COMMISSION ON AUDIT

I. COMPOSITION AND QUALIFICATIONS

● A Chairman and two commissioners

● Natural born citizens at the time of appointment
● At least 35 years of age
● Certified Public Accountants with not less than ten years of auditing
experience,
● or members of the Philippine bar who have been engaged in the
practice of law for at least ten years,
● Must not have been candidates for any elective position in the elections
immediately preceding their appointment
● At no time shall all members of the Commission belong to the same
profession.
● Chairman and Commissioner must be appointed by the President with
the consent of the Commission on Appointments for a term of seven
years
● Term of seven years without reappointment
● Chairman shall hold office for 7 seven years
● One Commissioner for five years
● And the other Commissioner for three years
● Appointment to any vacancy shall be only for the unexpired portion of
the term of the predecessor
● In no case shall any member be appointed or designated in a
temporary or acting capacity

II. POWERS AND FUNCTIONS

II.1 What is the general function of the Commission on Audit?

● It is the function of the Commission on Audit to examine the accuracy of the

records kept by accountable officers and to determine whether expenditures
have been made in conformity with law. It is therefore through the
Commission on Audit that the people can verify whether their money has
been properly spent.

Note: Government-owned and controlled corporations are not autonomous bodies

independent of Government. They are subject to audit by the Commission on Audit
and subject to control by the President. Government-owned and controlled
corporations are not autonomous bodies independent of government. They are
subject to audit the Commission on Audit and subject to audit by the Commission on
Audit and subject to control by the President. Strategic Alliance V. Radstock
Securities, G.R. no. 178158, December 4, 2009.
II.2 Classifications of the Commission on Audit:

1. To examine and audit all forms of government revenues;

2. To examine and audit all forms of government expenditures;
3. To settle government accounts;
4. To promulgate accounting and auditing rules including those for the
prevention and disallowance of irregular, unnecessary, excessive,
extravagant, or unconscionable expenditures of public funds.
5. To decide administrative cases involving expenditures of public funds.

● May COA, in the exercise of its auditing function, disallow the payment of
backwages to employees illegally dismissed and say that the responsibility
belongs to the official who dismissed them in bad faith?

○ No, COA cannot say that the responsibility belongs to the official who
made the illegal dismissal when such official has not been heard.
Besides, payment of backwages is not an irregular, unnecessary,
excessive or extravagant expense. Uy, et al. V. COA, G.R. No.
130685, March 21, 2000.

● Are Local Water Districts incorporated under P.D. 198 government-owned

corporations with original charter and therefore under the jurisdiction of the
COA?

○ Yes, they are Davao City Water District, et al v. Civil Service

Commission and Commission on Audit, G.R. 95237-8, September 13,
1991.

● Does the power of the Commission extend to non-accountable officers?

○ The Commission has authority not just over accountable officers but
also over other officers who perform functions related to accounting
such as verification of evaluations and computation of fees collectible,
and the adoption of internal rules of control. An Evaluator/ Computer,
for instance, is an indispensable part of the process of assessment and
collection and comes within the scope of the Commission’s jurisdiction.
Mamaril V. Domingo, 227 SCRA 206 (1993).
○ NOTE: Even in cases where pre-audit is allowed and pre-audit has
already been performed, Development Bank of the Philippines V.
Commission on Audit, 231 SCRA 202 (1994)

● What is meant by the power of the Commission to settle accounts?

 ○ It means the power to settle liquidated accounts, that is those accounts
which may be adjusted simply by an arithmetical process. It does not
include the power to fix the amount of an unfixed or undetermined debt.
Compania General de Tabacos V. French and Unson, 39 Phil. 34, 42
(1919). Another way of looking at this power was stated by Guevara V.
Gimenez, 6 SCRA 807, 813 (1962) thus:
………Such function is limited to a determination of:
● Whether there is a law appropriating funds for a given purpose;
● Whether a contract made by the proper officer, has been
entered into in conformity with said appropriation law;
● whether the goods or services covered by said contract have
been delivered or rendered in pursuance of the provisions
thereof, as attested to by the proper officer;
● and whether payment therefor has been authorized by the
officials of the corresponding department or bureau.

