Engr. Ranulfo C. Feliciano vs.

COA
FACTS:
A Special Audit Team from COA Regional Office No. VIII audited the accounts of
Leyte Metropolitan Water District (LMWD). For its auditing services, COA requested
payment but was denied by Petitioner Feliciano as General Manager of LMWD, citing
PD198 and Section 18 of RA 6758. He further requested that COA cease all audit
services, stop charging auditing fees and refund all auditing fees previously paid by
LMWD.
On March 16, 2000, petitioner received the Resolution of COA Chairman Celso
Gangan, holding that local water districts are not private corporations, and are
therefore under its audit jurisdiction, as pronounced by the Supreme Court in the
case of Davao City Water District vs. CSC and COA.
ISSUE:
Whether or not a local water district created under PD198, as amended, is a
government-owned or controlled corporation subject to the audit jurisdiction of COA
RULING:
The petition lacks merit.
The Constitution recognizes two classes of corporations. The first refers to private
corporations created under a general law. The second refers to government-owned
or controlled corporations created by special charters. Under existing laws, that
general law is the Corporation Code.
A local water district is considered a GOCC with an original charter. It exists as a
corporation only by virtue of PD198, which expressly confers on LWDs corporate
powers. Without PD198, LWDs would have no corporate powers. PD 198 constitutes
the special enabling charter of LWDs. Thus, LWDs are government-owned and
controlled corporations with a special charter, and not private corporations created
under the Corporation Code.
LWDs, therefore, are subject to the audit jurisdiction of COA, as provided under
Section 2(1), Article IX-D of the Constitution, which mandates the latter to audit all
government agencies or instrumentalities, including government-owned and
controlled corporations (GOCCs) with original charters, as well as other governmentowned or controlled corporations without original charters.