G.R. No. 258159 - Efraim C. Genuino vs. Commission on Audit , Commission Proper, Office of the Director, Corporate Government Sector, Cluster 6

Case Summary (G.R. No. 258159)

Relevant Dates

The decisions being contested include COA Decision No. 2019-115 dated April 22, 2019, and COA Decision No. 2021-263 dated October 7, 2021. The disallowed amounts originated from two donations made in 2008 and 2009.

Applicable Law

This case is governed by the 1987 Philippine Constitution, particularly Article IX-D, which outlines the powers and audit jurisdiction of the COA, as well as Presidential Decree (PD) No. 1445, which pertains to the Government Auditing Code.

Factual Background

The case arose from COA actions regarding donations totaling Php 550,000 made by PAGCOR to the Magallanes Village Association, Inc. (MVAI). The donations were subjected to a Notice of Suspension due to lack of Fund Utilization Reports and questions regarding board approval. Following compliance failures and subsequent audits, the COA issued several Notices of Disallowance (ND) culminating in the disallowance of the donations on the grounds of improper use of public funds, which were deemed to be for private purposes.

COA's Initial Findings

The COA determined that the donations violated provisions of PD No. 1445, concluding they served no public purpose since the funds were used for improvements on privately owned property that had not been turned over to the local government, thus lacking public accountability.

Genuino's Arguments

Genuino contested the COA's decisions on the grounds that the COA lacked jurisdiction over the donations as they were sourced from PAGCOR's private funds, and he argued that the donations served a public purpose. Additionally, Genuino denied personal liability, asserting he did not specifically approve the donations.

Court's Decision

The Supreme Court dismissed Genuino's petition, siding with the COA’s authority and finding that Genuino’s arguments were previously rejected in a similar case involving him. It reaffirmed that the audit jurisdiction of the COA encompasses all PAGCOR funds regardless of their source, which overruled previous interpretations of the law that sought to limit such jurisdiction.

Audit Jurisdiction

The Court clarified that the COA’s jurisdiction to audit PAGCOR is not confined solely to the franchise tax and government share stipulations in PD No. 1869. It stated that all funds pertaining to PAGCOR fall under COA's oversight per Article IX-D of the 1987 Constitution.

Public Purpose Evaluation

The Court reiterated the established legal standards for validating the use of public funds for socio-civic projects. It ruled that the donations in question, aimed at enhancing privately owned areas, could not be justified under the notion of public purpose since their primary benefit accrued to a private entity.

Personal Liability

Genuino was found pers