Petitioners are department managers of the Local Water Utilities Administration (LWUA), a government-owned and controlled corporation, who, together with 28 other LWUA officials, sought reimbursement of their extraordinary and miscellaneous expenses (EME).
The COA, through the Supervising Auditor (SA) assigned to the LWUA, issued Audit Observation Memorandum (AOM) No. AOM-2006-27, revealing the reimbursements to the 31 LWUA officials. It appeared that ₱13,110,998.26 was reimbursed only through an attached certification attesting to their claimed incurrence (“certification”). According to the AOM, this violated CoA Circular No. 2006-0110, which pertinently states that the “claim for reimbursement of such expenses shall be supported by receipts and/or other documents evidencing disbursements.”
Petitioners manifested that they were unaware of the existence of CoA Circular No. 2006-01.
The SA issued a Notice of Disallowance, disallowing the EME reimbursement claims of the 31 LWUA officials, in the total amount of ₱13,110,998.26.
Petitioners appealed the notice of disallowance, alleging that CoA Circular No. 2006-01 is violative of the equal protection clause since officials of GOCCs, such as the LWUA officials, are, among others, prohibited by virtue of the same issuance from supporting their reimbursement claims with “certifications,” unlike officials of the national government agencies (NGAs) who have been so permitted.
Petitioners argued that the employees of NGAs and GOCCs are similarly situated and that there exists no substantial distinction between them.
Petitioners also submitted that CoA Circular No. 2006-01 lacked publication as required by law, hence, it is unenforceable.
Petitioners’ appeal was denied.
Petitioners elevated the ruling to the Commission Proper. The CoA affirmed Notice of Disallowance.
The CoA maintained that there is a substantial distinction between the officials of NGAs and the officials of the GOCCs, GFIs and their subsidiaries insofar as their entitlement to EME is concerned.
Dissatisfied, petitioners filed the present certiorari petition, imputing grave abuse of discretion on the part of the CoA.
Whether or not grave abuse of discretion attended the CoA’s ruling in this case.
The petition lacks merit.
The CoA’s audit power is among the constitutional mechanisms that gives life to the check-and-balance system inherent in our system of government.
As an essential complement, the CoA has been vested with the exclusive authority 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. This is found in Section 2, Article IX-D of the 1987 Philippine Constitution which provides that:
Sec. 2. x x x.
(2) 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.
As an independent constitutional body conferred with such power, it reasonably follows that the CoA’s interpretation of its own auditing rules and regulations, as enunciated in its decisions, should be accorded great weight and respect. In the recent case of Delos Santos v. CoA, the Court explained:
[T]he 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.
x x x [I]t is the general policy of the Court to sustain the decisions of administrative authorities, especially one which is constitutionally-created, such as the CoA, not only on the basis of the doctrine of separation of powers but also for their presumed expertise in the laws they are entrusted to enforce. Findings of administrative agencies are accorded not only respect but also finality when the decision and order are not tainted with unfairness or arbitrariness that would amount to grave abuse of discretion. It is only when the CoA has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, that this Court entertains a petition questioning its rulings. x x x.
Viewed in the foregoing light, the Court finds that the CoA did not commit any grave abuse of discretion as its affirmance of Notice of Disallowance No. 09-001-GF(06) is based on cogent legal grounds.