If these requirements have been fulfilled, it is the ministerial duty of the Auditor
General to approve and pass in audit the voucher and treasury warrant for said
payment.

● The Commission on Audit reduced the amount that was passed in Audit on
the ground that the original amount that was passed in the audit on the
ground was “excessive and disadvantageous to the government.” Does the
Commission have the authority to do so?

○ Yes, on the basis of its authority in Article IX, D, 2 (1). This extends to
the accounts of all persons respecting funds or properties received or
held by them in an accountable capacity. Dincong V.
CommissionerGuingona, Jr., 162 SCRA 782 (1988). ( The Court,
however, reversed the factual decision that the original amount was
excessive.)
○ NOTE: The COA can decide money claims based on law.
■ But, if a money claim is denied by a law, COA has no authority
to pass judgment on the constitutionality of the law, Parreno C.
COA, G.R. No. 162224 June 7, 2007.

● The National Power Corporation hired the services of a lawyer without

complying with the requirement which prior written approval of the Solicitor
General should be observed. When the COA disallowed payment to the
lawyer, it was argued that the circular requiring approval by the Solicitor
General was unconstitutional because it restricted the practice of law. Decide.
 ○ The circular was merely a safeguard to prevent irregular, unnecessary,
excessive and extravagant or unconscionable expenditures. Polloso V.
Gangan, G.R. No. 140563, July 14, 2000.

● Where regulations require public bidding for the sale of government property,
does the Commission on Audit have the authority to interpret the meaning of
“public bidding” and what constitutes its failure?

○ Yes, and for as long as that there is no clear evidence of abuse of

discretion, the decision of COA will not be disturbed. “No less than the
Constitution has ordained that the COA shall have exclusive authority
to define the scope of its audit and examination, establish the
techniques and methods required therefore and promulgate accounting
and auditing rules and regulations, including those for the prevention
and disallowance of irregular, unnecessary, excessive, extravagant, or
unconscionable expenditures, or use of government funds and
properties.” Danville Maritime, Inc. V. Commission on Audit, G.R. No.
85285, July 28, 1989.

● If the Commission has already passed an account in audit may the fiscal still
look into it for the purpose of determining possible criminal liability?
○ Yes, because the Commission’s interest is merely administrative and
not criminal. Ramos V. Aquino, 39 SCRA 641 (1971)

● Is the authority of the Commssion the same for all kinds of funds?

○ No, Section 2(1)

○ SECTION 2 (1). The Commission on Audit shall have the power,
authority, and duty to examine, audit, and settle all accounts pertaining
to the revenue and receipts of, and expenditures or uses of funds and
property, owned or held in trust by, or pertaining to, the Government,
or any of its subdivisions, agencies, or instrumentalities, including
government-owned or controlled corporations with original charters,
and on a post-audit basis: (a) constitutional bodies, commissions and
offices that have been granted fiscal autonomy under this Constitution;
(b) autonomous state colleges and universities; (c) other government-
owned or controlled corporations and their subsidiaries; and (d) such
non-governmental entities receiving subsidy or equity, directly or
indirectly, from or through the Government, which are required by law
or the granting institution to submit to such audit as a condition of
subsidy or equity. However, where the internal control system of the
audited agencies is inadequate, the Commission may adopt such
measures, including temporary or special pre-audit, as are necessary
and appropriate to correct the deficiencies. It shall keep the general
 accounts of the Government and, for such period as may be provided
by law, preserve the vouchers and other supporting papers pertaining
thereto.

● May public corporations under the jurisdiction of the of the COA employ
private auditors?

