NEA v COA

NationalElectrificationAdministrationv.CommissiononAudit NationalElectrificationAdministration,petitionerv.CommissiononAudit,respondent

Doctrine:TheBran Doctrine :TheBranchesofGovern chesofGovernment;Execut ment;ExecutiveDepartment; iveDepartment;Powersand PowersandFunctionsof Functionsofthe the President;ControlofEx President;ControlofExecutiveDepar ecutiveDepartments* tments* Nature:SpecialCivilActionintheSupremeCourt.Certiorari. Nature :SpecialCivilActionintheSupremeCourt.Certiorari. Date:2002 Date:2002 Ponente:Carpio,J. Ponente:Carpio,J. Facts: Facts: Governmentemployeesalaries Governmentemployeesalarieswereraised wereraisedviaaJoint viaaJointResolutionof ResolutionofCongress(No. Congress(No.01),urgingthe 01),urgingthe Presidenttorevisethe Presidenttorevisetheexistingcompen existingcompensation.This sation.Thiswasmadeinto wasmadeintoa4-yearpr a4-yearprogram.On28 ogram.On28 December1996,PresidentRamos December1996,PresidentRamosissuesExecuti issuesExecutiveOrderNo. veOrderNo.389(EO389)to 389(EO389)toimplementthe implementthefinal final yearsalaryincreasesa yearsalaryincreasesauthorizedbyt uthorizedbytheJointR heJointResolution.EO esolution.EO389calledf 389calledfora2-tran ora2-tranche(or2-par che(or2-part) t) salaryincrease:oneon salaryincrease:oneon1January 1January1997,andanot 1997,andanotheron1Nove heron1November1997. mber1997. InJanuary1997,petitione InJanuary1997,petitionerNEAimplemen rNEAimplementedthesal tedthesalaryincrease aryincreases.However,th s.However,theyimplements eyimplementsuch uch increaseinasingle increaseinasinglelumpsumbeginn lumpsumbeginning1Januar ing1January1997(NEAacc y1997(NEAacceleratedthe eleratedtheimplementation implementationby by payingthesecondtranche payingthesecondtranchestarting1 starting1Januaryinst Januaryinsteadof1Novembe eadof1November).Respondent r).RespondentCOAissueda COAissueda NoticeofSuspensionandNot NoticeofSuspensionandNoticesofDisal icesofDisallowance.The lowance.TheNoticesofD NoticesofDisallowance isallowancewereappeale wereappealedby dby NEA,butrejectedbytheCommissionenbanc.Thedecisi .Thedecisionofthe onoftherespondentwas respondentwasthenchal thenchallenged lenged enbanc intheSupremeCourt. Issues: Issues: DidtheCOAcommitagravea DidtheCOAcommitagraveabuseofdiscre buseofdiscretionamounting tionamountingtolackor tolackorexcessofj excessofjurisdictionin urisdictionin disallowingtheincrease disallowingtheincreasedsalaries? dsalaries?Inother Inotherwords,isNEA words,isNEAallowedto allowedtoaccelerate acceleratetheimplementa theimplementation tion ofthesalariesduetoavailabilityoffunds? Held: Held: No,COAdidnotcommitany No,COAdidnotcommitanygraveabuseof graveabuseofdiscretion. discretion.Neitheris NeitherisNEAallowe NEAallowedtoacceler dtoacceleratethe atethe implementation. Thepetitionwasdismissedfor Thepetitionwasdismissedforlackof lackofmerit.COA’s merit.COA’sdecisionwasa decisionwasaffirmed ffirmedintoto. intoto. Ratio: Ratio: OnNEA’sacceleratedimplementationanditsaccordancewiththelaw. TheCourtruledthatsuchaccelerationwasnotinaccordancewiththelaw.NEAclaimedthat RepublicActNo.8250(Gen RepublicActNo.8250(GeneralAppropriat eralAppropriationsActof ionsActof1997)wasthe 1997)wastheirlegalb irlegalbasis.However, asis.However,such such lawwasnotself-executory. BudgetaryappropriationsundertheGAAdonotconstitute unbridledauthoritytogovernmentagenciestospendtheappropriatedamountsasthey wish. ItemizationofthePersona ItemizationofthePersonalServices lServices(theappropriati (theappropriationusedby onusedbyNEA)isprepare NEA)isprepared dafter  after the the enactmentoftheGAA, enactmentoftheGAA,andrequire andrequirestheapproval stheapprovalofthePre ofthePresident(Sec. sident(Sec.23,Chap.4, 23,Chap.4,BookIVof BookIVofthe the AdministrativeCode,p.229). AdministrativeCode,p.229).Theexecution TheexecutionoftheG oftheGAAissubjec AAissubjecttoaprogra ttoaprogramofexpendit mofexpendituretobe uretobe approvedbythePresident,whichwillbethebasisforthefundrelease(Sec.34,Chap.5,BookIVof theAdministrativeCode,p.229).

