Title
Department of Foreign Affairs vs. Commission on Audit
Case
G.R. No. 194530
Decision Date
Jul 7, 2020
DFA challenged COA's filing fees on appeals from disallowances; SC upheld COA's authority, ruling fees constitutional and not violating due process or access to courts.

Case Summary (G.R. No. L-49835)

Key Dates and Procedural Posture

Petition filed pursuant to Rule 65 of the Rules of Court. COA Resolution No. 2008-005 dated February 15, 2008; COA Decision No. 2009-089 dated September 22, 2009; COA Decision No. 2010-090 dated October 21, 2010. Supreme Court decision affirming COA rulings and upholding constitutionality of the Resolution.

Applicable Law and Constitutional Basis

Primary constitutional provision: 1987 Constitution, Article IX-A, Section 6 (granting each Constitutional Commission en banc power to promulgate rules concerning pleadings and practice before it or its offices, provided such rules do not diminish, increase, or modify substantive rights). COA invoked its rule‑making power to fill a procedural gap in the 1997 COA Revised Rules of Procedure by promulgating filing fee rules for specified quasi‑judicial matters.

Facts — Audit Actions and Appeals

Between September 24 and October 27, 2008 the COA Resident Auditor in the DFA issued 19 Notices of Disallowance (NDs) totaling P33,038,107.61 (terminal leave benefits alleged to exceed legal limits or otherwise incorrectly computed) based on Audit Observation Memorandum (AOM) No. 2008-13. On November 27, 2008, the Supervising Auditor issued 20 NDs to Philippine Embassy personnel in London amounting to P7,221,324.94 (conversion of allowances using collection rate instead of prevailing market rate) covered by AOM No. 2008-21. DFA appealed these NDs pursuant to Rule V of the 1997 COA Revised Rules of Procedure; the Resident Auditor returned the appeals unacted upon for failure to pay filing fees required by COA Resolution No. 2008-005.

DFA’s Motion and COA Initial Rulings

DFA moved before COA to suspend the Resolution’s implementation, arguing (1) violation of Article IX‑A, Section 6 because the Resolution was promulgated by only two members of the Commission Proper, (2) vagueness and susceptibility to abuse, and (3) deprivation of due process because payment of filing fees was a precondition to the COA taking cognizance of appeals. COA Decision No. 2009-089 denied the motion, ruling: (a) promulgation by two members did not contravene the Constitution because two constituted the full composition of the Commission Proper at that time; (b) speculative concerns about abuse were unfounded since fees are paid to the COA cashier and credited to COA funds; and (c) the filing fee requirement did not violate due process because auditees already had meaningful opportunity to be heard through the AOM and because the right to appeal is not a constitutional right but a statutory privilege. COA Decision No. 2010-090 denied reconsideration, reiterating these conclusions and emphasizing the discretionary nature of presidential appointments to fill vacancies.

Issue Presented

Whether COA Resolution No. 2008-005 is unconstitutional for violating due process, being excessive or oppressive, or having been issued with grave abuse of discretion; and whether the COA properly required payment of filing fees as prerequisite for taking appeals.

Supreme Court Ruling — Disposition

The Supreme Court dismissed the petition. It upheld the constitutionality of COA Resolution No. 2008-005 and affirmed COA Decision Nos. 2009-089 and 2010-090.

Reasoning — Authority to Promulgate Rules En Banc

The Court interpreted Article IX-A, Section 6 as empowering the Commission en banc to promulgate rules but did not require the physical presence of the full original complement of members to constitute an en banc decision. Citing precedents and principles of collegiality, the Court reasoned that “en banc” denotes a collegial decision-making format and a majority of the Commission Proper as constituted suffices. Given the constitutional design of staggered terms and rotations, reduction of membership to two at times is an anticipated result; requiring a full complement to act would unduly paralyze the Commissions. Thus the promulgation of the Resolution by the two sitting members did not violate Article IX‑A, Section 6.

Reasoning — Filing Fees and the Due Process Clause

The Court held that mandatory filing fees, properly authorized by the Commission’s rule‑making power, do not violate procedural due process. Filing fees are procedural requirements analogous to docket or legal fees under the Rules of Court and are a permissible limitation on the statutory privilege of appeal, noting that the right to appeal is not a constitutional right but a statutory one. The Court emphasized that petitioners had been afforded meaningful opportunity to be heard during the audit process (through AOMs requesting justification or comment prior to issuance of NDs), so conditioning the perfection of an appeal on payment of fees did not amount to denial of due process.

Reasoning — Purpose, Safeguards, and Absence of Abuse

The Court dismissed speculative claims of potential abuse because fees are paid to COA’s Treasury Division and credited to COA funds rather than to individual auditors. The Resolution’s imposition of a capped fee regime (originally capped at P10,000.00, later adjusted by COA Resolution No. 2013-016) demonstrated that the fees were intended to defray quasi‑judicial costs rather than to be punitive or revenue‑raising inordinately. The Court also observed that COA’s rules allow analogy to the Rules of Court for addressing indigency, and that procedures exist to prevent denial of access to quasi‑judicial remedies for the truly indigent.

Reasoning — Computation of Filing Fees, Consolidation, and Aggregate Base

The Court found the Resolution’s fee computation to be sufficiently clear and reasonable. It interpreted the fee to be assessed per appeal, based on the aggregate amount involved in the transactions subject to that appeal. Accordingly, multiple NDs may be consolidated into a single appeal (provided reglementary periods permit), with a single filing fee computed on the aggregate disallowed amount. The Court expressly answered that NDs issued against many employees of one agency may be paid in a lump sum by the agency, subject to the fee cap, and that an appeal covering several NDs may require only one filing fee. The Court cited existing COA practice and previous decisions supporting consolidation and aggregate‑based computation.

Reasoning — Who May Pay and Standing of Government Agencies

Although

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