Civil Service Commission versus Department of Budget and Management

G.R. No. 158791

Facts:
CSC filed a petition for mandamus seeking to compel the DBM to release the balance of
its budget for fiscal year 2002. At the same time, it seeks a determination by this Court of the
extent of the constitutional concept of fiscal autonomy.
General Appropriation Act of 2002 (GAA) appropriated total funds amounting to
Php285,660,790.44 to Civil Service Commission (CSC). However, CSC complains that the total
amount of funds released by Department of Budget and Management (DBM) was only of
Php279,853,398.14, claiming that there is an unreleased balance of Php5,807,392.30. To CSC,
this balance was intentionally withheld by DBM on the basis of its no report, no release policy.

DBM proffers at any rate that the delay in releasing the balance of CSC budget was not
on account of any failure on CSC part to submit the required reports; rather, it was due to a
shortfall in revenues. Moreover, DBM contends that CSC did not exhaust administrative remedies
as it could have sought clarification from DBM Secretary regarding the extent of fiscal autonomy
before resorting to Court. Second, even assuming that administrative remedies were exhausted,
there are no exceptional and compelling reasons to justify the direct filing of the petition with
Supreme Court instead of the trial court, thus violating the hierarchy of courts.

Issue:
1. Whether or not DBMs policy of No Report, No Release is constitutional
2. Whether or not CSC filing to Supreme Court violates the procedural grounds and violated
the hierarchy of Courts

Ruling:

No, DBMs policy of No Report, No Release may not be validly enforced against offices
vested with fiscal autonomy is not disputed. This cannot be enforced against offices possessing
fiscal autonomy without violating Article IX (A), Section 5 of the Constitution which states: The
Commission shall enjoy fiscal autonomy. Their approved annual appropriations shall be
automatically and regularly released.
 In the case of Province of Batangas v. Romulo, the Court decided that, in construing the
phrase automatic release in Section 6 an automatic manner; without thought or conscious
intention. Being automatic, thus, connotes something mechanical, spontaneous and
perfunctory

In the event where total revenue collections are so low that they are not sufficient to
cover the total appropriations for all entities vested with fiscal autonomy. it would be practically
impossible to fully release the Judiciarys appropriations or any of the entities also vested with
fiscal autonomy for that matter, without violating the right of such other entities to an automatic
release of their own appropriations. It is under that situation that a relaxation of the
constitutional mandate to automatically and regularly release appropriations is allowed. Their
approved appropriations shall be automatically and regularly released. However, petitioners
claim that its budget may not be reduced by Congress lower than that of the previous fiscal year,
as is the case of the Judiciary, must be rejected as it is not state in the provision of Article IX (A),
Section 5 unlike in Art. VIII, Section 3.

No, CSC did not violate the procedural grounds, the rule on exhaustion of administrative
remedies invoked by CSC applies only where there is an express legal provision requiring such
administrative step as a condition precedent to taking action in court. As CSC is not mandated by
any law to seek clarification from the Secretary of Budget and Management prior to filing the
present action, its failure to do so does not call for the application of the rule. As for the rule on
hierarchy of courts, it is not absolute. A direct invocation of Supreme Court's original jurisdiction
may be allowed where there are special and important reasons therefor, clearly and specifically
set out in the petition. CSC justifies its direct filing of the petition with Supreme Court as the
matter involves the concept of fiscal autonomy granted to it as well as other constitutional
bodies, a legal question not heretofore determined and which only the Honorable Supreme Court
can decide with authority and finality.