○ Yes, The clear and unmistakable conclusion from a reading of the

entire Section 2 is that the COA’s power to examine and audit is non-
exclusive. On the other hand, the COA’s authority to define the scope
of its audit, promulgate auditing rules and regulations, and disallow
unnecessary expenditures is exclusive.
■ However, as the constitutionally mandated auditor of all
government agencies, the COA’s findings and conclusions
necessarily prevail over those of private auditors, at least insofar
as government agencies and officials are concerned. DBP V.
COA, G.R. No. 88435, January 16, 2002.

CASES

1. Chozas v. COA, G.R. No. 226319, October 08, 2019 (EB)

Facts:
The Board of Regents (BoR) of the BulSU passed Resolution No. 39, Series of
20125 authorizing the grant of an Accomplishment Incentive Award in favor of the
officials, faculty members and non-academic personnel of BulSU in recognition of
their efforts and achievements in maintaining BulSU's program of excellence in
education, sports and culture. Consequently, one hundred sixty-four (164)
Disbursement Vouchers for Special Trust Fund (STF), with an aggregate amount of
Thirty-Seven Million Eight Hundred Seventy-Six Thousand Two Hundred Ninety-Six
Pesos and Fifty-Seven Centavos (P37,876,296.57) were distributed to the BoR,
regular employees, part-time faculty and employees by job order/contract.
On post-audit, the COA Team Leader and Supervising Auditor of BulSU issued ND
Nos. 13-001-164(12) and 13-042-164(12)7 dated March 12, 2013, disallowing the
payment of the Accomplishment Incentive Award in the total amount of
P37,876,296.57. The award was disallowed for being irregular, bereft of legal basis
and in contravention of Article IX-B, Section 8 of the 1987 Constitution, Republic Act
(R.A.) No. 6758 or the Salary Standardization Law, and other related laws, rules and
regulations, reiterated under COA Circular No. 2013-0038 dated January 30, 2013.

Aggrieved by the disallowance, the petitioners-officials and petitioners-employees

filed separate appeals before the COA Regional Office No. III, San Fernando
Pampanga. The appeals were consolidated.

On February 28, 2014, the Regional Director upheld the NDs declaring that the
Accomplishment Incentive Award cannot be regarded as part of the
"programs/projects" referred to in Section 4(d) of R.A. No. 8292 or the Higher
Education Modernization Act of 1997. Moreover, the Regional Director found that the
BoR violated Sub-item 4.5 of Department of Budget and Management (DBM)
Circular No. 16 dated November 26, 1998,11 when they granted the incentive award
sans any prior Administrative Order from the Office of the President. Accordingly, the
Regional Director ordered the approving officers, as well as all the recipients of the
incentive award, to return the disallowed benefits.

Issues:
The main issue raised for the Court's resolution rests on whether or not the COA
committed grave abuse of discretion amounting to lack or excess of jurisdiction in
affirming ND Nos. 13-001-164(12) to 13-042-164(12), and consequently, in declaring
the petitioners-employees and the petitioners-officials personally liable to refund the
Accomplishment Incentive Award.

Ruling: This said, the Court shall not interfere with the general audit powers of the
COA except upon a clear showing that the latter acted without jurisdiction, or with
grave abuse of discretion amounting to lack or excess of jurisdiction. This means
that to warrant a reversal of an assailed COA ruling, the petitioner must prove that
the COA exercised its power in an arbitrary or despotic manner by reason of passion
or personal hostility, or that its act was so patent and gross as to amount to an
evasion of a positive duty, or a virtual refusal to perform the duty enjoined by law or
to act at all in contemplation of law.

Viewed in the foregoing light, the Court finds that the COA did not commit any grave
abuse of discretion in affirming the assailed NDs. Indeed, the release of the
Accomplishment Incentive Award by the officers of the BulSU had no legal basis.

