Sanchez vs COA, GR No.
127545, April 23, 2008
Facts:
The case "Sanchez v. Commission on Audit" involves petitioners Andres Sanchez,
Leonardo D. Regala, Rafael D. Barata, Norma Agbayani, and Cesar N. Sarino.
The petitioners contested a decision by the Commission on Audit (COA) disallowing the
transfer of P600,000.00 from the Department of Interior and Local Government (DILG)
to the Office of the President (OP).
The funds were originally appropriated for the DILG's Capability Building Program
under Republic Act No. 7180 (R.A. 7180), the General Appropriations Act of 1992.
The transfer was intended to cover the operational expenses of an ad hoc task force
created to implement local autonomy under the Local Government Code of 1991.
COA disallowed the transfer due to the absence of a legal basis for the task force to claim
payment through the DILG, non-compliance with the special provisions of R.A. 7180,
and lack of proper liquidation of the cash advances.
Petitioners argued that the transfer was for a public purpose and within the executive
branch's authority.
COA maintained that the transfer violated the law and held the petitioners jointly and
severally liable for the disallowed amount.
Issue:
1. Is there a legal basis for the transfer of funds from the DILG's Capability Building
Program Fund to the Office of the President?
2. Were the conditions or requisites for the transfer of funds under the applicable law
present in this case?
3. Is the Capability Building Program Fund a trust fund, a special fund, a trust receipt, or a
regular appropriation?
4. Is the disallowance by the Commission on Audit valid?
Ruling:
The Supreme Court dismissed the petition and affirmed the COA's decision.
It ruled that there was no legal basis for the transfer of funds from the DILG to the Office
of the President.
The Court found that the conditions for a valid transfer of funds under the applicable law
were not met, as there were no actual savings from which the funds could be transferred,
and there was no item in the Office of the President's appropriation that needed
augmentation.
The Court also held that the Capability Building Program Fund is a regular appropriation
with specific purposes.
The disallowance by the COA was valid.
Ratio:
The Court emphasized that the power to transfer savings under Section 25(5), Article VI
of the 1987 Constitution pertains exclusively to 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 Constitutional Commissions.
In this case, the transfer was initiated by the Deputy Executive Secretary, not the
President, and there was no evidence that the President authorized the transfer.
The Court highlighted that there were no actual savings from the DILG's Capability
Building Program Fund at the time of the transfer, as the funds were transferred at the
beginning of the budget year 1992.
The transferred funds were not used in accordance with the specific purposes laid down
by the Special Provisions of R.A. 7180.
The funds were spent on salaries, office supplies, and other expenses unrelated to the
Capability Building Program.
The Court upheld the COA's authority to determine and disallow irregular, unnecessary,
excessive, extravagant, or unconscionable expenditures of government funds.
The COA's findings were not tainted with unfairness or arbitrariness, and the petitioners
failed to prove that the COA acted with grave abuse of discretion.
