G.R. No. 250089.

November 09, 2021

PHILIPPINE HEALTH INSURANCE CORPORATION, PETITIONER, VS.
COMMISSION ON AUDIT AND CHAIRPERSON MICHAEL G. AGUINALDO,
RESPONDENTS.
LOPEZ, J., J.
PROBLEM:
In 2013, COA issued a Notice of Disallowance (ND) disallowing the payment of different
benefits granted to employees of PHIC amounting to P56.5 million. Aggrieved, PHIC
filed an appeal with the COA-Corporate Gov’t Cluster saying that such payments are
covered by its fiscal autonomy under the National Health Insurance Act.
The COA-CGS affirmed the disallowance saying that the power granted by the Act to
PHIC in determining the compensation structure of its employees is not absolute; there
must first be approval of the President. It also affirmed the liability of the employees for
lack of good faith as such benefits were already disallowed in audit for lack of legal
basis as early as 2009. COA-Commission Proper likewise affirmed the same. Whether
there was grave abuse of discretion amounting to lack or excess of jurisdiction in COA’s
part.
ANSWER:
No. COA did not commit any grave abuse of discretion in affirming the assailed
ND.
COA's general audit power is "among the constitutional mechanisms that give life to the
check and balance system inherent in our form of government.” This authority to rule on
the legality of the disbursement of government funds finds force in Section 2, Article IX-
D of the 1987 Constitution.
There is grave abuse of discretion when there is an evasion of a positive duty or a
virtual refusal to perform a duty enjoined by law or to act in contemplation of law as
when the judgment rendered is not based on law and evidence but on caprice, whim
and despotism.
It is the general policy of the Court to sustain the factual findings of administrative
bodies charged with their specific field of expertise, such as the COA. In the absence of
a substantial showing that such findings were made from an erroneous estimation of the
evidence presented, they are conclusive, and in the interest of the governmental
structure, should not be disturbed.