No. 2000-273 dated September 26, 2000, with the modification that Romantico and Baloran were

excused from any liability, while Engineers Norberto S. Dela Cruz and Lucy Janet Pasion, and the IDCI Manager, were included as persons liable for the amount. Issues: WON petitioner should be held personally liable for the disallowed amount of P274,726.38? Decision: Petitioner is found liable under Section 103 of Presidential Decree No. 1445 or the Government Auditing Code of the Philippines. Under this provision, an official or employee shall be personally liable for unauthorized expenditures if the following requisites are present, to wit: (a) there must be an expenditure of government funds or use of government property; (b) the expenditure is in violation of law or regulation; and (c) the official is found directly responsible. According to COA, applying the provision above, since the petitioner directly caused such diversion which resulted in the use of additional equipment and expense, then she should be personally liable for the resulting additional expense. But court found that her only participation is to approve the Approved Agency Estimates (AAE) prepared by PSU Engineers Norberto S. dela Cruz and Lucy Janet R. Pasion. She cannot be held personally liable for the disallowance simply because she was the final approving authority of the transaction in question. Also, being the president of PSU does not automatically make her the party ultimately liable in case of disallowance of expenses for questionable transactions of her agency. Further, in National Center for Mental Health Management v. Commission on Audit, the term irregular, as with the terms unnecessary, excessive, and extravagant, was explained in reference to expenditure of funds or uses of proper ty. Its determination is situational taking into consideration circumstances of time and place, behavioral and ecological factors, as well as political, social and economic conditions. In this light, it cannot be said that the additional expense incurred for the construction were irregular or excessive, unnecessary or unconscionable since it was spent for the benefit of PSU. The additional expense was also within the Approved agency Estimates. Further, there is no showing that petitioner was ill-motivated, or that she had personally profited or sought to profit from the transactions. Doctrine: City Council without power to abolish COA position Case: City of Basilan v Hechanova Facts: The City of Basilan, by ordinance created the position of Assistant City Auditor in 1954. Private respondent Miguel Antonio was appointed to this position. In 1964, the

city abolished the position by through another ordinance, deleting the position from the plantilla and specifying no compensation for the office. Respondents contested the authority of the City of Basilan to abolish the position, hence Antonio continued to discharge the functions of his office Issue: Can the City of Basilan dissolve the office of Assistant City Auditor by ordinance? Decision: NO. The office of Assistant City Auditor is dissimilar from that of a city employee. It comes within the purview of the Auditor General, a constitutionally created position. It is a position primarily under the General Auditing Office. Therefore, the City of Basilan does not have sole jurisdiction over the position, much less the power to abolish it. Section 3: Exemption from Jurisdiction Doctrine: Power of COA to audit government agencies cannot be taken away Case: Luciano Veloso v COA Facts: The city council of Manila enacted City Ordinance No. 8040 authorizing the grant of an Exemplary Public Service Award (EPSA) to elective officials of the City of Manila who have been elected for 3 consecutive terms. The award includes gratuity pay amounting to 3 years worth of salary subject to availability and minimal restrictions. Petitioners Veloso et al were recipients of the EPSA and correspondingly received gratuities from the City of Manila. Respondent Commission on Audit evaluated the EPSA program and found it excessive and in contrast to provisions of the Salary Standardization Law (SSL). In a Decision by the respondent commission, the disbursement of the EPSA to petitioners was deemed illegal. The petitioners contest this decision, positing that the Commission on Audit has committed grave abuse of discretion in interfering with LGUs in the disbursement of the EPSA. They also contend that the COA has no authority to disapprove payments simply because they are unreasonable, citing Guevara vs. Gimenez. Issues: Does the COA have the authority to disallow the disbursement of local government funds?

Did the COA commit grave abuse of discretion amounting to lack of jurisdiction by disallowing the disbursement of the EPSA pursuant to Ordinance 8040? Decision: YES. Article IX-D of the Constitution gives a broad outline of the powers and functions of the COA, to wit: 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 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. NO. Section 11, Chapter 4, Subtitle B, Title I, Book V of the Administrative Code of 1987 states that the jurisdiction of the COA Under the first paragraph of the above provision, the COA's audit jurisdiction extends to the government, or any of its subdivisions, agencies, or instrumentalities, including government-owned or controlled corporations with original charters. Case: Versoza v Carague Facts: MR of 2011 Decision affirming COAs 1998 and 2003 ruling that petitioner is personally and solidarily liable for Php881,819.00 (overprice of computers purchased by CDA) Petitioners counsel (petitioners son) confirmed demise of petitioner in 2010 Candelario Versoza former Exec. Dir. Of Cooperative Development Agency Guillermo Carague Chairman of COA DAP-TEC modified initial result of technical evaluation of computers to favour bidder TETRA. Petitioner signed documents for purchase. Issues: WON COA violated its own rules and jurisprudence in the determination of overpricing

WON petitioner may be ordered to reimburse the disallowed amount in the purchase of subject computers Decision: There was no violation of COA rules. 1997 COA Memorandum which had guidelines on evidence to support audit findings of overpricing provided that audit findings on overpricing are to be given to audited agency Cannot give Memo retroactive effect; Audit was conducted in 1993 Brand is irrelevant on basis of finding of technical personnel COA under Constitution is empowered to examine and audit use of funds by an agency of the national government on a post-audit basis 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. What is important is that the specifications and functions of compared computers are similar COAs observation that CDA should have been entitled to volume discount was valid COA Circular: price is excessive if discounts allowed in bulk purchases is not reflected in the price offered No grave abuse by COA in holding petitioner personally and solidarily liable for overpricing of computers procured by CDA It was petitioner who ordered reconstitution of PBAC which nullified previous bidding It was petitioner who secured services of DAP-TEC for technical evaluation. DAP-Tech came out with two evaluation reports where Tetra got lowest ranking at first then eventually won General policy of Court to sustain administrative authority decisions especially one which is constitutionally-created not only because of separation of powers doctrine but also for their expertise MR denied with finality