Constitutional Law, Political Law

Career Executive Service Board v. Commission on Audit G.R. No. 212348 June 19, 2018 Legislative Department, Appropriation and Re-alignment, COA


Petitioner CESB granted to its officials and employees various monetary benefits in CY 2002 and CY 2003 pursuant to Section 2, Article V of the Collective Negotiation Agreement it had entered into with the Samahan ng Kawaning Nagkakaisasa Diwa, Gawa at Nilalayon (SANDIGAN), a duly accredited organization of its employees.

Upon post-audit, respondent the Audit Team Leader (ATL) issued Audit Observation Memorandum No. 2003 AAR-12, assailing the legality of the grant of benefits. In due time, the Director of the Legal and Adjudication Office National (LAO-N) issued ND No. 2004-67 declaring that the payment of said monetary benefits has no legal support.

CESB’s Executive Director filed a request seeking the reconsideration of ND No. 2004-67 which the LAO-N denied. 

CESB’s appeal was likewise denied. Ultimately, respondent COA rendered the assailed Decision No. 2010- 121 affirming ND No. 2004-67. 

Hence, this present recourse.


Whether respondent COA committed grave abuse of discretion when it affirmed the recommendation of the Audit Team Leader and the Supervising Auditor in disallowing the monetary benefits granted by the petitioner.


The Court finds that the respondents did not gravely abuse their discretion in disallowing the payment of the monetary benefits under the CNA, and upholds the disallowance by the COA of the monetary benefits granted by the CESB for being based on cogent legal grounds.

In the discharge of its constitutional mandate, the COA has been vested with enough latitude to determine, prevent and disallow irregular, unnecessary, excessive, extravagant, or unconscionable expenditures of government funds. It has the power to ascertain whether or not public funds were utilized for the purpose for which they had been intended. Being the guardian of public funds, it has been vested by the 1987 Constitution with broad powers over all accounts pertaining to government revenue and expenditures and the uses of public funds and property, including 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.

To explain, Section 29(1), Article VI of the 1987 Constitution ordains that: “No money shall be paid out of the Treasury except in pursuance of an appropriation made by law.” The only exception is found in Section 25(5), Article VI of the 1987 Constitution, by which the President of the Philippines, the President of the Senate, the Speaker of the House of Representatives, the Chief Justice of the Philippines, and the heads of the Constitutional Commissions are authorized to transfer appropriations to augment any item in the GAA for their respective offices from the savings in other items of their respective appropriations. 

The CESB is definitely not among the officials or agencies authorized to transfer their savings in other items of its appropriation.

The CESB, although intended to be an autonomous entity, is administratively attached to the Civil Service Commission (CSC), and does not wield the power to authorize the augmentation of items of its appropriations from savings in other items of its appropriations. With the CSC being the office vested with fiscal autonomy by the 1987 Constitution, the CESB’s use of its savings to cover the CNA benefits for its employees had no legal basis.

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