2. Engr. Liwanag v. COA, G.R. No. 218241, August 06, 2019 (EB)
FACTS:

The Audit Team Leader (ATL) of Angeles City Water District (ACWD), Angeles City
issued Notices of Disallowance (NDs) Nos. 2012-003-101 (2008), 2012-004-101
(2008), 2012-005-101 (2008) and 2012-006-101(2009), all dated 26 November 2012
to Appellant General Manager of the ACWD. Subject NDs pertained to the grocery
allowance for the year 2008 and year-end financial assistance for 2008 and 2009.
The basis for the disallowed grocery allowance was premised on the fact that the
same had no legal basis and that, prior year's (2010-2011) expenses of the same
nature had been disallowed and affirmed by the COA Region III Decision No. 2012-
25 dated July 12, 2012. On the other hand, the year-end financial assistance were
disallowed because it was not in accordance with the established benefits as of
December 31, 1999 per DBM letter dated April 27, 2001 and PAWAD Memorandum
Circular No. 2, s. of 2001 dated May 4, 2001. Both NDs were previously decided and
affirmed by the COA Regional Office No. III under COA Region III Decision No.
2012-25 dated July 12, 2012.

In his Appeal Memorandum dated May 20, 2013, Appellant invoked that the ATL can
no longer audit the assailed grocery allowances and year-end financial assistance
for the years 2008 and 2009 because the same were already audited by the ATL
assigned at ACWD during his time and that, there were no disallowances issued
pertaining to the said allowances and benefits. Moreover, the NDs issued by the
succeeding ATL runs counter to the non-diminution of benefits principle considering
that the allowances were allowed in principle by DBM Secretary Emilia T. Boncodin
in her letter dated 27 April 2001, addressed to President Loreto G. Limcolioc of the
PAWAD, stating therein that the grant of allowances shall be continued if the same
were an established and existing practice.

Issues: Whether or not the disallowances were proper, the nature and character of
LWDs like ACWD at the time the SSL was passed into law, and the succeeding
developments should be taken into consideration.

Ruling: Nonetheless, in determining whether or not the disallowances were proper,

the nature and character of LWDs like ACWD at the time the SSL was passed into
law, and the succeeding developments should be taken into consideration.

The LWDs were fonned under and in accordance with Section 6 of Presidential
Decree 198 (The Provincial Water Utilities Act of 1973). ACWD was thus established
on September 1987 by virtue of Sangguniang Panlungsod Resolution No. 66 dated
September 1, 1987.15 On September 13, 1991, the Court promulgated its ruling in
Davao City Water District v. Civil Service Commission,16 holding that the LWDs
were government-owned or government-controlled corporations with original
charters. As a consequence, the LWDs came under the jurisdiction of the COA, CSC
and DBM only in 1991.

3. MAGDALENO RIEL, vs. BEN F. WRIGHT, Insular Auditor of the Philippine

Islands
G.R. No. L-25679 - August 5, 1926

FACTS: After the formal pleas, the petitioner alleges that on September 1, 1925, he
was duly appointed a "temporary clerk" in the office of the Secretary, Philippine
Senate, with an agreed compensation of P40 per month, as shown by the letter of
appointment from the Secretary of the Senate, a copy of which is attached to the
petition marked Exhibit A; that he took his oath of office and entered on the
discharge on his duties as "temporary clerk," and has performed them from the date
to the present time; that from February 1 to 14, 1926, there is due and owing him
P20 for and on account of his services as such clerk, for which amount a warrant
was issued to and in his favor by the chairman of the committee on accounts of the
Philippine Senate, which is attached to the petition marked Exhibit B; that it is the
duty of the respondent to approve such warrant; but the said respondent, in violation
of the clear legal rights of the petitioner, and of his, the said respondent's plain duty
in the premises, unjustly refused and still refuses to approve said warrant; that at the
time said warrant was presented to the respondent for approval, there was a large
amount of money in the Insular Treasury not otherwise appropriated by law and
subject to be applied to the payment of said warrant; that petitioner does not have
any plain, speedy or adequate remedy, and prays for a writ of mandamus against the
Insular Auditor commanding him to sign the warrant.

