COMMISSION ON AUDIT Guevarra v Gimenez 6 SCRA 813 FACTS: In 1954, the District Engineer of Sorsogon prepared a program of wor

and detai!ed estimate for the reconstr"ction of the Sorsogon Centra! Schoo! #"i!ding$ Specifications consisting of fi%e pages were !i ewise prepared$ The Cost of painting was !eft o"t in the detai!ed estimate and specifications$ The papers were s"#mitted to the Di%ision Engineer in &"cena, '"e(on, who ret"rned them d"!) appro%ed with an a"thori(ed appropriation of *4+,+++$++ "provided that painting shall be included"$ ,here"pon, the specification for painting was according!) made and appended to the specifications as page si-$ In A"g"st 1954 the District Engineer ad%ertised an in%itation to #id for .f"rnishing of a!! materia!s, !a#or and p!ant, for reconstr"ction/ pro0ect$ Fernando 1"e%arra2s #id of *34,5++ was dec!ared !owest and the contract was awarded to him$ Eight) fi%e da)s after comp!etion of the pro0ect, 1"e%arra fi!e with the Director of *"#!ic ,or s a written c!aim for the pa)ment of *4,56+$++ representing cost of painting not co%ered #) the contract$ After hearing, Secretar) of *"#!ic ,or s and Comm"nications denied the c!aim and two motion for reconsideration were a!so denied$ 7n appea!,the A"ditor 1enera! a!so denied the c!aim$ 1"e%arra appea!ed to the S"preme Co"rt p"rs"ant to CA 364$ ISS8E: ,hether the contract for the reconstr"ction of the schoo! #"i!ding inc!"ded the painting$ 9E&D: :es$ Testimonies of the emp!o)ees2 sho"!d #e gi%en more weight than those of the contractors$ These go%ernment emp!o)ees testified as to what transpired in the performance of their d"ties$ The pres"mption is that officia! d"t) has #een reg"!ar!) performed$ ;<ote:The main iss"e of the case has nothing to do with C7A$ 9owe%er, note that, c!aims and dis#"rsements of p"#!ic f"nds sho"!d ha%e #e co"rsed to C7A= Orocio v COA 213 SCRA 109 FACTS: 7n accident occ"rred at the >a!a)a *ower *!ant of the <ationa! *ower Corporation ?<*C@ where two indi%id"a!s s"ffered in0"r) A Ernesto *"ma!o), an <*C emp!o)ee, and Domingo A#odi(o, a cas"a! emp!o)ee 7*&1S, the 0anitoria! contractor of the <*C$ The two in0"red personne! were #ro"ght to the hospita!$ <*C initia!!) ad%anced the amo"nt for hospita!i(ation e-penses for the treatment of A#odi(o, and set "p this as an acco"nt recei%a#!e from 7*&1S ded"cted on a staggared #asis from the !atter2s #i!!ing against the <*C "ti! the same was f"!!) satisfied$ S"#seB"ent!), 7*&1S reB"ested a ref"nd of the tota! amo"nt ded"cted from their #i!!ings representing pa)ment of the ad%ances made #) the <*C$ In the !ight of the fa%ora#!e recommendation of the <*C !ega! co"nse!, the amo"nt of hospita!i(ation e-penses was ref"nded to the contractor 7*&1S$ The 8nit A"ditor of the Commission on A"dit disa!!owed the ref"nd of the hospita!i(attion e-penses of A#odi(o contending that "nder the contract, there is no emp!o)eeCemp!o)er re!ation #etween the <*C and the 7*&1S emp!o)ees$ 9ence,<*C is not answera#!e for s"ch e-penses$ 1enera! Co"nse! as ed for a reconsideration of the said disa!!owance denied$ The C7A Degiona! Director, herein respondent, confirmed the disa!!owance$ <*C 1enera! Co"nse!f s"#mitted a second reB"est for reconsideration and 0"stifies that his !ega! opinion is #ased on Sec 15CA of DA 5395 ?<*C Charter@ which pro%ides that .$$$ a!! !ega! matters sha!! #e hand!ed #) the 1enera! Co"nse! of the Corporation$$$/ ISS8E: ,hether the dis#"rsement on the #asis of the !ega! opinion of the !ega! co"nse! of the <*C ?B"asiC 0"dicia! f"nction@ is within the scope of the a"diting power of the C7AE 9E&D: The Constit"tion grants the C7A the power, a"thorit) and d"t) to e-amine, a"dit and sett!e a!! acco"nts pertaining to the e-pendit"res or "ses of f"nds and propert) pertaining to the 1o%ernment or an) of its s"#di%isions, agencies or instr"menta!ities, inc u!in" "overnmen#$o%ne! or con#ro e! cor&ora#ion'$ The matter of a!!owing in a"dit a dis#"rsement acco"nt is not a ministeria! f"nction, #"t one which necessitates the e-ercise of discretion$ Fesides, the 7*&1S, A#odi(o2s emp!o)er, admitted that the incident was p"re!)
