Maria Carolina

Araullo vs
Benigno Aquino III
A consolidation of nine (9) cases
all assailing the constitutionality of
the Disbursement Acceleration
Program
What is the Disbursement
Acceleration Program (DAP)?
A program implemented by the Department of Budget and
Management during President Benigno Aquinos term intended to
speed up government spending.

DAP withdrew funds from slow-moving projects of the various

agencies of the executive branch, declared them savings and re-
allotted them to other priority projects
How exactly did DAP operate?

GAA funded projects of the various agencies of the executive

branch were assessed on a semestral basis in terms of planned vs
actual spending. Funds not spent after the lapse of the period
wherein they were planned spent were declared savings and
withdrawn by the DBM from the respective agencies.
Funds are pooled by the DBM and are then used to fund priority
projects of the government to include the legislative branch
What were these priority
projects?
In the context of the DAP, priority projects which may be funded by
pooled savings are:

a. new activities which have not been anticipated during preparation of

the budget;
b. additional requirements of on-going priority projects; and
c. deficiencies under the Special Purpose Funds, e.g., PDAF, Calamity Fund,
Contingent Fund
d. modifications of the original allotment class allocation as a result of on-
going priority projects and implementation of new activities
What exactly are savings?

Savings* are defined as:

Savings refer to portions or balances of any programmed appropriation in

this Act free from any obligation or encumbrance which are: (i) still
available after the completion or final discontinuance or abandonment of
the work, activity or purpose for which the appropriation is authorized; (ii)
from appropriations balances arising from unpaid compensation and
related costs pertaining to vacant positions and leaves of absence without
pay; and (iii) from appropriations balances realized from the
implementation of measures resulting in improved systems and efficiencies
and thus enabled agencies to meet and deliver the required or planned
targets, programs and services approved in this Act at a lesser cost.
* General Appropriations Acts of 2011, 2012 and 2013
DAP sounds harmless, right?

Not really.
ISSUES RAISED

Whether DAP violates the principle no money shall be paid out of

the Treasury except in pursuance of an appropriation made by law
(Sec. 29(1), Art. VI, Constitution).
Whether DAP realignments can be considered as impoundments by
the executive.
Whether DAP realignments/transfers are constitutional.
Whether the sourcing of unprogrammed funds to the DAP is
constitutional.
Was there a violation of the principles of equal protection clause,
checks and balances and public accountability enshrined in the
Constitution?
Whether the Doctrine of Operative Fact is applicable.
DAP does not violate the Sec. 29
(1), Art VI of the Constitution
DAP was not an appropriation measure; hence, no appropriation
law was required to adopt or to implement it.

The DAP was a government policy or strategy designed to stimulate

the economy through accelerated spending. In the context of the
DAPs adoption and implementation being a function pertaining to
the Executive as the main actor during the Budget Execution Stage
under its constitutional mandate to faithfully execute the laws,
including the GAAs, Congress did not need to legislate to adopt or
to implement the DAP.
DAP realignments are not
impoundments by the executive
The withdrawal of unobligated allotments under the DAP should not
be regarded as impoundment because it entailed only the transfer
of funds, not the retention or deduction of appropriations.
Executive Impoundment is the refusal of the President to spend
funds already allocated by Congress for specific purpose. It is the
failure to spend or obligate budget authority of any type
(PHILCONSA v. Enriquez, G.R. No. 113105, August 19, 1994)
DAP realignments/transfers are
unconstitutional.
Prohibition against transfer of appropriations (Doctrine of
Augmentation)
The transfer of appropriated funds, to be valid under Section 25(5), must
be made upon a concurrence of the following requisites, namely:

(1) There is a law authorizing the President, the President of the Senate, the Speaker of the
House of Representatives, the Chief Justice of the Supreme Court, and the heads of the
Constitutional Commissions to transfer funds within their respective offices;

(2) The funds to be transferred are savings generated from the appropriations for their respective
offices; and

(3) The purpose of the transfer is to augment an item in the general appropriations law for their
respective offices.
First element: Was there a law authorizing
the Executive to transfer funds
NONE. The DAP is not a law but a mere executive issuance.
Section 25(5), not being a self-executing provision of the
Constitution, must have an implementing law for it to be operative.
That law, generally, is the General Appropriations Act (GAA) of a
given fiscal year. To comply with the first requisite, the GAAs should
expressly authorize the transfer of funds.
The 2011 and 2012 GAA were textually unfaithful to the Constitution
for not carrying the phrase "for their respective offices" contained in
Section 25(5) while the 2013 GAA included the omitted phrase of
the previous years
Thus, the transfers/ augmentations made to the Legislative branch
(cross-border) are UNCONSTITUTIONAL
Second Element: Were the savings declared
faithful to the savings within the intendment of
the respective GAAs?
NO
TheDAP transfers are not savings contrary to what was being
declared by the Executive.
The GAAs do not refer to savings as funds withdrawn from a slow
moving project. Thus, since the statutory definition of savings was
not complied with under the DAP, there is no basis at all for the
transfers. Further, savings should only be declared at the end of the
fiscal year. But under the DAP, funds are already being withdrawn
from certain projects in the middle of the year and then being
declared as savings by the Executive particularly by the DBM.
Third Element: Were the transfers intended to
augment an item in the general appropriations
law for their respective offices?
Transfers within their respective offices contemplate realignment
of funds to an existing project in the GAA. Under the DAP, even
though some projects funded were within the Executive, these
projects are non-existent insofar as the GAA is concerned because
no funds were appropriated to them in the GAA.
Sourcing of unprogrammed funds
to the DAP is unconstitutional.
Indeed, as submitted by the Respondents, the unprogrammed
funds were not treated as savings BUT the GAAs precisely specified
the instances when the unprogrammed funds could be released
and the purposes for which they could be used.
There was no showing that the conditions set forth in the GAAs were
complied with for the unprogrammed funds to be validly brought to
the DAP; hence, UNCONSTITUTIONAL.
No violation of the equal protection
clause, checks and balances, and public
accountability.
Petitioners have not substantiated allegations that Senators and
Congressmen being unaware of the existence and implementation
of the DAP or that there were legislators favored in the allocation.
Petitioners are not the proper parties to raise the issue.
The DAP and its implementing issuances infringed the doctrine of
separation of powers when it violated Section 25 (5), Art VII of the
Constitution.
DAP and its implementing issuances, per se, were policies and acts
which the Executive could properly adopt.
The doctrine of operative fact
applies
The Court found the doctrine of operative fact applicable to the
adoption and implementation of the DAP. Its application to the DAP
proceeds from equity and fair play. The consequences resulting
from the DAP and its related issuances could not be ignored or
could no longer be undone.