G.R. No. 194530 - Department of Foreign Affairs vs. Commission on Audit

The case involves a petition for certiorari, prohibition, and issuance of a writ of preliminary injunction filed by the Department of Foreign Affairs (DFA) against the Commission on Audit (COA).
The challenge was directed against COA Resolution No. 2008-005 (dated February 15, 2008) and subsequent COA Decisions No. 2009-089 (dated September 22, 2009) and No. 2010-090 (dated October 21, 2010).
The Resolution imposed the collection of filing fees for appeals concerning:

Notices of suspension, disallowance or charge, and requests for relief from accountability
Money claims (except when claimed by a government agency)
Requests for condonation

The DFA contended that the imposition of such fees was unconstitutional on several grounds, including violation of due process because filing fee payment was required as a condition for the commission to hear its appeal.

Between September 24 and October 27, 2008, COA’s Resident Auditor in the DFA issued nineteen (19) Notices of Disallowance (NDs) amounting to P33,038,107.61 concerning terminal leave benefits of retired DFA employees.

The disallowances were based on excess payment for unused leave credits (beyond the allowed 360 days) and improper deduction methods violating the Foreign Service Act.
These disallowances were documented in Audit Observation Memorandum (AOM) No. 2008-13 dated July 18, 2008.

On November 27, 2008, similar NDs totaling P7,221,324.94 were issued to personnel of the Philippine Embassy in London.

The disallowance related to the use of an improper conversion rate (collection rate instead of the prevailing market rate) for allowances.
These issues were encapsulated in AOM No. 2008-21 dated July 29, 2008.

Additional NDs were also issued in other embassies (including Paris, Rome, Seoul, Osaka, Greece, Berlin, and Tokyo) on similar grounds, further emphasizing compliance issues regarding benefit computation.
In both the terminal leave and allowance cases, the DFA appealed the NDs.

The appeals were elevated in accordance with COA’s Revised Rules of Procedure.
The Resident Auditor returned the appeals due to non-payment of the filing fees as specified by the Resolution.

Suspension of the implementation of the Resolution on constitutional and procedural grounds.
Argument that the payment of filing fees violated due process, was vague, and diminished substantive rights.

The COA maintained that the Resolution was properly enacted despite being promulgated by only two sitting members, given the temporary vacancy in the Commission’s membership.
It also emphasized that the payment of filing fees was a reasonable and established administrative practice to partially defray adjudication costs.

Following the issuance of the NDs and the return of the appeals, the DFA further sought reconsideration to suspend the enforcement of the Resolution.
COA defended its imposition of filing fees, underscoring that:

The fees serve a procedural function analogous to filing fees in judicial proceedings.
The rules, including the cap on filing fees, have been properly promulgated under the constitutional grant of rule-making power.

The filing fee requirements did not infringe on the DFA’s substantive due process rights, as the opportunity to be heard was adequately provided through subsequent audit processes and appeals.

Whether COA Resolution No. 2008-005, which mandates the payment of filing fees as a precondition for appealing COA findings, is unconstitutional.
Whether such filing fee impositions are excessive, oppressive, and against the guarantee of due process.

Whether the procedure for promulgating the Resolution by only two members of the COA, instead of the full complement, violates the constitutional requirement for an en banc decision-making body.
Whether the requirement to pay filing fees before the COA takes cognizance of an appeal diminishes an appellant's right to be heard.

Issues on interpretation concerning the computation formula for filing fees, including inquiries about:

The imposition of fees on multiple notices of disallowance against a government official.
The possibility of consolidating multiple disallowances under one filing fee.
The capacity of a government agency to pay such fees on behalf of its personnel in a lump sum.