POLITICAL LAW REWIER: CONSTITUTIONAL COMMISSION (COA)

accidenta! and that there is no showing whatsoe%er in the accident report of an) neg!igence on the part of the <*C or its emp!o)ees$ The <*C, as a go%ernmentCowned corporation, is "nder the C7A2s a"dit power$ The C7A sho"!d not #e #o"nd #) the opinion of the !ega! co"nse!f of said agenc) or instr"menta!it) which ma) ha%e #een the #asis for the B"estioned dis#"rsements, otherwise it wo"!d #ecome a tooth!ess tiger and its a"diting f"nctions wo"!d #e a meaning!ess and f"ti!e e-ercise$ O'mena v COA 238 SCRA 363 FACTS: De)na!do de !a Cerna was sta##ed and was r"shed to Ce#" Cit) >edica! Center #"t died in the same da) d"e to se%ere !oss of #!ood$ 9is parents c!aimed that De)na!do wo"!d not ha%e died were it not for the .ineptit"de, gross neg!igence, irresponsi#i!it), st"pidit) and incompetence of the medica! staff/ of the >edica! Center$ The parents s"#seB"ent!) instit"ted in the DTC an action for reco%er) of damages which the Cit) of Ce#" was imp!eaded as defendant on the theor) that as emp!o)er of the a!!eged neg!igent doctors, it is %icario"s!) responsi#!e for the !atters2 neg!igence$ To p"t an end to the contro%ers), a compromise agreement was entered into #) the p!aintiffs and defendant Cit) of Ce#" for the pa)ment of the s"m of *3+,+++$ The agreement was ratified #) the Sangg"niang *ang!"ngsod of the Cit) and a"thori(ed the Cit) F"dget 7fficer of Ce#" to inc!"de in S"pp!ementa! F"dget <o$ 5 of the Ci) for the )ear 19G9 the amo"nt of *3+,+++ for financia! assistance to the parents of the !ate De)na!do de !a Cerna/$ 9owe%er, the respondent C7A disa!!owed the financia! assistance granted to the spo"ses de !a Cerna ho!ding that it is not within the power of the Sangg"niang to pro%ide financia! assistance, either on genera! we!fare c!a"se or h"manitarian gro"nds, to promote economic and pri%ate interests of certain indi%id"a! on!)$ Despondent f"rther stressed that not #eing a part) to the compromise agreement, it was not #o"nd #) it and that an) mone) c!aim arising therefrom was s"#0ected to its "s"a! a"dit in the p"rs"ance of the %a!id e-ercis and discharge of its constit"tiona! power, a"thorit) and d"t)$ The Cit) of Ce#" fi!ed a >otion for Deconsideraton #"t was denied$ 9ence this instant petition$ ISS8E: ,hether C7A committed gra%e a#"se of discretion in disa!!owing the cit)2s appropriaton of *3+,+++ made conforma#!) with the compromise agreement in the ci%i! s"it against the Cit)E 9E&D: :ES$ There can #e no B"estion of C7A2s competence to act on the s"pp!ementa! #"dget for 19G9 of the Cit) of Ce#"$ It appears that respondent C7A grei%o"s!) misconstr"ed the "nderta ing of Ce#" Cit) to pa) *3+,+++ to the heirs of the deceased De)na!do de !a Cerna$ It was constr"ed as intended on!) to promote the pri%ate we!fare and interest of the de !a Cerna fami!)$ The respondent is we!! aware that the appropriation was a part of the pac age agreed "pon #) a!! parties in a ci%i! case for the amica#!e sett!ement of the contro%ers)$ H"dicia! compromise is conc!"si%e and #inding on a!! the parties$ Sam(e i v )rovince o* I'a(e a 210 SCRA 80 FACTS: An agreement was entered into #) and #etween the Cit) of Isa#e!a and ECS Enterprise for the p"rchase of 3++ "nits of whee!