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De la Llana vs COA

Def: Taxpayer’s Suit; A taxpayer is deemed to have the standing to raise a constitutional issue when it is established that public
funds from taxation have been disbursed in alleged contravention of the law or the Constitution.

“Commission on Audit (COA); The 1987 Constitution has made the Commission on Audit (COA) the guardian of public funds. The
conduct of a pre-audit is not a mandatory duty that this Court may compel the Commission on Audit (COA) to perform.”

Facts:

On Oct. 1982, the COA issued a Circular lifting the system of pre-audit of the government
financial transactions. After the change in administration due to Feb. 1986 revolution, grave
irregularities and anomalies in the government’s transactions were uncovered. Hence, on March
1986, the COA issued another circular which re-instated the pre-audit of selected government
transactions. The selective pre-audit was perceived to be an effective, although, temporary,
remedy against the said anomalies.
Two years later, COA issued another circular which lifted the pre-audit as in its assessment,
subsequent developments had shown heightened vigilance of government agencies in
safeguarding their resources.
Thus, this petition pursuant to Section 7, Article IX-D of the 1987 Constitution seeking to annul
and set aside Commission on Audit (COA) Circular lifting pre-audit. As a taxpayer, petitioner
alleged that pre-audit duty on the part of the COA cannot be lifted by a mere circular,
considering that pre-audit is a constitutional mandate enshrined in Section 2 of Article IX-D of
the 1987 Constitution and claims that the lack thereof, serious irregularities in the gov’t
transactions have been committed.
On Oct. 1982, the COA issued a Circular lifting the system of pre-audit of the government
financial transactions. After the change in administration due to Feb. 1986 revolution, grave
irregularities and anomalies in the government’s transactions were uncovered. Hence, on March
1986, the COA issued another circular which re-instated the pre-audit of selected government
transactions. The selective pre-audit was perceived to be an effective, although, temporary,
remedy against the said anomalies.
Two years later, COA issued another circular which lifted the pre-audit as in its assessment,
subsequent developments had shown heightened vigilance of government agencies in
safeguarding their resources.
Thus, this petition pursuant to Section 7, Article IX-D of the 1987 Constitution seeking to annul
and set aside Commission on Audit (COA) Circular lifting pre-audit. As a taxpayer, petitioner
alleged that pre-audit duty on the part of the COA cannot be lifted by a mere circular,
considering that pre-audit is a constitutional mandate enshrined in Section 2 of Article IX-D of
the 1987 Constitution and claims that the lack thereof, serious irregularities in the gov’t
transactions have been committed.
De la Llana v. Chairperson, COA- 665 SCRA 176 [2012]

Facts:
On Oct. 1982, the COA issued a Circular lifting the system of pre-audit of the government
financial transactions. After the change in administration due to Feb. 1986 revolution, grave
irregularities and anomalies in the government’s transactions were uncovered. Hence, on March
1986, the COA issued another circular which re-instated the pre-audit of selected government
transactions. The selective pre-audit was perceived to be an effective, although, temporary,
remedy against the said anomalies.
Two years later, COA issued another circular which lifted the pre-audit as in its assessment,
subsequent developments had shown heightened vigilance of government agencies in
safeguarding their resources.
Thus, this petition pursuant to Section 7, Article IX-D of the 1987 Constitution seeking to annul
and set aside Commission on Audit (COA) Circular lifting pre-audit. As a taxpayer, petitioner
alleged that pre-audit duty on the part of the COA cannot be lifted by a mere circular,
considering that pre-audit is a constitutional mandate enshrined in Section 2 of Article IX-D of
the 1987 Constitution and claims that the lack thereof, serious irregularities in the gov’t
transactions have been committed.
De la Llana v. Chairperson, COA- 665 SCRA 176 [2012]

Facts:
On Oct. 1982, the COA issued a Circular lifting the system of pre-audit of the government
financial transactions. After the change in administration due to Feb. 1986 revolution, grave
irregularities and anomalies in the government’s transactions were uncovered. Hence, on March
1986, the COA issued another circular which re-instated the pre-audit of selected government
transactions. The selective pre-audit was perceived to be an effective, although, temporary,
remedy against the said anomalies.
Two years later, COA issued another circular which lifted the pre-audit as in its assessment,
subsequent developments had shown heightened vigilance of government agencies in
safeguarding their resources.
Thus, this petition pursuant to Section 7, Article IX-D of the 1987 Constitution seeking to annul
and set aside Commission on Audit (COA) Circular lifting pre-audit. As a taxpayer, petitioner
alleged that pre-audit duty on the part of the COA cannot be lifted by a mere circular,
considering that pre-audit is a constitutional mandate enshrined in Section 2 of Article IX-D of
the 1987 Constitution and claims that the lack thereof, serious irregularities in the gov’t
transactions have been committed.
 On October 26, 1982, the COA issued Circular No. 82-195, lifting the system of pre-audit of government financial
transactions, albeit with certain exceptions.
 After the change in administration due to the February 1986 revolution, grave irregularities and anomalies in the
government’s financial transactions were uncovered.
 On March 31, 1986, the COA issued Circular No. 86-257, which reinstated the pre-audit of selected government
transactions. The selective pre-audit was perceived to be an effective, although temporary, remedy against the said
anomalies.
 Two years later, or on July 22, 2011, COA issued Circular No. 2011-002, which lifted the pre-audit of government
transactions implemented by Circular No. 2009002. In its assessment, subsequent developments had shown
heightened vigilance of
government agencies in safeguarding their resources.
 Petitioner filed this Petition as a taxpayer’s suit for Certiorari under Rule 65. He alleges that the pre-audit duty on the
part of the COA cannot be lifted by a mere circular, considering that pre-audit is a constitutional mandate enshrined in
Section 2 of Article IX-D of the 1987 Constitution. He further claims that, because of the lack of pre-audit by COA,
serious irregularities in government transactions have been committed.

Issue:

W/N is it the constitutional duty of COA to conduct pre-audit before the consummation of government transactions

Held:

No. It is not a constitutional duty of the COA to conduct a pre-audit. The Petitioner’s allegations find no support in Sec 2 of Art 9
(D) of the 1987 Constitution. In the said provision, it did not mention that it requires COA to conduct a pre-audit of all
government transactions and for all government agencies. The only clear reference to pre-audit requirements is found in Sec 2
(1) which provides that a post-audit is mandated for certain government or private entities with state subsidy or equity and only
when internal control system is inadequate. In such situations, the COA may adopt measures, including temporary or special
pre-audit, to correct the deficiencies.

The condition of pre-audit is not a mandatory duty that this court may compel the COA to perform. The COA has the exclusive
authority to define the scope of its audit and examination.