Feliciano v. Commission on Audit
G.R. No. 147402; Jan. 14, 2004
A Special Audit Team from COA Regional Office No. VIII audited the accounts of Leyte Metropolitan Water District (LMWD). Subsequently, LMWD received a letter from COA dated 19 July 1999 requesting payment of auditing fees. As General Manager of LMWD, petitioner sent a reply informing COA’s Regional Director that the water district could not pay the auditing fees. Petitioner cited as basis for his action Sections 6 and 20 of Presidential Decree 198 (“PD 198”, as well as Section 18 of Republic Act No. 6758 (“RA 6758”). The COA denied petitioner Ranulfo C. Feliciano’s request for COA to cease all audit services, and to stop charging auditing fees, to LMWD. The COA also denied petitioner’s request for COA to refund all auditing fees previously paid by LMWD.
1) Whether a Local Water District (“LWD”) created under PD 198, as amended, is a government-owned or controlled corporation subject to the audit jurisdiction of COA;
2) Whether Section 20 of PD 198, as amended, prohibits COA’s certified public accountants from auditing local water districts; and
3) Whether Section 18 of RA 6758 prohibits the COA from charging government-owned and controlled corporations auditing fees.
The petition lacks merit. LWDs are not private corporations because they are not created under the Corporation Code. LWDs exist by virtue of PD 198, which constitutes their special charter. Since under the Constitution only government-owned or controlled corporations may have special charters, LWDs can validly exist only if they are government-owned or controlled. To claim that LWDs are private corporations with a special charter is to admit that their existence is constitutionally infirm.
Petitioner’s claim that the auditing fees COA charges LWDs for audit services violate the prohibition in Section 18 of RA 6758 has no basis. Section 18 of RA 6758 prohibits COA personnel from receiving any kind of compensation from any government entity except “compensation paid directly by COA out of its appropriations and contributions.” COA may charge GOCCs “actual audit cost” but GOCCs must pay the same directly to COA and not to COA auditors. Petitioner has not alleged that COA charges LWDs auditing fees in excess of COA’s “actual audit cost.” Neither has petitioner alleged that the auditing fees are paid by LWDs directly to individual COA auditors. Thus, petitioner’s contention must fail.