#arrows, G34 pieces of sho%e!s, and 1 set of radio comm"nication eB"ipment$ Fased on the finding of the *rice E%a!"ation Di%ision A C7A Technica! Ser%ices 7ffice, the *ro%incia! A"ditor ad%ised the *ro%incia! Treas"rer that an o%erpriced in the tota! amo"nt of *519,+46$6+ e-ists o"t of the tota! price of *451,+44$6+ offered #) ECS Enterprises or an o%erpa)ment of *195,G93$1+$ It recommended that the f"t"re c!aim of ECS Enterprises #e withhe!d$ *ro%incia! A"ditor forma!!) forwarded the matter with the Degiona! Director who forma!!) endorsed the stand$ ECS appea!ed the decision #"t was denied for !ac of merit$ 9ence this instant petition$ *etitioner assai!s the r"!ing of the C7A as not %a!id$ It contends that the contract of sa!e has not on!) #een perfected #etween the *ro%ince of Isa#e!a and petitioner #"t de!i%er) has #een made #) it with the corresponding partia! pa)ment #) the *ro%ince of Isa#e!a$ Th"s, it is a!!eged!) inc"m#ent "pon C7A to a"thori(e the pa)ment of the #a!ance #eca"se to act otherwise wi!! constit"te an impairment of contract$ ISS8E:
POLITICAL LAW REWIER: CONSTITUTIONAL COMMISSION (COA)

,hether the r"!ing of C7A is in%a!id so far as it wi!! constit"te impairment of contractsE 9E&D: In the e-ercises of the reg"!ator) power %ested "pon it #) the Constit"tion, the Commission on A"dit adheres to the po!ic) that go%ernment f"nds and propert) sho"!d #e f"!!) protected and conser%ed and that irreg"!ar, "nnecessar), e-cessi%e or e-tra%agant e-pendit"res or "ses of s"ch f"nds and propert) sho"!d #e pre%ented$ 7n the proposition that improper or wastef"! spending of p"#!ic f"nds or immora! "se of go%ernment propert), for #eing high!) irreg"!ar or "nnecessar), or scanda!o"s!) e-cessi%e or e-tra%agant, offends the so%ereign peop!e2s wi!!, it #ehoo%es the Commission on A"dit to p"t a stop thereto$ $ $ $ <o !ess than the Constit"tion has ordained that the C7A sha!! ha%e e-c!"si%e a"thorit) to define the scope of its a"dit and e-amination, esta#!ish the techniB"es and methods reB"ired therefor, and prom"!gate acco"nting and a"diting r"!es and reg"!ations, inc!"ding those for the pre%ention and disallowance of irregular, unnecessary excessive, extravagant or unconscionable expenditures or "se of government funds and properties. ?Art$ II D, Sec$ 6 ?6@ 19G4 Constit"tion of the *hi!ippines@ +u'#aman#e v COA 216 SCRA 13, FACTS: *etitioner is the Degiona! &ega! Co"nse! of <ationa! *ower Corporation ?<*C@$ As s"ch he was iss"ed a go%ernment %ehic!e with p!ate n"m#er SCC 3G4$ *"rs"ant to <*C po!ic) as ref!ected in the Foard Deso!"tion <o$ G1C95 a"thori(ing the month!) dis#"rsement of transportation a!!owance, the petitioner, in addition to the "se of go%ernment %ehic!e, c!aimed his transportation a!!owance for the month of Han"ar) 19G9$ 7n >a) 31, 199+, the petitioner recei%ed an A"ditor2s <otice to *erson &ia#!e dated Apri! 14, 199+ from respondent Degiona! A"ditor >artha Do-ana Ca#"rian disa!!owing *1,65+$++ representing aforesaid transportation a!!owance$ The petitioner mo%ed for reconsideration of the disa!!owance of the c!aim for