G.R. No. 141386 . November 29, 2001.
THE COMMISSION ON AUDIT OF THE PROVINCE OF CEBU, Represented by Provincial Auditor ROY L. URSAL, petitioner, vs. PROVINCE OF CEBU, Represented by Governor PABLO P. GARCIA, respondent.

FACTS

The Province of Cebu, through its Governor as Chairman of the Local School Board, appointed public school teachers to handle extension classes. The salaries and benefits of these teachers, along with expenses for college scholarship grants, were charged against the provincial Special Education Fund (SEF). The Commission on Audit (COA) issued Notices of Suspension, contending these disbursements were not authorized charges against the SEF.
Consequently, the Province filed a petition for declaratory relief with the Regional Trial Court. The trial court ruled in favor of the Province, declaring the expenses for teachers’ salaries and scholarship grants as valid charges against the SEF. COA elevated the case to the Supreme Court via a petition for review.

ISSUE

May the salaries of teachers for extension classes and expenses for college scholarship grants be charged to the Special Education Fund?

RULING

Yes, for teachers’ salaries; No, for college scholarship grants. The Court affirmed the trial court’s decision with modification. The legal logic hinges on statutory construction regarding the permissible uses of the SEF. Republic Act No. 5447 , which created the SEF, explicitly authorized its use for “the organization and operation of… extension classes, including the creation of positions of classroom teachers.” This specific authorization was not repealed by the Local Government Code of 1991. The Code’s general provision (Section 272) stating that SEF proceeds shall be allocated for “operation and maintenance of public schools” must be read in harmony with the more specific, extant provisions of R.A. 5447. Under the rule of statutory construction, a special law (R.A. 5447) is not deemed repealed by a general law (the LGC) unless the intent to repeal is clear and manifest. No such intent was shown. Therefore, salaries for teachers in extension classes are chargeable to the SEF.
However, for college scholarship grants, R.A. 5447 only authorized SEF expenditure for “the granting of government scholarships to poor but deserving students under Republic Act Numbered Four Thousand Ninety.” R.A. 4090 pertained to elementary and secondary education scholarships. Since the Province’s college scholarship program fell outside the scope of R.A. 4090, its expenses could not be charged to the SEF and must be sourced from the province’s general fund.