VICENCIO VS.

VILLAR
G.R. No. 182069, 3 July 2012

FACTS: In 2003 the Sangguniang Panglungsod ng Malabon (SPM), adopted City Ordinance No. 15-
2003. It authorizes the then City Vice-Mayor Yambao to negotiate for Consultancy Services.
Pursuant to it, the “2003 Consultancy Service Contract” was made. Subsequently, during the May
2004 elections, Arnold Vicencio was elected as City Vice-Mayor. By virtue of this office, he became
the Presiding Officer of the SPM and head of the Sanggunian Secretariat. To complement the
manpower requirements in the Sanggunian Secretariat, Vicencio deemed it necessary to hire the
services of new consultants. Thus, Vicencio entered into another consultancy service contract,
herein referred to as “2005 Consultancy Service Contract”. The SPM allocated the amount of Php
792,000 as budget for the consultancy services.

Later, the City Auditor’s Office issued an “Audit Observation Memorandum” (AOM), disallowing the
budget allocated for consultancy services for being an improper disbursement. As a result, a “Notice
of Disallowance” was issued. Vice-Mayor Vicencio, the City Accountant and the payees were held
liable for the hiring of the new consultants. Aggrieved by the disallowance, Vicencio appealed to the
Adjudication and Settlement Board (ASB) of the Commission on Audit (COA), but it was denied.
Hence, the present petition alleging that the COA committed grave abuse of discretion in affirming
the disallowance of disbursement for the services of the consultants.

In its Comment, the COA averred that Ordinance No. 15-2003 specifically authorized the
expenditure of funds for the compensation of consultants only from June to December 2003. Thus,
the contracts for consultancy entered into in 2005 were contrary to the ordinance cited and were
therefore void for being unauthorized and bereft of any legal basis

ISSUE: Whether the Commission on Audit committed a grave abuse of discretion in

performing its function

RULING: NO. The COA's assailed Decision was made in faithful compliance with its mandate and in
judicious exercise of its general audit power as conferred on it by the Constitution. The COA was
merely fulfilling its mandate in observing the policy that government funds and property should be
fully protected and conserved; and that irregular, unnecessary, excessive or extravagant
expenditures or uses of such funds and property should be prevented. Thus, no grave abuse of
discretion may be imputed to the COA.