Case Digest (G.R. No. 177131) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Boy Scouts of the Philippines v. Commission on Audit (G.R. No. 177131, decided June 7, 2011), the Boy Scouts of the Philippines (BSP) petitioned the Supreme Court en banc for a writ of prohibition under Rule 65 of the 1997 Rules of Court to restrain the Commission on Audit (COA) from implementing its June 18, 2002 Decision and February 21, 2007 Resolution, as well as all issuances arising therefrom. The controversy began when COA issued Resolution No. 99-011 on August 19, 1999, categorizing the BSP as a government-controlled corporation created under Commonwealth Act No. 111 (as amended by Presidential Decree No. 460 and Republic Act No. 7278) and accordingly subjecting it to annual COA financial audit. BSP, through National President Jejomar C. Binay, moved for reconsideration on grounds that RA 7278 had removed “substantial government participation” from its governing board and thus effectively privatized the organization. COA’s General Counsel, in a June 20, 2000 memorandu... Case Digest (G.R. No. 177131) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- COA Resolution No. 99-011 (August 19, 1999)
- COA declared the Boy Scouts of the Philippines (BSP) a “public corporation” under Commonwealth Act No. 111 (as amended by PD 460 and RA 7278), a government instrumentality under the 1987 Administrative Code, and a government-controlled corporation under Art. IX-B, Sec. 2(1) of the Constitution.
- COA resolved to conduct annual financial audits of BSP’s financial statements using generally accepted auditing standards and classified BSP under Corporate Audit Office I for team audits.
- BSP’s Requests for Reconsideration and COA’s Response
- BSP’s letter (Nov. 26, 1999) argued:
- RA 7278 removed substantial government participation in BSP’s National Executive Board, making BSP no longer government-controlled.
- BSP’s funds are private (membership dues, rentals), not appropriated in the national budget, and it is not an “agency” administering special funds under the Administrative Code.
- COA General Counsel Memorandum (June 20, 2000) held RA 7278 did not supersede previous Supreme Court rulings:
- BSP remains a public corporation with public purposes and functions.
- BSP’s statutory designation and original charter strengthen, not remove, its government-controlled status and instrumentality character.
- COA Corporate Audit Officer directives led to a preliminary audit survey (Nov. 21–22, 2000) and BSP’s 30-day deferment request.
- COA Decision and BSP’s Rule 65 Petition
- COA denied BSP’s Petition for Review and Prayer for Preliminary Injunction, issuing Decision No. 2002-107 (June 18, 2002) and Resolution No. 2007-008 (Feb. 21, 2007), upholding its jurisdiction over BSP.
- BSP filed a petition for prohibition with prayer for preliminary injunction and TRO under Rule 65 (G.R. No. 177131), seeking to nullify all COA issuances requiring BSP audits.
- Parties’ Contentions
- BSP argues:
- Boy Scouts v. NLRC (1991) concerned labor jurisdiction, not COA audit jurisdiction.
- RA 7278 privatized BSP by removing government control; thus BSP is beyond COA jurisdiction (citing PAL v. COA, 1995).
- BSP’s assets and funds are private; no government appropriation or investment.
- Public character of purposes/functions alone does not confer COA audit jurisdiction.
- COA contends:
- BSP remains a public corporation created by special law for public purposes, thus a government agency/instrumentality subject to COA under Art. IX-D, Sec. 2(1).
- BSP’s functions (youth virtues, patriotism) are sovereign functions.
- BSP is attached to DECS and classified under the Administrative Code as an instrumentality enjoying operational autonomy.
- Government may still donate to BSP; its funds are public funds for public purposes.
- Court’s Requests and Supplemental Briefing
- BSP’s Reply (Aug. 29, 2007) reaffirmed BSP’s private nature and lack of government control/funds.
- Court resolution (July 20, 2010) required comments on the constitutionality of Commonwealth Act No. 111, as amended by RA 7278.
- COA and BSP submitted Comments on charter constitutionality, arguing presumption of constitutionality vs. prohibition on private corporations by special law.
Issues:
- Whether the Boy Scouts of the Philippines falls under the Commission on Audit’s audit jurisdiction.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)