transportation a!!owance which was denied$ *etitioner appea!ed this denia! to the Commission on A"dit which denied do d"e co"rse$ 9ence this petition$ The petitioner ta es e-ception from the co%erage of said circ"!ar contending that s"ch circ"!ar did not mention the <*C as one of the corporationsJoffices co%ered #) it ? C7A Circ"!ar <o$ 45C5@ ISS8E: ,hether s"ch denia! to gi%e d"e co"rse to the appea! of herein petitioner constit"tes gra%e a#"se of discretion amo"nting to !ac of 0"risdictionE ,hether <*C ta es an e-ception from s"ch co%erage of the said circ"!ar contending that s"ch circ"!ar did not mention <*C as one of the corporationsJoffices co%ered #) it$ 9E&D: <7$ 1ra%e a#"se of discretion imp!ies s"ch capricio"s and whimsica! e-ercise of 0"dgment as is eB"i%a!ent to !ac of 0"risdiction, or in other words where the power is e-ercised in an ar#itrar) or despotic manner #) reason of passion or persona! hosti!it), and it m"st #e so patent and gross as to amo"nt to an e%asion of positi%e d"t) or to a %irt"a! ref"sa! to perform the d"t) en0oined or to act at a!! in contemp!ation of !aw$ <7$ It is %er) patent that the circ"!ar is addressed, among others, to managing heads of 1o%ernmentC owned or Contro!!ed Corporations, the <*C #eing he!d "nder s"ch categor) of corporations$ ,e !i ewise cannot s"stain petitioner2s contention that the Commission, in the e-ercise of its power granted #) the Constit"tion, "s"rped the stat"tor) f"nctions of the <*C Foard of Directors for its !eads to the a#s"rd conc!"sion that a mere Foard of Directors of a go%ernmentCowned and contro!!ed corporation, #) iss"ing a reso!"tion, can p"t to na"ght a constit"tiona! pro%ision which has #een ratified #) the ma0orit) of the Fi!ipino peop!e$ If ,e wi!! not s"stain the Commission2s power and d"t) to e-amine, a"dit and sett!e acco"nts pertaining to this partic"!ar e-pendit"res or "se of f"nds and propert), owned or he!d in tr"st #) this go%ernmentCowned and contro!!ed corporation, the <*C, ,e wi!! #e rendering in"ti!e this Constit"tiona! Fod) which has #een tas ed to #e %igi!ant and conscientio"s in safeg"arding the proper "se of the go%ernment2s, and "!timate!), the peop!e2s propert)$ Sa i"um(a v COA 11- SCRA 669 FACTS: 7n the #asis of the sworn comp!aint of Editha Sa!ig"m#a, the C7A instit"ted the administrati%e case against &eonardo Este!!a, A"diting E-aminer III, in the A"ditor2s 7ffice of >isamis 7ccidenta!$ The charge was
POLITICAL LAW REWIER: CONSTITUTIONAL COMMISSION (COA)

that the respondent raped Editha Sa!ig"m#a on se%era! occasions$ For ins"fficienc) of e%idence, the charge was dropped #) C7A$ Sa!ig"m#a now wants the S"preme Co"rt of re%iew the C7A decision$ She insists that the decision of the C7A is contrar) to the e%idence and the same time raises fact"a! iss"es$ ISS8E: ,hether the action wi!! prosperE 9E&D: The petition has to #e dismissed for the fo!!owing reasons: 1$ 7"r power to re%iew C7A decisions refers to mone) matters and not to administrati%e cases in%o!%ing the discip!ine of its personne!$ 6$ E%en ass"ming that ,e ha%e 0"risdiction to re%iew decisions on administrati%e matters as mentioned a#o%e, ,e can not do so on fact"a! iss"esK 7"r power to re%iew is !imited to !ega! iss"es$

