a. The law establishing Philippine Funds Inc, is unconstitutional.

Pursuant to the Constitution, No law shall be passed exempting any entity of the Government or its
subsidiary in any guise whatever, or any investment of public funds, from the jurisdiction of the
Commission on Audit.

Here, the law passed by Congress establishing the Philippine Funds Inc, a private corporation to
received foreign donations, disbursement of which was made through a mere action of its Board of
Directors, to avoid delays in the release of the donated funds occasioned by the astringent rules of
procurement. Also, the release would not come under the Commission on Audit is unconstitutional
because, a corporation whether with or without an original charter, is under the audit jurisdiction of the
Commission on Audit so long as the government owns or has controlling interest in it.

b. No. a Congress cannot pass the law that would exempt the foreign grants from the jurisdiction
of the COA.
Pursuant to the Constitution provides that. No law shall be passed exempting any entity of the
Government or its subsidiary in any guise whatever, or any investment of public funds, from the
jurisdiction of the Commission on Audit.
Here, the Congress pass a law that would exempt the foreign grants from the jurisdiction of the COA
is void, because. All funds received by the Government pursuant to its power of taxation or through a
donation shall accrue to the National Treasury. Such funds become a Government funds and shall be
subject to the jurisdiction of the COA.
Thus, a Congress cannot pass the law that would exempt the foreign grants from the jurisdiction of
the COA.