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Case Digest

This case involves a special audit initiated by the Commission on Audit (COA) of coconut end-user companies, including the petitioners, regarding their Coconut Consumers Stabilization Fund levy collections and subsidies received. The COA Chairman directed the petitioners to pay short levies and overpaid subsidies. The petitioners argue they are outside the COA's audit powers. However, the Constitution allows the COA to audit private entities that handle government funds. Considering the specialized nature of the dispute and the COA's expertise, the Court applies the principle of primary jurisdiction to defer to the COA's determination in the first instance.

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Sharmila Abiera
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Topics covered

  • Government Auditors,
  • Subsidy Claims,
  • Legal Framework,
  • Legal Authority,
  • Audit Findings,
  • Government Accountability Mech…,
  • Audit Compliance,
  • Grave Abuse of Discretion,
  • Audit Reports,
  • Performance Audit
113 views3 pages

Case Digest

This case involves a special audit initiated by the Commission on Audit (COA) of coconut end-user companies, including the petitioners, regarding their Coconut Consumers Stabilization Fund levy collections and subsidies received. The COA Chairman directed the petitioners to pay short levies and overpaid subsidies. The petitioners argue they are outside the COA's audit powers. However, the Constitution allows the COA to audit private entities that handle government funds. Considering the specialized nature of the dispute and the COA's expertise, the Court applies the principle of primary jurisdiction to defer to the COA's determination in the first instance.

Uploaded by

Sharmila Abiera
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Topics covered

  • Government Auditors,
  • Subsidy Claims,
  • Legal Framework,
  • Legal Authority,
  • Audit Findings,
  • Government Accountability Mech…,
  • Audit Compliance,
  • Grave Abuse of Discretion,
  • Audit Reports,
  • Performance Audit

Blue Bar Coconut Philippines v.

Tantuico
G.R. No. L-47051
July 29, 1988

Facts:

Sometime in 1976, the respondent Acting Chairman of the Commission on Audit

initiated a special audit of coconut end-user companies, which include herein

petitioners, with respect to their Coconut Consumers Stabilization Fund levy collections

and the subsidies they had received.

As a result of the initial findings of the Performance Audit Office with respect only

to the petitioners, respondent Acting COA Chairman directed the Chairman, the

Administrator, and the Military Supervisor of PCA and the Manager of the Coconut

Consumers Stabilization Fund, in various letters to them (Annexes G-2 H, I, J, L and N

of petition) to collect the short levies and overpaid subsidies, and to apply subsidy

claims to the settlement of short levies should the petitioners fail to remit the amount

due.

Issues:

Whether or not the respondent COA Chairman may disregard the PCA rules and

decisions has become moot.

Ruling:

In the case at bar, the petitioners have failed to show that acts were done with

grave abuse of discretion amounting to lack of jurisdiction. Case dismissed.


Petitioners contend that they are outside the ambit of respondents' "audit" power

which is confined to government-owned or controlled corporations.

Section 2 (1) of Article IX-D of the Constitution provides that "The Commission on

Audit shall have the power, authority and duty to examine, audit, and settle all accounts

pertaining to the revenues and receipts of, and expenditures or uses of funds and

property, owned or held in trust by or pertaining to, the Government, or any of its

subdivisions, agencies or instrumentalities, including government-owned or controlled

corporation with original charters, and on a post-audit basis. ... (d) such non-

governmental entities receiving subsidy or equity directly or indirectly from or through

the Government which are required by law or the granting institution to submit to such

audit as a condition of subsidy or equity." The Constitution formally embodies the long

established rule that private entities who handle government funds or subsidies in trust

may be examined or audited in their handling of said funds by government auditors. In

view of the above considerations, we apply the principle of primary jurisdiction:

In cases involving specialized disputes, the trend has been to refer the

same to an administrative agency of special competence. As early as 1954, the

Court in Pambujan Sur United Mine Workers v. Samar Mining Co., Inc. (94 Phil.

932,941), held that under the sense-making and expeditious doctrine of primary

jurisdiction ... the courts cannot or will not determine a controversy involving a

question which is within the jurisdiction of an administrative tribunal prior to the

decision of that question by the administrative tribunal, where the question

demands the exercise of sound administrative discretion requiring the special

knowledge, experience, and services of the administrative tribunal to determine


technical and intricate matters of fact, and a uniformity of ruling is essential to

comply with the Purposes of the regulatory statute administered." Recently, this

Court specaking thru Mr. Chief Justice Claudio Teehankee said that "In this era

of clogged court dockets, the need for specialized administrative boards or

commissions with the special knowledge, experience and capability to hear and

determine promptly disputes on technical matters or essentially factual matters,

subject to judicial review in case of grave abuse of discretion, has become well-

nigh indispensable." The court reminds us that the legal presumption is that

official duty has been duly performed.

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