G.R. No. 237938 - Ferdo vs. Commission on Audit

Bayani F. Fernando, Petitioner, served as Chairman of the Executive Committee of the Metro Manila Film Festival (MMFF) from 2002 to 2008.
The Commission on Audit, Respondent, issued Notices of Disallowance and Fraud Audit Office Notices of Finality of Decision (FAO NFD) that petitioner seeks to annul by a Petition for Certiorari under Rule 64 in relation to Rule 65.

On August 17, 2009, COA issued Office Order No. 2009-602 authorizing the Fraud Audit and Investigation Office to conduct a special audit of the Executive Committee of the MMFF for calendar years 2002–2008.
The Fraud Audit and Investigation Office found that petitioner received P1,000,000.00 on May 20, 2003, P1,000,000.00 on May 30, 2003, and P1,000,000.00 on March 15, 2005 from the Executive Committee of the MMFF.
COA concluded that the March 15, 2005 payment was sourced from non-tax revenues of the Executive Committee.

COA issued ND Nos. 2010-05-032, 2010-05-033 and 2010-05-034 disallowing the foregoing payments.
COA observed in the NDs that the P1,000,000.00 checks were encashed without issuance of Official Receipts by the MMDA collecting officer, constituting an irregular transaction under COA Circular No. 85-55A and a violation of Section 77, Government Accounting and Auditing Manual (GAAM) Volume I; original reference documents were not submitted as required by Section 168, GAAM Volume I.
On November 27, 2017, FAO NFD Nos. 2017-008 to 2017-010 were issued ordering petitioner to pay a total of P3,000,000.00.

Petitioner sought annulment of the NDs and FAO NFDs on grounds that COA lacked jurisdiction because the Executive Committee is not a public office and its funds were non-tax revenues and private donations.
Petitioner also argued that remanding to COA would prejudice him and that the issues raised are purely legal.
COA contended that petitioner failed to exhaust administrative remedies by not appealing the FAO NFDs to COA Proper.
COA maintained that the Executive Committee is a government instrumentality created under Proclamation No. 1459 and performs a public purpose; therefore its funds are public in nature.

Proclamation No. 1459 (July 9, 1975) declared a Metropolitan Film Festival and created an Executive Committee authorized to conduct fund-raising and to receive amusement tax shares do...(Subscriber-Only)

Whether the Executive Committee of the Metro Manila Film Festival is subject to the audit jurisdiction of the Commission on Audit.

Whether the Executive Committee is a government-owned or controlled corporation, government instrumentality, public office, or otherwise a non-governmental entity outside COA jurisdiction.
Whether funds administered by the Executive Committee that originate from non-tax revenues ...(Subscriber-Only)