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 case involves the audit jurisdiction of the Commission on Audit (COA) over the funds of the Philippine Amusement and Gaming Corporation (PAGCOR). PAGCOR was created under Presidential Decree No. 1067-A and later governed by Presidential Decree No. 1869, which consolidated its charter. Section 15 of P.D. No. 1869 expressly limited governmental audit of PAGCOR’s funds to the determination of the 5% franchise tax and the 50% government share of gross earnings. The COA disallowed a PHP 2,000,000.00 financial assistance granted by PAGCOR to the Pleasant Village Homeowners Association for a flood control and drainage system project. Petitioners, PAGCOR officers, challenged the disallowance.

ISSUE

Whether the limitation on COA’s audit jurisdiction over PAGCOR funds under Section 15 of P.D. No. 1869 is valid and operative after the adoption of the 1987 Constitution .

RULING

No. The limitation under Section 15 of P.D. No. 1869 is repugnant to and impliedly repealed by the 1987 Constitution . Article IX-D, Sections 2 and 3 of the Constitution provides for an extensive scope of audit by COA, covering all accounts pertaining to revenue, receipts, expenditures, and uses of funds and property of the government, its subdivisions, agencies, instrumentalities, and government-owned or controlled corporations (GOCCs). PAGCOR is a GOCC, and thus, all its funds, regardless of source, are subject to COA’s audit jurisdiction without limitation. The revenues derived by PAGCOR from its operations are public in nature or affected with public interest. The ponencia’s affirmance of the disallowance was concurred with, as the petitioners failed to prove the project’s beneficial effect to the public.