FELICIANO v.

COA

DOCTRINE: The Constitution and existing laws mandate COA to audit all government agencies, including
government-owned and controlled corporations (GOCCs) with original charters. The COAs audit
jurisdiction extends not only to government agencies or instrumentalities, but also to government-owned and
controlled corporations with original charters as well as other government owned or controlled corporations
without original charters.
SUMMARY: Feliciano argues that LWDs such as the LMWD is exempted from paying auditing fees to COA. The
Court however held that LWDs are GOCCs with a charter and therefore is subject to COA's audit jurisdiction.

FACTS:
A Special Audit Team from COA Regional Office No. VIII audited the accounts of Leyte Metropolitan
Water District (LMWD).
LMWD received a letter from COA requesting payment of auditing fees.
Renulfo Feliciano, a General Manager of LMWD, (1) informed COA's Regional Director that the water
district could not pay the auditing fees, citing as basis Sections 6 and 20 of PD 198, as well as Section
18 of RA 6758; (2) wrote asked COA through its Regional Director for refund of all auditing fees LMWD
previously paid to COA
COA Chairman Celso D. Gangan denied Feliciano's request and subsequent motion for reconsideration.
Feliciano filed the petition to the Supreme Court, contending that the COA committed grave abuse of
discretion amounting to lack or excess of jurisdiction.
COA invokes the case of Davao City Water District v. CSC and COA, saying that the Court has already
settled COA's audit jurisdiction over local water districts.

ISSUE:
Whether or not LWDs are subject to the COA's audit jurisdiction

RULING:
YES.
An LWD is a GOCC with an original charter. Section 2(1), Article IX-D of the Constitution provides for
COAs audit jurisdiction.
LWDs are not private corporations; they are not created under the Corporation Code, not
registered with SEC, have no articles of incorporation, and there are not stockholders or
members to elected their board directors. The local mayor or the provincial governor appoints
the directors of LWDs for a fixed term of office.
LWDs exist by virtue of PD 198 which constitutes their special charter and is effectively owned
and controlled by the government.
No amount of clever legislation can exclude GOCCs like LWDs from COAs audit jurisdiction.
Feliciano argues that PD 198 expressly prohibits COA auditors, or any government auditor for
that matter, from auditing LWDs.
Section 3, Article IX-C of the Constitution outlaws any scheme or devise to escape COAs audit
jurisdiction.
.: PD 198 cannot prevail over the Constitution.
COA may charge GOCCs actual audit cost but GOCCs must pay the same directly to COA and not to
COA auditors.
Section 18 of RA 6758 which Feliciano cites 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; it is nothing but an exception to the statutory ban on COA personnel
receiving compensation from GOCCs.

DISPOSITION: The COA's Resolutions are AFFIRMED. The 2nd Sentence of Section 20 of PD 198 is declared
void for being inconsistent with Sections 2(1) and (3), Article IX-D of the Constitution.