Issues: Whether or not the Insular Auditor’s has the same powers and duties as the
U. S. Comptroller

Held: No, It is not for the Insular Auditor to say how many employees the Legislature
should have or the compensation which they would receive. That is a matter within
the peculiar province of the Legislature and for which its members are responsible to
their constituents.

4. Oriondo v. COA, G.R. No. 211293, June 04, 2019 (EB)

DOCTRINE:
A corporation whether with or without an original charter, is under the audit
jurisdiction of COA so long as the Government owns or has controlling interest in it.

FACTS:
Philippine Tourism Authority (PTA) Board of Directors adopted a Resolution
approving the creation of a foundation for the development of Corregidor. The
Corregidor Foundation INC. was incorporated under Securities and Exchange
Commission.PTA executed a Memorandum of Agreement (MOA) with the said
foundation and agreed to release its operating funds based on its budget for its
approval and said foundation will also submit a quarterly report on the receipts and
disbursement of PTA funds and shall deposit all the revenues collected in a distinct
and separate account in the name of Corregidor, and the disposition of the funds at
the sole discretion of the PTA. Also as additional stipulations, the disbursement of
PTA-funds by Corregidor shall be subject of Internal Auditor of PTA and Commission
on Audit.

Thereafter the audit team noted that the petitioners, former officers of PTA
concurrently rendering service to the foundation received gifts and honoraria which is
contrary to Department of BudgetManagement Circular No. 2003-5. Thus, the COA
issued a notice of disallowance to the said petitioners. The petitioners contended
that Corregidor foundation is a private corporation created by the Corporation code,
thus cannot be audited by the COA.The Adjudication Settlement Board held that the
foundation is a government-owned controlled corporation (GOCC) and under the
audit powers of the COA, and the same is a non-stock corporation which receives
funds from the government through the PTA. The Commission on Auditsustained the
decision of the settlement Board, being a government-owned corporation as the
incorporators of the foundation are all government officials and its budget is
substantially subsidized by the Government. However, the petitioners insist that the
Corregidor Foundation is not a government-owned or controlled corporation because
the same is neither organized as a stock corporation nor created by a special law. It
is a private corporation which assets are allegedly exclusive property, not
government-owned.

ISSUE:
Whether or not Corregidor Foundation Inc is a government owned or controlled
Corporation
under the audit jurisdiction of the Commission on Audit.

HELD:
Yes, The Supreme Court held that Corregidor Foundation Inc is a government
owned orcontrolled corporation under the audit jurisdiction of the Commission on
Audit.
5. BAYANI F. FERNANDO, petitioner, V. THE COMMISSION ON AUDIT,
respondent. G.R. Nos. 237938 and 237944-45, December 04, 2018

FACTS:
Petitioner Bayani Fernando was the Chairman of the Executive Committee of Metro
Manila Film Festival (MMFF) from 2002-2008. The COA issued an Office Order No.
2009-602 authorizing the Fraud Audit and Investigation Office to conduct a special
audit on the disbursements of the Executive Committee of the MMFF for the
Calendar Years 2002-2008 The Fraud Audit and Investigation Office found that
petitioner received the amount of P1,000,000.00 on May 20, 2003, and another
P1,000,000.00 on May 30, 2003 from the Executive Commitee of the MMFF for the
Special Projects/Activities of the Metro Manila Development Authority (MMDA)
sourced from the advertising sponsorship of the MMFF for 2002 and 2003. Also, the
COA found that petitioner received the amount of P1,000,000.00 from the Executive
Committee of the MMFF as payment/release of funds for petitioner's cultural
projects, which payment was sourced from non-tax revenues of the said Executive
Committee of the MMFF. Afterwards, the COA issued three Notices of Disallowance
against petitioner covering the aforesaid amounts. In the NDs issued by COA, it
made a common observation that the amount of P1,000,000.00 paid to Petitioner by
the MMFF Executive Committee is disallowed because the check was encashed and
was not issued an Official Receipt by the Collecting officer of the MMDA, which
constitutes irregular transaction.

