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Nea v. Coa
Nea v. Coa
CommissiononAudit
NationalElectrificationAdministration,petitionerv.CommissiononAudit,respondent
Doctrine :TheBranchesofGovern
Doctrine:TheBran chesofGovernment;Execut
ment;ExecutiveDepartment;
iveDepartment;Powersand
PowersandFunctionsof
Functionsofthe
the
President;ControlofEx
President;ControlofExecutiveDepar
ecutiveDepartments*
tments*
Nature :SpecialCivilActionintheSupremeCourt.Certiorari.
Nature:SpecialCivilActionintheSupremeCourt.Certiorari.
Date:2002
Date:2002
Ponente:Carpio,J.
Ponente:Carpio,J.
Facts:
Facts:
Governmentemployeesalaries
Governmentemployeesalarieswereraised
wereraisedviaaJoint
viaaJointResolutionof
ResolutionofCongress(No.
Congress(No.01),urgingthe
01),urgingthe
Presidenttorevisethe
Presidenttorevisetheexistingcompen
existingcompensation.This
sation.Thiswasmadeinto
wasmadeintoa4-yearpr
a4-yearprogram.On28
ogram.On28
December1996,PresidentRamos
December1996,PresidentRamosissuesExecuti
issuesExecutiveOrderNo.
veOrderNo.389(EO389)to
389(EO389)toimplementthe
implementthefinal
final
yearsalaryincreasesa
yearsalaryincreasesauthorizedbyt
uthorizedbytheJointR
heJointResolution.EO
esolution.EO389calledf
389calledfora2-tran
ora2-tranche(or2-par
che(or2-part)
t)
salaryincrease:oneon
salaryincrease:oneon1January
1January1997,andanot
1997,andanotheron1Nove
heron1November1997.
mber1997.
InJanuary1997,petitione
InJanuary1997,petitionerNEAimplemen
rNEAimplementedthesal
tedthesalaryincrease
aryincreases.However,th
s.However,theyimplements
eyimplementsuch
uch
increaseinasingle
increaseinasinglelumpsumbeginn
lumpsumbeginning1Januar
ing1January1997(NEAacc
y1997(NEAacceleratedthe
eleratedtheimplementation
implementationby
by
payingthesecondtranche
payingthesecondtranchestarting1
starting1Januaryinst
Januaryinsteadof1Novembe
eadof1November).Respondent
r).RespondentCOAissueda
COAissueda
NoticeofSuspensionandNot
NoticeofSuspensionandNoticesofDisal
icesofDisallowance.The
lowance.TheNoticesofD
NoticesofDisallowance
isallowancewereappeale
wereappealedby
dby
NEA,butrejectedbytheCommissionenbanc.Thedecisi
enbanc .Thedecisionofthe
onoftherespondentwas
respondentwasthenchal
thenchallenged
lenged
intheSupremeCourt.
Issues:
Issues:
DidtheCOAcommitagravea
DidtheCOAcommitagraveabuseofdiscre
buseofdiscretionamounting
tionamountingtolackor
tolackorexcessofj
excessofjurisdictionin
urisdictionin
disallowingtheincrease
disallowingtheincreasedsalaries?
dsalaries?Inother
Inotherwords,isNEA
words,isNEAallowedto
allowedtoaccelerate
acceleratetheimplementa
theimplementation
tion
ofthesalariesduetoavailabilityoffunds?
Held:
Held:
No,COAdidnotcommitany
No,COAdidnotcommitanygraveabuseof
graveabuseofdiscretion.
discretion.Neitheris
NeitherisNEAallowe
NEAallowedtoacceler
dtoacceleratethe
atethe
implementation.
Thepetitionwasdismissedfor
Thepetitionwasdismissedforlackof
lackofmerit.COA’s
merit.COA’sdecisionwasa
decisionwasaffirmed
ffirmedintoto.
intoto.
Ratio:
Ratio:
OnNEA’sacceleratedimplementationanditsaccordancewiththelaw.
TheCourtruledthatsuchaccelerationwasnotinaccordancewiththelaw.NEAclaimedthat
RepublicActNo.8250(Gen
RepublicActNo.8250(GeneralAppropriat
eralAppropriationsActof
ionsActof1997)wasthe
1997)wastheirlegalb
irlegalbasis.However,
asis.However,such
such
lawwasnotself-executory. BudgetaryappropriationsundertheGAAdonotconstitute
unbridledauthoritytogovernmentagenciestospendtheappropriatedamountsasthey
wish.
ItemizationofthePersona
ItemizationofthePersonalServices
lServices(theappropriati
(theappropriationusedby
onusedbyNEA)isprepare
NEA)isprepareddafter
after the
the
enactmentoftheGAA,
enactmentoftheGAA,andrequire
andrequirestheapproval
stheapprovalofthePre
ofthePresident(Sec.
sident(Sec.23,Chap.4,
23,Chap.4,BookIVof
BookIVofthe
the
AdministrativeCode,p.229).
