G.R. No. 195390, December 10, 2014
GOV. LUIS RAYMUND F. VILLAFUERTE, JR., and the PROVINCE OF CAMARINES SUR, Petitioners, vs. HON. JESSE M. ROBREDO, in his capacity as Secretary of the Department of the Interior and Local Government, Respondent.

FACTS

Petitioners, former Governor Luis Raymund F. Villafuerte, Jr. and the Province of Camarines Sur, filed a petition for certiorari and prohibition seeking to annul three Memorandum Circulars (MCs) issued by then DILG Secretary Jesse M. Robredo: (1) MC No. 2010-83 (August 31, 2010) on full disclosure of local budget, finances, bids, and public offerings; (2) MC No. 2010-138 (December 2, 2010) on the use of the 20% component of the annual Internal Revenue Allotment (IRA) shares; and (3) MC No. 2011-08 (January 13, 2011) on strict adherence to Section 90 of the General Appropriations Act of 2011. The petitioners assailed the issuances as unconstitutional and issued with grave abuse of discretion. The antecedent facts show that a 1995 COA report revealed that a substantial portion of the 20% development fund of some LGUs was diverted to Maintenance and Other Operating Expenses (MOOE), violating the Local Government Code (LGC). Consequently, the DILG had previously issued guidelines on the utilization of the development fund. The assailed MCs were issued to promote transparency, accountability, and proper use of the 20% IRA for development projects, with MC No. 2010-83 mandating the posting of detailed financial documents and MC No. 2010-138 listing expenses for which the 20% fund must not be utilized.

ISSUE

Whether the DILG Secretary committed grave abuse of discretion in issuing the assailed Memorandum Circulars.

RULING

The Supreme Court DISMISSED the petition. The Court ruled that the DILG Secretary did not commit grave abuse of discretion. The assailed MCs were issued pursuant to the DILG’s constitutional and statutory mandate of supervision over local government units. The power of supervision includes the authority to issue rules and regulations to ensure that local government acts are consistent with law. The MCs were valid exercises of this supervisory power, designed to ensure compliance with existing laws like the Local Government Code and the Government Procurement Reform Act, and to promote transparency and accountability in the use of public funds, particularly the 20% IRA development fund. The Court found that the issuances were reasonable directives to implement the law and did not constitute a usurpation of local autonomy. The petition failed to substantiate the claim of grave abuse of discretion.