Re(ecca +ar(o v Commi''ion on Au!i# .Oc#o(er 10/ 20080 FACTS: *etitioners are officia!s of the &oca! ,ater 8ti!ities Administration ?&,8A@ and designated mem#ers of the Interim Foard of Directors of the San Fernando ,ater District ?SF,D@$ 7n Decem#er 4, 1995 and Fe#r"ar) 16 1995, the &,8A Foard of Tr"stees iss"ed Foard Deso!"tion <o$ 313, Series of 1995 and Foard Deso!"tion <o$ 39, Series of 1995 respecti%e!)$ These Foard Deso!"tions a"thori(ed the Foard of Directors of SF,D to recei%e reim#"rsa#!e a!!owances in the form of Depresentation and Transportation A!!owance ?DATA@, Tra%e! A!!owance, and E-traordinar) L >isce!!aneo"s E-pense ?E>E@K Christmas Fon"sK 8niform A!!owanceK Dice A!!owanceK >edica! and Denta! FenefitsK and *rod"cti%it) Incenti%e Fon"s$ *"rs"ant to the said Foard Deso!"tions, petitioners recei%ed E>E, Dice A!!owance, Christmas Fon"s, and *rod"cti%it) Fon"s from SF,D d"ring the ca!endar )ears starting 1994 "nti! 1995$ 7n H"ne 3+, 1994, a Specia! A"dit Team of C7A Degiona! 7ffice <o$ III at San Fernando, *ampanga a"dited the financia! acco"nts of SF,D for the period co%ering Han"ar) 1, 1994 to H"!) 15, 1995$ The C7A Specia! A"dit Team disa!!owed the pa)ment of the a#o%eCmentioned #enefits and a!!owances recei%ed #) petitioners after the same were fo"nd to #e e-cessi%e and contrar) to Sections 66G, 156 and 153 of the 1o%ernment Acco"nting and A"diting >an"a! ?1AA>@ and to Ci%i! Ser%ice Commission ?CSC@ Deso!"tion <o$ 954+43 in re!ation to Section 13 of *residentia! Decree ?*D@ <o$ 19G ?*ro%incia! ,ater 8ti!ities Act of 1943@ as amended$ *etitioner were directed to ref"nd the #enefits and a!!owances s"#0ect to the disa!!owance$ *etitioners contend that the C7A !ac s 0"risdiction to dec!are whether or not &,8A Foard Deso!"tion <os$ 313 and 39 are consistent with Section 13 of *D <o$ 19G, as amended, on matters pertaining to the compensation and Mother #enefitsM of the Directors of the &,D$ This is a!!eged!) the f"nction of the co"rts$ The Degiona! Director affirmed the disa!!owance$ *etitioners e!e%ated the matter to C7A$ C7A dec!ared that the s"#0ect #on"ses and a!!owances recei%ed #) petitioners constit"ted additiona! compensation or rem"neration$ *etitioners2 motion for reconsideration was denied$ 9ence this instant petition$ ISS8E: 1$ ,hether respondent has the 0"risdiction to mot" proprio dec!are &,8A Foard Deso!"tion <o$ 313, S$ 1995, as amended #) Deso!"tion <o$ 39, S$ 1995, to ##e tota!!) in conf!ict with Sec$ 13 of *D <o$ 19G as amended$ 6$ ,hether Sec 13, *D 19G, as amended, prohi#iting petitioners2 entit!ement to DATA, E>E, Fon"ses and 7ther Fenefits and A!!owances$ 9E&D: The Co"rt has a!read) sett!ed this iss"e in a m)riad of cases$ *artic"!ar!), in Rodolfo S. de Jesus [Catbalogan ater !istrict" v. C#$, the Co"rt "phe!d the a"thorit) and 0"risdiction of the C7A to r"!e on the !ega!it) of the dis#"rsement of go%ernment f"nds #) a water district and dec!ared that s"ch power does not conf!ict with the 0"risdiction of the co"rts, the DF>, and the &,8A$ Citing Section 6, S"#di%ision D, Artic!e II of the 19G4 Constit"tion the Co"rt dec!ared that it is the mandate of the C7A to a"dit a!! go%ernment agencies, inc!"ding go%ernmentCowned and contro!!ed corporations with origina! charters$ Indeed, the Constit"tion specifica!!) %ests in the C7A the a"thorit) to determine whether go%ernment entities comp!) with
