Power Of COA
Rodolfo S. De Jesus, Et Al. vs. Commission on Audit
G.R. No. 149154, June 10, 2003
Facts:
The Board of Directors (BOD) of the Catbalogan Water District granted to themselves RATA, rice allowance, productivity incentive, anniversary, and year-end bonus and cash gifts, as authorized by Resolution No. 313 of the Local Water Utilities Administration (LWUA). The COA disallowed and ordered the refund of these allowances as they are not allowed by P.D. No. 198, the Provincial Water Utilities Act of 1973.
Issue:
Whether COA is vested with authority to disallow release of allowance not authorized by law even if authorized by the LWUA.
Held:
Art. IX, Sec. 2 D of the Constitution mandates the COA to audit all the government agencies, including government-owned and controlled corporations (GOCC) with original charters. The COA is vested with authority to disallow illegal or irregular disbursements of government funds. A Water District is a GOCC with a special charter since it is created pursuant to special law, PD 198. The COA can disallow allowances not authorized by law, even if authorized by the LWUA.
Considering that the disallowed allowances were received in good faith, without knowledge that payment had no legal basis, the allowances need not to be refunded.