ISSUES:
1. Does the COA have jurisdiction over the funds of MMFF which is not a public
office? 2. Did the COA commit grave abuse of discretion amounting to lack or excess
of jurisdiction when it audited funds that are not public, having been sourced from
non-tax revenues?

RULING:
1. Yes. Section 2, Article IX-D of the 1987 Constitution provides for the COA's audit
jurisdiction, which includes "the power, authority, and duty to examine, audit, and
settle all accounts pertaining to the revenue and receipts of, and expenditures or
uses of funds and property, owned or held in trust by, or pertaining to, the
Government, or any of its subdivisions, agencies, or instrumentalities, including
government-owned or controlled corporations with original charters, and on a post-
audit basis: (a) constitutional bodies, commissions and offices that have been
granted fiscal autonomy under this Constitution; (b) autonomous state colleges and
universities; (c) other government-owned or controlled corporations and their
subsidiaries; and (d) such non-governmental entities receiving subsidy or equity,
directly or indirectly, from or through the Government, which are required by law or
the granting institution to submit to such audit as a condition of subsidy or equity.
The Executive Committee of the MMFF was created pursuant to Proclamation No.
1459. Considering the establishment and mechanism of the Executive Committee of
the MMFF, it is apparent that it is not a government-owned and controlled
corporation. However, the Court finds that the Executive Committee is subject to
COA jurisdiction, considering its administrative relationship to the MMDA, a
government agency tasked to perform administrative, coordinating and policy setting
functions for the local government units in the Metropolitan Manila area.

2. Yes. The funds of the Executive Committee are considered public funds. The
Executive Committee has two sources of funds: a. The donations from the local
government units comprising the Metropolitan Manila covering the period of holding
the MMFF from December 25 to January 3; and b. The non-tax revenues that come
in the form of donations from private entities. As a committee under MMDA, a public
office, this Court finds that both sources of funds can properly be subject of COA's
audit jurisdiction.

6. Matute v. Hernandez G.R. No. 46028. August 8, 1938

FACTS:
Petitioner entered into a contract on December 24, 1936 with the Commonwealth of
the Philippines, through its Purchasing Agent, with the consent and approval of the
Secretary of Finance, whereby petitioner would supply the Government from January
1, 1937 to June 30, of the same year, with fresh meat at the following prices:
1.Hindquarters per kilo P0.37
2.Brisket, boneless do .38.
As the City of Manila had raised the fees in the municipal slaughter house from two
to three and a half centavos per kilo, petitioner asked the Purchasing Agent that the
price per kilo of each class of meat be increased by one and a half centavos, or
P0.38 1/2 per kilo for the hindquarters and P0.39 1/2 per kilo for the brisket,
boneless. By letter dated March 2, 1937 C.E. Unson, technical adviser to the
President and Acting Purchasing Agent, granted this request with the approval of the
Undersecretary of Finance Guillermo Gomez.
During the period from March 1 to 15, 1937 petitioner supplied and delivered
hindquarters fresh meat to the Bureau of Prisons. On Maya 31, 1937 the Director of
Prisons, with the approval of the said Acting Purchasing Agent, made and signed a
treasury warrant for the amount of P330.73, value of the meat supplied the Bureau of
Prisons during the period above-mentioned. Said treasury warrant was sent to the
respondent Auditor-General to be countersigned by him, but he refused to do so and
ordered its return to the Director of Prisons to be cancelled.

ISSUE:
Whether or not:
1.The Auditor-General, under the law, has the right and power to judge the merits
and legality of any contract for supplies entered into by the Commonwealth of the
Philippines through the Purchasing Agent.
2.The amendment of the contract of December 24, 1936 raising the price of meat to
be delivered to the Government by one and a half centavos, is illegal and null and
void.