POLITICAL LAW REWIER: CONSTITUTIONAL COMMISSION (COA)

!aws and reg"!ations in dis#"rsing go%ernment f"nds, and to disa!!ow i!!ega! or irreg"!ar dis#"rsements of go%ernment f"nds$ This independent constit"tiona! #od) is tas ed to #e %igi!ant and conscientio"s in safeg"arding the proper "se of the go%ernment2s, and "!timate!) the peop!e2s, propert)$ Anent the second iss"e, a water district is a go%ernmentCowned and contro!!ed corporation with a specia! charter since it is created p"rs"ant to a specia! !aw, *residentia! Decree ?*D@ 19G$ It is "ndenia#!e that *D 19G e-press!) prohi#its the grant of DATA, E>E, and #on"ses to mem#ers of the #oard of ,ater Districts$ )1i i&&ine Air 2ine' v COA 2,3 SCRA39 FACTS: In this specia! ci%i! action for certiorari and prohi#ition, petitioner *hi!ippine Air!ines$ Inc$ ?*A&@ see s to re%iew, ann"! end re%erse Decision <o$ 1164 of the Commission on A"dit ?C7A@ dated Han"ar) 5, 199+ and to prohi#it, en0oin and pre%ent C7A from enforcing or in an) wa) imp!ementing Department 7rder <o$ 19, s$ 1944 of the then Department of 1enera! Ser%ices as imp!emented #) C7A Circ"!ar <o$ 4GCG4, >emorand"m <o$ 49G and >emorand"m <o$ GGC555$ C7A Decision <o$ 1164 reB"ired *A& to p"rchase its f"e! reB"irements so!e!) from *etron Corporation ?*etron@$ *A& is a domestic corporation organi(ed and e-isting "nder the *hi!ippine !aws, principa!!) engaged in the air transport #"siness, #oth domestic and internationa!$ At the time of the fi!ing of the petition on Fe#r"ar) G, 199+, ma0orit) of its shares of stoc was owned #) the 1o%ernment Ser%ice Ins"rance S)stem ?1SIS@, a go%ernment corporation$ To ass"re itse!f of contin"o"s, re!ia#!e and costCefficient s"pp!) of f"e!, *A& adopted a s)stem of #idding o"t its f"e! reB"irements "nder a m"!tip!e s"pp!ier setC"p where#) *A& awarded to the !owest #idder si-t) percent ?5+N@ of its f"e! reB"irements and to the second !owest #idder the remaining fort) percent?4+N@, pro%ided it matched the price of the !owest #idder$ 7n A"g"st 14, 19G9, C7A wrote *A& a !etter stating .It has come to o"r attention that *A& internationa! f"e! s"pp!) contracts are e-piring this A"g"st 31, 19G9$ In this connection, )o" are ad%ised to desist from #idding the compan)2s f"e! s"pp!) contracts, considering that e-isting reg"!ations reB"ire go%ernmentCowned or contro!!ed corporations and other agencies of go%ernment to proc"re their petro!e"m prod"ct reB"irements from *ETD7< Corporation$/ *A& so"ght reconsideration of the A"g"st 14, 19G9 ad%ice, reiterating its reasons contained in an ear!ier !etter, for preferring to #id o"t and sec"re its f"e! s"pp!) from more than one s"pp!ier and for its contention that Department 7rder <o$ 19, s$ 1944, as circ"!ari(ed #) C7A 7ffice >emorand"m <o$ 49+, sho"!d not app!) to *A&$ The fina! appea! for reconsideration howe%er it was denied$ 9ence this assai!ed decision$ ISS8E: ,hether the Commission on A"dit