G.R. No. 218870, November 24, 2020
THE COMMISSION ON AUDIT, ATTY. ELEANOR V. ECHANO, FELIZARDO B. TOQUERO, JR., TITA B. EMBESTRO, SUSIE S. LAUREANO, JOHANSON V. DISUANCO, AND ADELA A. TABUZO, PETITIONERS, VS. HON. ERWIN VIRGILIO R. FERRER, ACTING PRESIDING JUDGE OF THE REGIONAL TRIAL COURT, BRANCH 33, PILI, CAMARINES SUR, AND LUIS RAYMUND F. VILLAFUERTE, JR., FORMER GOVERNOR OF CAMARINES SUR, RESPONDENTS.

FACTS

During his term as Governor of Camarines Sur, private respondent Luis Raymund F. Villafuerte, Jr. approved various disbursements from 2006 to 2010. Upon audit, the Commission on Audit (COA) found deficiencies, including non-compliance with the Government Procurement Act and unnecessary expenditures. Consequently, COA auditors issued ten (10) Notices of Disallowance (NDs) against the provincial government’s transactions. Private respondent did not appeal these NDs within the reglementary period, leading COA to issue Notices of Finality of Decision (NFDs).
Instead of pursuing administrative remedies with COA, private respondent directly filed two petitions for certiorari and prohibition with the Regional Trial Court (RTC) of Pili, Camarines Sur, assailing the NFDs and seeking injunctive relief. The RTC issued a temporary restraining order and later a writ of preliminary injunction, enjoining the implementation of the NDs. Petitioners, the COA officials, moved to dismiss the petitions on grounds of lack of jurisdiction and failure to exhaust administrative remedies, but the RTC denied their motion.

ISSUE

Whether the Regional Trial Court correctly assumed jurisdiction over the petitions for certiorari and prohibition challenging the final Notices of Disallowance issued by the Commission on Audit.

RULING

No. The Supreme Court granted the petition, reversed the RTC Orders, and dismissed the cases before the RTC for lack of jurisdiction. The legal logic is anchored on the doctrine of exhaustion of administrative remedies and the constitutional mandate and specialized competence of the COA. The 1987 Constitution grants the COA, as the constitutional guardian of public funds, full authority to decide matters concerning government auditing. The Government Auditing Code of the Philippines and the 2009 Revised COA Rules of Procedure provide a complete administrative appellate hierarchy, from the Cluster Director to the Commission Proper.
Private respondent’s failure to appeal the NDs to the COA Commission Proper rendered the disallowances final and executory. Judicial intervention is premature unless all administrative remedies have been exhausted. The RTC, a court of general jurisdiction, cannot arrogate unto itself the power of review over final COA decisions, as this power is vested by law in the Supreme Court via a petition for certiorari under Rule 64 of the Rules of Court. The RTC’s assumption of jurisdiction and issuance of injunctive relief constituted grave abuse of discretion, as it undermined the finality of COA’s audit decisions and violated the settled principle that courts cannot interfere with the exercise of administrative discretion absent a clear showing of grave abuse. The proper recourse for an aggrieved party after exhausting COA’s administrative processes is to elevate the matter directly to the Supreme Court.