G.R. No. 230818 , February 14, 2023
EFRAIM C. GENUINO, PETITIONER, VS. COMMISSION ON AUDIT, ET AL., RESPONDENTS. [G.R. No. 244540] RENE C. FIGUEROA, PETITIONER, VS. COMMISSION ON AUDIT, RESPONDENT.

FACTS

The consolidated cases involve Notice of Disallowance No. 2013-002 (10) dated February 20, 2013, disallowing the amount of PHP 2,000,000.00 granted by the Philippine Amusement and Gaming Corporation (PAGCOR) as financial assistance to the Pleasant Village Subdivision. A central legal question is the continuing immunity of PAGCOR funds from the Commission on Audit’s (COA) audit jurisdiction pursuant to Section 15 of Presidential Decree No. 1869 (PD 1869). This provision limited the funds of PAGCOR subject to audit to “the 5% franchise tax and the 50% of the gross earnings pertaining to the Government as its share.” PAGCOR is a government-owned and controlled corporation (GOCC).

ISSUE

Whether Section 15 of PD 1869, which limits the audit of PAGCOR funds to only its franchise tax and the government’s share of its earnings, remains operative and consistent with the audit powers and jurisdiction granted to the Commission on Audit under the 1987 Constitution .

RULING

The Concurring and Dissenting Opinion of Justice Lazaro-Javier agrees with the ponencia’s ruling to revisit and overturn the precedent in Genuino. The opinion holds that Section 15 of PD 1869 is no longer operative as it is inconsistent with the 1987 Constitution . The constitutional provisions repealed or rendered void the statutory audit limitation. The 1987 Constitution , specifically Section 2(1), Article IX-D, empowers and obligates COA to examine, audit, and settle “all accounts pertaining to the revenue and receipts of, and expenditures or uses of funds and property” owned or held by the Government, its subdivisions, agencies, or instrumentalities, including GOCCs with original charters like PAGCOR. Furthermore, Section 3, Article IX-D explicitly states that “No law shall be passed exempting any entity of the Government or its subsidiary… from the jurisdiction of the Commission on Audit.” This constitutional mandate did away with any immunity from COA’s audit jurisdiction. Consequently, all funds of PAGCOR, as a GOCC, are public in character and subject to the full audit jurisdiction of COA, without distinction as to the type of funds. The inconsistency between the constitutional grant of power and the statutory limitation is resolved by the repealing clause in Section 3, Article XVIII of the Constitution , which allows only existing laws “not inconsistent with this Constitution” to remain operative.