committed gra%e a#"se of discretion amo"nt to !ac or e-cess of 0"risdiction in ho!ding that Department 7rder <o$ 19, of the def"nct department of genera! ser%ices app!ies to *A&E 9E&D: ;the Co"rt is compe!!ed to dismiss the petition p"rs"ant to the go%ernment2s pri%iti(ation program, *A&2s shares of stoc were #idded o"t ear!ier this )ear, res"!ting in the acB"isition #) *D 9o!dings, a pri%ate corporation, of 54N *A&2s o"tstanding stoc s$ *A& ha%ing ceased to #e a go%ernmentCowned or contro!!ed corporation, is no !onger "nder the a"dit 0"risdiction of the C7A$$ According!), the B"estion raised in this petition has c!ear!) #ecome moot and academic$= 9ad it not #een for this s"per%ening e%ent, *A& wo"!d ha%e o#tained the re!ief so"ght in the instant petition$ For a!tho"gh C7A was correct in r"!ing that Department 7rder <o$ 19 app!ied to *A& as a go%ernment agenc) at the time, it nonethe!ess gra%e!) a#"sed its discretion in not e-empting *A& therefrom$ The C7A is c!othed "nder Section 6?6@, Artic!e IICD of the 19G4 Constit"tion with the Me-c!"si%e a"thorit), s"#0ect to the !imitations in this Artic!e, to define the scope of its a"dit and e-amination, esta#!ish the techniB"es and methods reB"ired therefor, and prom"!gate acco"nting and a"diting r"!es, and reg"!ations inc!"ding those for the pre%ention and disa!!owance of irreg"!ar, "nnecessar), e-cessi%e, e-tra%agant or "nconsciona#!e e-pendit"res, or "ses of go%ernment f"nds and properties$M The a"thorit) granted "nder this constit"tiona! pro%ision, #eing #road and comprehensi%e eno"gh, ena#!es C7A to adopt as its own, simp!) #) reiteration or #) reference, witho"t the necessit) of reprom"!gation, a!read) e-isting r"!es and reg"!ations$ It ma) a!so e-pand the co%erage thereof to agencies or instr"menta!ities "nder its a"dit 0"risdiction$ The reasons gi%en #) *A& for see ing e-emption from the operation of Department 7rder <o$ 19 were, to o"r mind, meritorio"s$ The) far o"tweigh the po!ic) en"nciated in Department 7rder <o$ 19 of gi%ing
POLITICAL LAW REWIER: CONSTITUTIONAL COMMISSION (COA)

preference to go%ernment so"rces in the fi!!ing of the needs of the go%ernment for s"pp!ies$ Th"s, *A&2s #idding reB"irement conformed to the accepted po!ic) of the go%ernment to s"#0ect e%er) transactionJcontract to p"#!ic #idding in order to protect p"#!ic interest #) gi%ing the p"#!ic the #est possi#!e ad%antages thr" open competition and to a%oid or prec!"de s"spicion of fa%oritism and anoma!ies in the e-ec"tion of p"#!ic contracts$ Its m"!tip!e s"pp!ier setC"p was designed precise!) to meet e%er) contingenc) that might disr"pt its f"e! s"pp!)$ It #espo e of foresight, caref"! p!anning and so"nd #"siness 0"dgment on the part of *A&$ As a #"siness operation hea%i!) dependent on f"e! s"pp!), for *A& to re!) so!e!) on a sing!e s"pp!ier wo"!d indeed #e impractica#!e$ To com&e i# #o !o 'o %ou ! amoun# #o a "rave a(u'e o* !i'cre#ion on i#' &ar# a' #1i' mi"1# %e ea! #o irre"u ar/ e4ce''ive or uncon'ciona( e e4&en!i#ure'/ #1e ver5 evi 'ou"1# #o (e avoi!e! in #1e crea#ion o* #1e COA6

