Case Summary (G.R. No. 125053)
Applicable Law
The legal framework applicable to this case is primarily based on the 1987 Philippine Constitution, specifically Article IX-D, which pertains to the powers and duties of the Commission on Audit related to government financial transactions.
Statement of Facts
In October 1982, COA initially issued Circular No. 82-195 that lifted the pre-audit system for government financial transactions with certain exceptions, emphasizing the importance of adhering to legal and regulatory frameworks. Following the revelation of severe financial irregularities after the 1986 revolution, COA reinstated selective pre-audit practices in March 1986 through Circular No. 86-257. This marked an intermediate response to perceived anomalies. The passage of time and normalization of political conditions led to the issuance of Circular No. 89-299 in 1989, effectively lifting the pre-audit for national government agencies and government-owned or controlled corporations, while emphasizing the installation of internal controls.
Legal Arguments and Evidence Presented
Petitioner Gualberto J. dela Llana filed this Petition asserting that COA cannot unilaterally lift pre-audit functions via a circular, as such duties are mandated by the 1987 Constitution. He cited incidents of corruption, such as the P728-million fertilizer fund scam, as evidence of irregularities arising from the suspension of the pre-audit process. Respondents, on the other hand, argued that the petition was improper for a Certiorari, contending there was no display of grave abuse of discretion by COA in issuing the circular.
Procedural History and Standing
The Court addressed procedural concerns raised by respondents, such as the lack of a certified true copy of the circular and failure to state material dates. However, the Court chose to hear the merits of the Petition in light of the serious implications regarding public funds. The petitioner, as a taxpayer, has established standing, demonstrating how misuse of public funds directly affects him and the public interest.
Propriety of Certiorari
The Court evaluated whether Certiorari was appropriate for challenging a circular, as it is traditionally reserved for judicial or quasi-judicial actions. It distinguished between COA's quasi-legislative or rule-making functions in issuing the circular versus quasi-judicial functions. Circular No. 89-299, as a policy directive, was found not to be subject to Certiorari because it does not embody a decision in a quasi-judicial capacity.
Constitutional Authority of COA
The main substantive issue revolved around the interpretation of Section 2 of Article IX-D of the 1987 Constitution. The Court clarified that while COA has broad powers over public funds, including the authority to impose pre-audit, the Constitut
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Background and Nature of the Petition
- The petition under Rule 65 of the Rules of Court seeks certiorari to annul COA Circular No. 89-299.
- Circular No. 89-299 lifted the system of pre-audit of government financial transactions by the Commission on Audit (COA).
- Petitioner prays for a temporary restraining order pursuant to Section 7, Article IX-D of the 1987 Constitution.
Historical Context of COA Pre-Audit Circulars
- In 1982, COA Circular No. 82-195 lifted pre-audit system with exceptions, emphasizing fiscal responsibility and efficiency.
- Following the 1986 revolution, irregularities led to COA Circular No. 86-257 reinstating selective pre-audit.
- Later, with political normalization, COA Circular No. 89-299 again lifted pre-audit for NGAs and GOCCs, focusing COA efforts on post-audit and internal control.
- COA Circulars 94-006 and 95-006 expanded lifting of pre-audit to LGUs.
- Circular 89-299A allows COA to reinstitute pre-audit when internal control systems are inadequate.
- In 2009, COA briefly reinstated selective pre-audit (Circular No. 2009-002), lifted again in 2011 (Circular No. 2011-002).
Factual and Procedural Background
- Petitioner raised concern about reinstating internal pre-audit in the Department of Agriculture following a Senate recommendation.
- COA replied citing Circular No. 89-299 and Administrative Order No. 278 (1992) on strengthening internal controls.
- Petitioner alleges the lifting of pre-audit led to major irregularities (e.g., P728-million fertilizer fund