G.R. No. 247924 , November 16, 2021
POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT (PSALM) CORPORATION, REPRESENTED BY IRENE JOY BESIDO-GARCIA, IN HER CAPACITY AS PRESIDENT AND CHIEF EXECUTIVE OFFICER OF PSALM, AND IN BEHALF OF THE CONCERNED AND AFFECTED OFFICERS AND EMPLOYEES OF PSALM, PETITIONER, VS. COMMISSION ON AUDIT, RESPONDENT.

FACTS

This case involves a Concurring and Dissenting Opinion by Justice Leonen. The petitioner, Power Sector Assets and Liabilities Management (PSALM) Corporation, sought the written concurrence of the Commission on Audit (COA) to engage private legal counsel. COA delayed resolving this request and later denied it due to the lack of its written concurrence. Justice Leonen opines that COA committed grave abuse of discretion in this process. The legal framework governing the hiring of private lawyers by government-owned and controlled corporations (GOCCs) is anchored on COA Circular No. 86-255, as amended, and Office of the President Memorandum Circular No. 9 (1998). These rules generally prohibit GOCCs from hiring private lawyers and require them to refer legal matters to the Office of the Government Corporate Counsel (OGCC). An exception is allowed if hiring a private lawyer “cannot be avoided” or under “extraordinary or exceptional circumstances.” To avail of this exception, a GOCC must first secure: (1) the written conformity and acquiescence of the Government Corporate Counsel or the Solicitor General, and (2) the written concurrence of COA. The purpose of the COA’s written concurrence is to check the reasonableness of the rates for the legal services.

ISSUE

Whether the Commission on Audit committed grave abuse of discretion in delaying the resolution of, and subsequently denying, PSALM Corporation’s request for written concurrence to engage private legal counsel.

RULING

Justice Leonen, in his Concurring and Dissenting Opinion, rules that the Commission on Audit committed grave abuse of discretion. He emphasizes that COA’s written concurrence under Circular No. 86-255 is a specific requirement distinct from a general pre-audit, aimed solely at determining the reasonableness of the private counsel’s rates. He notes that at the time PSALM sought concurrence in May 2011, pre-audit by COA was still an allowed procedure. By delaying its action and later denying the request based on the lack of its own written concurrence—a requirement PSALM was actively seeking to fulfill—COA acted in a manner that constitutes grave abuse of discretion. The opinion underscores that COA’s broad audit powers must be exercised within the bounds of its specific rules and the circumstances of each case.