[175] DE JESUS v. COA
G.R. No. 156641; February 5, 2004; Ynares-Santiago, J.
TOPIC: IV. Administrative Procedure; C. In Adjudication of Cases; 3. Jurisdiction.
SUMMARY: For the period January-December 1996, the members of the Interim Board of
Directors of Metro Carigara Water District granted to themselves Representation and
Transportation Allowance (RATA), rice allowance, clothing allowance, Christmas bonus,
productivity pay and honorarium in the total amount of P157,734.40. These disbursements were
made pursuant to Reso. No. 313, series of 1995, of the Local Water Utilities Administration
(LWUA). In the post-audit of MCWD’s accounts, Auditor Visitacion T. Cabrera disallowed the
grant of said allowance and bonuses to petitioners, applying COA Opinion No. 97-015 which
declared that LWUA Reso. No. 313, series of 1995, is contrary to Sec. 13, PD 198 (otherwise
known as the Provincial Water Utilities Act of 1973) which unequivocally prohibits local water
district board members from receiving compensation in excess of the allowed per diems.
DOCTRINE
 The Constitution specially vests in the COA the authority to determine whether
government entities comply with laws and regulations in disbursing government funds,
and to disallow illegal or irregular disbursements of the same.
o This independent constitutional body is tasked to be vigilant and
conscientious in safeguarding the proper use of the government’s, and
ultimately, the people’s property.
o It has the authority to investigate whether directors, officials, or employees
of government-owned and controlled corporations, like MCWD, are entitled
to receive additional allowances and bonuses under applicable laws.
 If the rule were otherwise, administrative agencies, by the mere act of issuing a
resolution, can put to naught the broad and extensive powers granted to the COA by
the Constitution.
o This will prevent the COA from discharging its constitutional duty as an
effective, efficient, and independent watchdog of the financial operations of
the government.
o For this reason, COA cannot be deprived of its jurisdiction to pass upon the
validity of LWUA Reso. No. 313, series of 1995.
RELEVANT PROVISION(S)
FACTS
 COA Audit Team audited the accounts of Catbalogan Water District (CWD). It
discovered that members of CWD's Interim Board of Directors granted themselves the
following benefits: Representation and Transportation Allowance (“RATA”), Rice
Allowance, Productivity Incentive Bonus, Anniversary Bonus, Year-End Bonus and
cash gifts.
o These allowances and bonuses were authorized under a Resolution issued
by the Local Water Utilities Administration (LWUA).
 COA Audit Team issued notices of disallowance on the ground that the resolution runs
counter to Sec. 13, PD 198, to wit:
o Compensation. — Each director shall receive a per diem, to be determined
by the board, for each meeting of the board actually attended by him, but no
director shall receive per diems in any given month in excess of the
equivalent of the total per diems of four meetings in any given month. No
director shall receive other compensation for services to the district.
 Petitioners appealed to the COA Regional Office and subsequently to COA.
o Both appeals were denied. Hence, this instant petition.
ISSUE(S)/HELD
[1] WON the COA has jurisdiction to declare LWUA Reso. No. 313, series of 1995, contrary
to the provisions of Section 13 of Presidential Decree No. 198. – YES
 PETITIONER: COA has no jurisdiction to construe any provision of PD 198 on the
compensation and other benefits granted to LWUA-designated members of the board
of water districts.
o By exercising motu proprio plenary jurisdiction to construe and apply Sec.
13, PD 198, the COA encroached on the powers of the LWUA. Ruling in
Eslao v. COA applies.
 COURT: [Doctrine] On the issue of jurisdiction, it was held that the Constitution
specially vests in the COA the authority to determine whether government entities
comply with laws and regulations in disbursing government funds, and to disallow
illegal or irregular disbursements of the same.
o This independent constitutional body is tasked to be vigilant and
conscientious in safeguarding the proper use of the government’s, and
ultimately, the people’s property.
o It has the authority to investigate whether directors, officials, or employees
of government-owned and controlled corporations, like MCWD, are entitled
to receive additional allowances and bonuses under applicable laws.
 If the rule were otherwise, administrative agencies, by the mere act of issuing a
resolution, can put to naught the broad and extensive powers granted to the COA by
the Constitution.
o This will prevent the COA from discharging its constitutional duty as an
effective, efficient, and independent watchdog of the financial operations of
the government.
o For this reason, COA cannot be deprived of its jurisdiction to pass upon the
validity of LWUA Reso. No. 313, series of 1995.