RULING:
1.YES. Under the law the Auditor-General has the right and power to judge the
merits and legality of any contract for supplies entered into by the Commonwealth of
the Philippines through the Purchasing Agent.
2.NO. The modification of the contract of December 24, 1936 increasing the price of
the meat to be delivered to the Government by one and a half centavos, is illegal and
void. The increase in the price of meat allowed by the Acting Purchasing Agent
undoubtedly constitutes a novation of the contract of December 24, 1936 entered
into between the Government and petitioner after a public bidding had been held.
In order that the novation of said contract may be valid, compliance with Executive
Order No. 16 which was amended by another Executive Order No. 98, was
necessary, that is, another public bidding must be held.

7. Guevara v. Gimenez, G.R. No. L-17115, November 30, 1962 (EB)

FACTS:
In 1954, the District Engineer of Sorsogon prepared a program of work and detailed
estimate for the reconstruction of the Sorsogon Central School building.
Specifications consisting of five pages were likewise prepared. The Cost of painting
was left out in the detailed estimate and specifications. The papers were submitted
to the Division Engineer in Lucena, Quezon, who returned them duly approved with
an authorized appropriation of P40,000.00
"provided that painting shall be included" Whereupon, the specification for painting
was accordingly made and appended to the specifications as page six. In August
1954 the District Engineer advertised an invitation to bid for the “furnishing of all
materials, labor and plant, for reconstruction” project. Fernando Guevarra's bid of
P37,500 was declared lowest and the contract was awarded to him. Eighty five days
after completion of the project, Guevarra file with the Director of PublicWorks a
written claim for the payment of P4,620.00 representing cost of painting not covered
by the contract. After the hearing, the Secretary of Public Works and
Communications denied the claim and two motion for reconsideration were also
denied. On appeal,the Auditor General also denied the claim. Guevarra appealed
tothe Supreme Court pursuant to CA 327.

ISSUE: Whether the contract for the reconstruction of the school building included
the painting.
HELD: Yes. Testimonies of the employees' should be given more weight than those
of the contractors. These government employees testified as to what transpired in
the performance of their duties. The presumption is that official duty has been
regularly performed.
Note:The main issue of the case has nothing to do with COA. However, note that,
claims and disbursements of public funds should have been coursed to COA

8. Pacete v. Acting Chairman of the COA, G.R. No. 39456, May 7, 1990

FACTS:
On April 14, 1966, Petitioner Felizardo Pacete, alleging that he was appointed by the
President as the Municipal Judge of Pigcawayan, Cotabato, filed a suit for
mandamus and prohibition to compel the Secretary of Commission on Appointments
to issue him a certificate of confirmation.-Petitioner was appointed on August 31,
1964. He assumed office on September 11,1964 and discharged his duties as such.-
His appointment was made during the recess of Congress band was submitted at its
next session in 1965, On May 20, 1965, His appointment was unanimously
confirmed.-On February 7, 1966, The Secretary of Justice sent him a letter ordering
him to vacate his position because his confirmation was by-passed.-When he
inquired about it, he learned that on May 21, 1965, one day after his confirmation,
Sen. Rofolfo Ganzon, member of Commission on Appointments, wrote to Chairman
of the Commission on Appointments to file for a motion for
reconsideration on petitioner’s confirmation in view of deroga
tory information received by Sen. Ganzon.-The Secretary of Commission on
Appointments notified Secretary of Justice regarding the practice that a motion of
reconsideration automatically cancels the confirmation of appointment in question.-
Petitioner contends that the Commission on Appointments exercises power to
approve or reject appointments thru majority votes of members in the quorum and
not thru members individually as provided by Sec. 10 of its Rules.-Respondents
contend that the Supreme Court has no jurisdiction because the case only involves
internal rules of Commission on Appointments. There are non constitutional
questions involved.

