Feliciano Vs COA

Engineer Ranulfo Feliciano vs COA case digest
FACTS:
COA audited the accounts of LMWD. Subsequently, LMWD received a letter from
COA dated 19 July 1999 requesting payment of auditing fees. As General Manager of
LMWD, petitioner sent a reply dated 12 October 1999 informing COAs Regional
Director that the water district could not pay the auditing fees. Petitioner cited as basis
for his action Sections 6 and 20 of Presidential Decree 198 (“PD 198”) 2, as well as
Section 18 of Republic Act No. 6758 (“RA 6758”). The Regional Director referred
petitioners reply to the COA Chairman on 18 October 1999.
On 19 October 1999, petitioner wrote COA through the Regional Director asking for
refund of all auditing fees LMWD previously paid to COA.
On 16 March 2000, petitioner received COA Chairman Celso D. Gangans Resolution

dated 3 January 2000 denying his requests. Petitioner filed a motion for
reconsideration on 31 March 2000, which COA denied on 30 January 2001
Hence, petitioner filed this instant petition.
ISSUE:
1. Whether a Local Water District (“LWD”) created under PD 198, as amended, is a

government-owned or controlled corporation subject to the audit jurisdiction of COA;
2. Whether Section 20 of PD 198, as amended, prohibits COAs certified public

accountants from auditing local water districts;
3. Whether Section 18 of RA 6758 prohibits the COA from charging government-

owned and controlled corporations auditing fees.
RULING:
1. Yes. The Constitution and existing laws mandate COA to audit all government
agencies, including government-owned and controlled corporations (“GOCCs”) with
original charters. An LWD is a GOCC with an original charter. The COAs audit
jurisdiction extends not only to government “agencies or instrumentalities,” but also
to “government-owned and controlled corporations with original charters” as well as
“other government-owned or controlled corporations” without original charters.
LWDs exist by virtue of PD 198, which constitutes their special charter. Since under
the Constitution only government-owned or controlled corporations may have special
charters, LWDs can validly exist only if they are government-owned or controlled. To
claim that LWDs are private corporations with a special charter is to admit that their
existence is constitutionally infirm.
2. NO, PD 198 cannot prevail over the Constitution. No amount of clever legislation
can exclude GOCCs like LWDs from COAs audit jurisdiction. Section 3, Article IX-
D of the Constitution outlaws any scheme or devise to escape COAs audit
jurisdiction, thus:
“Sec. 3. No law shall be passed exempting any entity of the

Government or its subsidiary in any guise whatever, or any investment
of public funds, from the jurisdiction of the Commission on Audit. “
The framers of the Constitution added Section 3, Article IX-D of the Constitution
precisely to annul provisions of Presidential Decrees, like that of Section 20 of PD
198, that exempt GOCCs from COA audit.
DOCTRINE:
Sec. 16. The Congress shall not, except by general law, provide for the formation,
organization, or regulation of private corporations. Government-owned or
controlled corporations may be created or established by special charters in the
interest of the common good and subject to the test of economic viability.
2. No. Section 18 of RA 6758 prohibits COA personnel from receiving any kind of
compensation from any government entity except “compensation paid directly by
COA out of its appropriations and contributions.” Thus, RA 6758 itself recognizes
an exception to the statutory ban on COA personnel receiving compensation from
GOCCs. COA may charge GOCCs “actual audit cost” but GOCCs must pay the same
directly to COA and not to COA auditors. Petitioner has not alleged that COA charges
LWDs auditing fees in excess of COAs “actual audit cost.” Neither has petitioner
alleged that the auditing fees are paid by LWDs directly to individual COA auditors.
WHEREFORE, the Resolution of the Commission on Audit dated 3 January 2000 and the
Decision dated 30 January 2001 denying petitioner’s Motion for Reconsideration are
AFFIRMED. The second sentence of Section 20 of Presidential Decree No. 198 is
declared VOID for being inconsistent with Sections 2 (1) and 3, Article IX-D of the
Constitution. No costs.

Feliciano Vs COA

Uploaded by

Copyright:

Available Formats

Feliciano Vs COA

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Feliciano Vs COA

Uploaded by

Copyright:

Available Formats

Engineer Ranulfo Feliciano vs COA case digest

On 16 March 2000, petitioner received COA Chairman Celso D. Gangans Resolution

Hence, petitioner filed this instant petition.

1. Whether a Local Water District (“LWD”) created under PD 198, as amended, is a

2. Whether Section 20 of PD 198, as amended, prohibits COAs certified public

3. Whether Section 18 of RA 6758 prohibits the COA from charging government-

“Sec. 3. No law shall be passed exempting any entity of the

You might also like