Arcena v. Commission on Audit, G.R. No. 227227, [February 9, 2021]

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Arcena v. Commission on Audit

 G.R. No. 227227, [February 9, 2021]

EN BANC, LOPEZ, M.V 

Immutability of Final Judgment; Petition for Review; Remedy against COA Decisions; Disallowances

 

As the duly authorized agency to adjudicate matters relating to the examination, audit, and settlement of all accounts of the government and its expenditures, the COA has acquired special knowledge and expertise in handling matters falling under its specialized jurisdiction. Hence, in the absence of grave abuse of discretion, the factual findings of the COA, which are duly supported by the evidence on record, must be accorded not only great respect but finality.

 

Between 1995 and 1996, the Philippine Marine Corps (PMAR) undertook infrastructure projects to relocate and replicate the Philippine Marine Headquarters from Fort Bonifacio, Makati City to the Marine Base in Ternate, Cavite (MBT projects), funded with P70 million. An audit revealed that expenditures for construction exceeded the actual plans by 2.33%, amounting to P1.6 million, with Arcena, as the proprietor of Berlyn Construction, held liable as the payee-contractor. Arcena's appeal to the COA Proper was dismissed for being filed out of time, as the exact date of receipt of the Notice of Disallowance (ND) was not specified. Arcena contends that the MBT projects were settled accounts and could not be revisited without violating Section 52 of PD No. 1445.

 

Whether or not the COA gravely abused its discretion in -- first, dismissing Arcena's petition for review due to timeliness; and, -- second, not ruling on the merits of Arcena's petition for review. 

NO. The COA did not commit grave abuse of discretion in both instance. Arcena failed to indicate the date of his receipt of the ND. This failure alone should have warranted the dismissal of the appeal. Under the rules, it is required that the petition must state the specific dates to show that it was filed within the prescribed period. The period from the receipt of the ND up to the time Arcena filed his appeal forms part of the six-month or 180-day period to appeal to the COA Proper. Consequently, Arcena's Petition for Review, whether filed on February 28, 2011 as alleged in the petition or on March 3, 2011 as held by the COA Proper, was filed out of time.

Even on the merits, however, the petition must still be dismissed. Section 52 of PD No. 1445 does not apply to transactions in the MBT Projects since the accounts are not yet settled. Jurisprudence has held that the issuance of an Audit Observation Memorandum (AOM) is just an initiatory step in the investigative audit to determine the propriety of disbursements made. It is the disallowance that becomes final and executory absent any motion for reconsideration or appeal. In case the ND is appealed, it is the decision on appeal that becomes final and executory that would settle the account. Contrary to Arcena's contention, the MBT Projects are not settled accounts at the time of the conduct of the audit made by the special audit team. 

Here, the audit team was fettered by the deficiency of disbursement vouchers and documentation. The COA arrived at the estimated cost and the reasonableness of the unit prices/costs by using data from the Construction Industry Authority of the Philippines, relevant Price Index published by the NSO, DPWH Cost Analysis Manuals and Association on Carriers and Equipment, Inc. (ACEL) Rates 1992. In the absence of grave abuse of discretion, the factual findings of the COA, which are duly supported by the evidence on record, must be accorded not only great respect but finality.

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