 The case of De Jesus likewise put to rest the issue of entitlement of water district
Board members to allowances other than per diems. Sec. 13, PD 198, as amended,
reads:
o Compensation. – Each director shall receive a per diem, to be determined
by the board, for each meeting of the board actually attended by him, but no
director shall receive per diems in any given month in excess of the
equivalent of the total per diems of four meetings in any given month. No
director shall receive other compensation for services to the district.
o Any per diem in excess of P50 shall be subject to approval of the
Administration.
 On the question of refund, it was also held in De Jesus that the assailed allowances
and bonuses need not be refunded. This is so because at the time such
disbursements were made, the decision in Baybay Water District v. Commission on
Audit, which enunciated the rule prohibiting the grant of allowances and bonuses other
than per diems to Board members of water districts in accordance with LWUA Reso.
No. 313, series of 1995, had not yet been promulgated.
o Good faith was thus considered by the Court in holding that the recipients of
the allowances and bonuses disallowed by the COA need not refund the
same.
 In the instant case, it is not disputed that the allowances and bonuses granted to
Board members of MCWD were disbursed pursuant to LWUA Reso. No. 313, series of
1995.
 Likewise, beyond cavil is the fact that the COA’s disallowance of said compensation
and bonuses was based on Sec. 13, PD 198.
 o Evidently, the case at bar squarely falls within the state of facts on which the DISPOSITIVE: WHEREFORE, in view of all the foregoing, the August 31, 2000 Decision
rule enunciated in De Jesus was premised. Hence, the ruling therein must and the December 17, 2000 Resolution of the Commission on Audit, which disallowed the
be adhered to and applied to the present case. Stare decisis et non quieta payment of Representation and Transportation Allowance (RATA), rice allowance,
movere. Stand by the decisions and disturb not what is settled. clothing allowance, Christmas bonus, productivity pay and honorarium, are AFFIRMED
o It is a salutary and necessary judicial practice that when a court has laid with the MODIFICATION that petitioners need not refund the said Representation and
down a principle of law applicable to a certain state of facts, it must adhere Transportation Allowance (RATA), rice allowance, clothing allowance, Christmas bonus,
to such principle and apply it to all future cases in which the facts sued upon productivity pay and honorarium received per Resolution No. 313, series of 1995, of the
are substantially the same. Local Water Utilities Administration, between January 1996 to December 1996. SO
 Re: Eslao v. COA ORDERED.
o Eslao ruling does not apply. In Eslao, DENR and the Pangasinan State
University entered into an agreement to evaluate government reforestation
programs. The Asian Development Bank granted a loan to fund the
implementation of the agreement.
o The personnel involved in the project were paid under the DBM-issued
National Compensation Circular No. 53, which dealt with foreign-assisted
projects.
 The COA disallowed the payment on the ground that the
compensation should fall under the DBM-issued Compensation
Policy Guidelines No. 80-4.
 The Court held that National Compensation Circular No. 53 amended Compensation
Policy Guidelines No. 80-4 by excepting from the latter’s scope foreign-assisted
projects.
o The Court declared that the COA cannot “substitute its own judgment for
any applicable x x x administrative regulation with the wisdom or propriety of
which, however, it does not agree, at least not before such x x x regulation
is set aside by the x x x courts x x x.”
 Court also held that in Eslao that the DBM issued both compensation regulations
under its legislative authority to “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.
o In the instant case, the COA was simply exercising its constitutional duty to
examine and audit disbursements of public funds that are patently beyond
what the law allows.
[2] WON THE ALLOWANCES AND BONUSES WERE ALLOWED. – NO
 The issues posed in the instant petition had been settled in De Jesus v. Commission
on Audit, where the Court armed the COA’s disallowance of a similar grant of bonuses
and allowances under LWUA Reso. No. 313, series of 1995.
 Sec. 13, PD 198 is clear enough that it needs no interpretation.
o It expressly prohibits the grant of compensation other than the payment of
per diems, thus preempting the exercise of any discretion by water districts
in paying other allowances and bonuses.
[3] WON PETITIONERS SHOULD REFUND THE ALLOWANCES AND BONUSES RECEIVED
IN GOOD FAITH. – NO
 Petitioners here received the additional allowances and bonuses in good faith under
the honest belief that LWUA Reso. No. 313 authorized such payment.
 At the time petitioners received the additional allowances and bonuses, the Court had
not yet decided Baybay Water District (a more recent case which upheld refund
despite good faith). Petitioners had no knowledge that such payment was without legal
basis.
o Thus, being in good faith, petitioners need not refund the allowances and
bonuses they received but disallowed by the COA.