+a"a#'in" v Commi##ee on )rivi#iza#ion 2,6 SCRA 33, FACTS: *ETD7< was origina!!) registered with the Sec"rities and E-change Commission ?SEC@ in 1955 "nder the corporate name MEsso *hi!ippines, Inc$M ?ESS7@ as a s"#sidiar) of Esso Eastern, Inc$ and >o#i! *etro!e"m Compan), Inc$ In 1943, at the height of the wor!dCwide oi! crisis #ro"ght a#o"t #) the >idd!e East conf!icts, the *hi!ippine go%ernment acB"ired ESS7 thro"gh the *<7C$ ESS7 #ecame a who!!)Cowned compan) of the go%ernment "nder the corporate name *ETD7< and as a s"#sidiar) of *<7C$ In acB"iring *ETD7<, the go%ernment aimed to ha%e a #"ffer against the %agaries of oi! prices in the internationa! mar et$ It was fe!t that *ETD7< can ser%e as a co"nterfoi! against price manip"!ation that might go "nchec ed if a!! the oi! companies were foreignCowned$ Indeed, *ETD7< he!ped a!!e%iate the energ) crises that %isited the co"ntr) from 1943 to 1944, 1949 to 19G+, and 199+ to 1991$ 7n Decem#er G, 19G5, *resident Cora(on C$ AB"ino prom"!gated *roc!amation <o$ 5+ in the e-ercise of her !egis!ati%e power "nder the Freedom Constit"tion$ The *roc!amation is entit!ed M*roc!aiming and &a"nching a *rogram for the E-peditio"s Disposition and *ri%ati(ation of Certain 1o%ernment Corporations andJor the Assets thereof, and Creating the Committee on *ri%ati(ation and the Asset *ri%ati(ation Tr"st$M Imp!icit in the *roc!amation is the need to raise re%en"e for the 1o%ernment and the idea! of !ea%ing #"siness to the pri%ate sector$ The 1o%ernment can then concentrate on the de!i%er) of #asic ser%ices and the performance of %ita! p"#!ic f"nctions$ 7n >arch 65, 1993, the 1o%ernment Corporate >onitoring and Coordinating Committee ?1C>CC@ recommended a 1++N pri%ati(ation of *ETD7<$ *etitioners c!aims, among others, that there was a fai!ed #idding, contend that there were on!) three #idders$ 7ne of them, *ETD7<AS, s"#mitted a #id !ower than the f!oor price whi!e a second, fai!ed to preC B"a!if)$ Citing Section OC6Ca of C7A Circ"!ar <o$ G9C695 dated Han"ar) 64, 19G9, the) arg"e that where on!) one #idder B"a!ifies, there is a fai!"re of p"#!ic a"ction$ 8nder said C7A Circ"!ar, there is a fai!"re of #idding when: 1@ there is on!) one offerorK or ?6@ when a!! the offers are nonCcomp!)ing or "naccepta#!e$ In the case at #ench, there were three offerors: SA8DI ADA>C7, *ETD7<AS and ,EST>7<T$ ,hi!e two offerors were disB"a!ified, *ETD7<AS for s"#mitting a #id #e!ow the f!oor price and ,EST>7<T for technica! reasons, not a!! the offerors were disB"a!ified$ To constit"te a fai!ed #idding "nder the C7A Circ"!ar, a!! the offerors m"st #e disB"a!ified$ *etitioners "rge that in effect there was on!) one #idder and that it can not #e said that there was a competition on Man eB"a! footingM$ F"t the C7A Circ"!ar does not spea of accepted #ids #"t of offerors, witho"t distinction as to whether the) were disB"a!ified$ The C7A itse!f, the agenc) that adopted the r"!es on #idding proced"re to #e fo!!owed #) go%ernment offices and corporations, had "phe!d the %a!idit) and !ega!it) of the B"estioned #idding$ T1e in#er&re#a#ion o* an a"enc5 o* i#' o%n ru e' '1ou ! (e "iven more %ei"1# #1an #1e in#er&re#a#ion (5 #1a# a"enc5 o* #1e a% i# i' mere 5 #a'7e! #o a!mini'#er$

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