NoportionoftheappropriationsintheGAAshallbeusedforpaymentofanysalaryincrease,unless authorizedbylaw(Sec.60,Chap.7,BookVIoftheAdministrativeCode,p.230).Sec.33ofthe1997 GAA(p.230)alsoprovidesforsalaryincreasessubjecttotheapprovalofthePresident . Inessence,themereapprovalofCongressoftheGAAdoesnotmakethefundsavailablefor spendinginstantly.Thefundsmuststillbecollectedduringthefiscalyear. NEAalsoargues,fromSec.10ofEO389(p.231)thatadequatelyfundedgovernment-ownedor controlledcorporations(GOCCs)areexempted.TheCourtrejectedthisargument,asSec.10only referstoGOCCswithinsufficientfunds.ThereisnothingintheSectionthatallowsthosewith sufficientfundstoacceleratetheirschedule.ThereisnoexpressorimpliedauthorizationinSec.10. NEAalsoarguesthatsuchaccelerationwasallowedinaMemorandumoftheOfficeofthePresident (7November1995,p.232).However,theCourtpointedoutthattheacceleratedimplementationis alsoalloweduponapprovaloftheDepartmentofBudgetandManagement(DBM).Therearealso ninetermsandconditions,whichmustbemetbytheagency(listedinpp.233-234,althoughthey arenotnecessary).NEAdidnotcomplybyseekingapprovalfromtheDBM. TheCourtalsopointedoutthatthepetitionercannotassailtheauthorityofthePresidenttoissue EO389.TheAdministrativeCodegivesthePresidentsuchpowers(p.234).JointResolutionNo.01 hasalsoacknowledgedsuchauthority(p.235).Consideringalsothatitisthefourthandfinalyear, theCourtfounditoddthatNEAdidnotquestionthepreviousEOs. NEAalsoarguedthatCOAdidnothavethepowerindeterminingwhetherNEAviolatedthelaw. COAexceededitsauthorityinitsinquiry.NEAcitedGuevarav.Gimenez .However,theSupreme CourtoverturnedthisdecisionwithCaltexPhilippines,Inc.v.CommissiononAudit ,statingthat Guevarawasnotcontrollinganymore,asitwasdecidedinlightofthe1935Constitution.The1987 ConstitutiongivestheCommissionmorepowers,asprovidedinSec.2(D),Art.IX(p.237).The ConstitutionandotherlawsmandatetheCommissiontoauditallgovernmentagencies,including GOCCs. OntheDBM’sapprovalofNEA’sproposedbudget. NEAalsocontendsthattheDBM’sapprovalofNEA’sproposedbudgetwasanapprovalalsoofthe acceleratedimplementation.ThiswasbecauseNEAincludedsuchacceleratedimplementationinits proposal.TheCourtagainreferredtothenineconditionsrequiredofthemfortheapprovalto actuallytakeplace.Infact,theapprovaloftheproposedbudgetwasonlyapartofthefirstphaseof theentirebudgetprocess.(Therearefourphases:BudgetPreparation,BudgetAuthorization, BudgetExecution,andBudgetAccountability). OncetheproposedbudgetwasapprovedbytheDBM,itissubmittedtoCongressforevaluationand inclusionintheappropriationslaw.Thisauthorizationdoesnotincludetheauthorityto disburse. *OnthePresident’scontrolofallexecutivedepartments. TheCourtfinallycitedthecontrolofthePresidentoverallexecutivedepartments,bureaus,and offices,asprovidedbyoursystemofgovernment.Sec.17,Art.VIIofthe1987Constitutionprovides forthis(p.239).AccordingtotheCourt:“Thepresidentialpowerofcontrolovertheexecutive branchofgovernmentextendstoallexecutiveemployeesfromCabinetSecretarytothe lowliestclerk.”Thispowerisself-executinganddoesnotrequirestatutoryimplementation .It cannotbelimitednorwithdrawnbyCongress.

Allotherexecutiveofficialsmustimplementingoodfaithhisdirectivesandorders.Thecasewould nothavearisenhadNEAcompliedingoodfaithwiththedirectivesandordersofthePresident. NEA’sreasonsindisregardingthePresidentwerepatentlyflimsy,evenill-conceived. (Noseparateconcurringordissentingopinions.)