AdministrativeCode,p.229).Theexecution
TheexecutionoftheG
oftheGAAissubjec
AAissubjecttoaprogra
ttoaprogramofexpendit
mofexpendituretobe
uretobe
approvedbythePresident,whichwillbethebasisforthefundrelease(Sec.34,Chap.5,BookIVof
theAdministrativeCode,p.229).
NoportionoftheappropriationsintheGAAshallbeusedforpaymentofanysalaryincrease,unless
authorizedbylaw(Sec.60,Chap.7,BookVIoftheAdministrativeCode,p.230).Sec.33ofthe1997
GAA(p.230)alsoprovidesforsalaryincreasessubjecttotheapprovalofthePresident .
Inessence,themereapprovalofCongressoftheGAAdoesnotmakethefundsavailablefor
spendinginstantly.Thefundsmuststillbecollectedduringthefiscalyear.
NEAalsoargues,fromSec.10ofEO389(p.231)thatadequatelyfundedgovernment-ownedor
controlledcorporations(GOCCs)areexempted.TheCourtrejectedthisargument,asSec.10only
referstoGOCCswithinsufficientfunds.ThereisnothingintheSectionthatallowsthosewith
sufficientfundstoacceleratetheirschedule.ThereisnoexpressorimpliedauthorizationinSec.10.
NEAalsoarguesthatsuchaccelerationwasallowedinaMemorandumoftheOfficeofthePresident
(7November1995,p.232).However,theCourtpointedoutthattheacceleratedimplementationis
alsoalloweduponapprovaloftheDepartmentofBudgetandManagement(DBM).Therearealso
ninetermsandconditions,whichmustbemetbytheagency(listedinpp.233-234,althoughthey
arenotnecessary).NEAdidnotcomplybyseekingapprovalfromtheDBM.
TheCourtalsopointedoutthatthepetitionercannotassailtheauthorityofthePresidenttoissue
EO389.TheAdministrativeCodegivesthePresidentsuchpowers(p.234).JointResolutionNo.01
hasalsoacknowledgedsuchauthority(p.235).Consideringalsothatitisthefourthandfinalyear,
theCourtfounditoddthatNEAdidnotquestionthepreviousEOs.
NEAalsoarguedthatCOAdidnothavethepowerindeterminingwhetherNEAviolatedthelaw.
COAexceededitsauthorityinitsinquiry.NEAcitedGuevarav.Gimenez .However,theSupreme
CourtoverturnedthisdecisionwithCaltexPhilippines,Inc.v.CommissiononAudit ,statingthat
Guevarawasnotcontrollinganymore,asitwasdecidedinlightofthe1935Constitution.The1987
ConstitutiongivestheCommissionmorepowers,asprovidedinSec.2(D),Art.IX(p.237).The
ConstitutionandotherlawsmandatetheCommissiontoauditallgovernmentagencies,including
GOCCs.
OntheDBM’sapprovalofNEA’sproposedbudget.
NEAalsocontendsthattheDBM’sapprovalofNEA’sproposedbudgetwasanapprovalalsoofthe
acceleratedimplementation.ThiswasbecauseNEAincludedsuchacceleratedimplementationinits
proposal.TheCourtagainreferredtothenineconditionsrequiredofthemfortheapprovalto
actuallytakeplace.Infact,theapprovaloftheproposedbudgetwasonlyapartofthefirstphaseof
theentirebudgetprocess.(Therearefourphases:BudgetPreparation,BudgetAuthorization,
BudgetExecution,andBudgetAccountability).
OncetheproposedbudgetwasapprovedbytheDBM,itissubmittedtoCongressforevaluationand
inclusionintheappropriationslaw.Thisauthorizationdoesnotincludetheauthorityto
disburse.
*OnthePresident’scontrolofallexecutivedepartments.
TheCourtfinallycitedthecontrolofthePresidentoverallexecutivedepartments,bureaus,and
offices,asprovidedbyoursystemofgovernment.Sec.17,Art.VIIofthe1987Constitutionprovides
forthis(p.239).AccordingtotheCourt:“Thepresidentialpowerofcontrolovertheexecutive
branchofgovernmentextendstoallexecutiveemployeesfromCabinetSecretarytothe
lowliestclerk.”Thispowerisself-executinganddoesnotrequirestatutoryimplementation .It
cannotbelimitednorwithdrawnbyCongress.
Allotherexecutiveofficialsmustimplementingoodfaithhisdirectivesandorders.Thecasewould
nothavearisenhadNEAcompliedingoodfaithwiththedirectivesandordersofthePresident.
NEA’sreasonsindisregardingthePresidentwerepatentlyflimsy,evenill-conceived.
(Noseparateconcurringordissentingopinions.)