ISSUES:
WON PETITIONER’S APPOINTMENT MUST BE CONFIRMED

Decision:
Yes. The controlling principle is Altarejos v. Molo which interpreted Rule 21of the
Revised Rules of Commission on Appointments. It held that mere filing of motion for
reconsideration did not have the effect of setting aside a confirmation. Instead, it will
only reopen the appointment and submit it for approval or disapproval by the majority
of members of the Commission on Appointments. Moreover, there is the distinction
between appointments made during the recess of Congress and appointments while
Congress is in session. When Congress is in session, presidential nominees can
only assume office once confirmed by the Commission on Appointments. When
Congress is in recess, the President makes ad interim appointments which takes
effect at once. The individual chosen may qualify and perform his function. The
appointment is effective until the disapproval of the Commission on Appointments or
next adjournment of Congress.

9. Felix Gochan & Sons Realty Corp v. COA, G.R. No. 223228

FACTS:
Gochan & Sons owned two parcels of land in Cebu City. One was located in
Barangay Guadalupe, Cebu City and registered under Transfer Certificate of Title
(TCT) No. 247123 (Banawa Property). The Banawa Elementary School, however,
occupied the Banawa Prope1iy, since April 1970. Another property was located in
Lorega, San Miguel, Cebu City and registered under TCT No. 7840 (Lorega
Property). Pursuant to City Ordinance No. 1684 dated August 14, 1997 declaring the
Lorega Property as a Socialized Housing Site, beneficiaries of the Socialized
Housing Program of the local government had settled therein. On the other hand,
Cebu City owned a parcel of land found in Salinas Drive, Lahug, Cebu City and
registered under TCT No. T-30916 (Lahug Property)

On December 14, 2005, the Sangguniang Panlungsod of Cebu issued Resolution

No. 05-16765 approving the proposed land swap between Gochan & Sons and Cebu
City and authorizing the city mayor to sign and execute a Deed of Exchange with
Gochan & Sons. In the said trade, Gochan & Sons will give its Banawa and Lorega
Properties to Cebu City in place of the latter's Lahug Property. The possible
ejectment case Gochan & Sons may file against the Banawa Elementary School, to
the prejudice of the school children and the city government itself, motivated the
parties to agree to the land swap.

Consequently, a Deed of Exchange was made between the parties with Gochan &
Sons' President Louise Y. Gochan and Cebu City Mayor Tomas R. Osmeña acting
as their representatives. The COA Legal and Adjudication Office-Local Sector
recommended the approval of the exchange after Gochan & Sons' properties were
initially valued at ₱37,966,550.00 and Cebu City's Lahug Property only at
₱34,883,600.00.7

Sometime in 2008, an inspection was made on the properties subject of the

exchange in compliance with the directives from the COA. As a result of the
inspection, a committee composed of COA assistant commissioners recommended
a re-appraisal of the properties involved. After the re-appraisal, it was discovered
that the value of Gochan & Sons' properties were about 45% lower compared to the
Lahug Property.

ISSUES: WHETHER OR NOT THE PUBLIC RESPONDENT COMMITTED GRAVE

ABUSE OF DISCRETION AMOUNTING TO LACK OF OR IN EXCESS OF
JURISDICTION WHEN IT DECLARED THAT A) THE DEED OF EXCHANGE IS
NULL AND VOID AB INITIO AS IT FAILED TO OBTAIN THE APPROVAL OF THE
COMMISSION; AND B) CEBU CITY ACTED WITHIN ITS RIGHTS IN SELLING ITS
LAHUG PROPERTY THAT WAS THE SUBJECT MATTER OF THE DEED OF
EXCHANGE

Decision: Yes, There is no law which requires that the Deed of Exchange should be
previously approved by the COA, otherwise it would be null and void.1âшphi1 It is
worth pointing out that the COA, in its April 6, 2015 Resolution, mistakenly relied on
Danville because the portion cited by it was not a ruling of the Court but merely a
stipulation in a Memorandum of Agreement (MOA) executed by the parties therein. It
is noteworthy that, unlike the MOA in Danville, the Deed of Exchange did not have
any stipulations to the effect that a COA approval is vital to the validity of the
contract.