#7 BOY SCOUTS OF THE PHILIPPINES, Petitioner, vs. COMMISSION ON AUDIT, Respondent. G.R. No.

177131 June 7, 2011 Facts: The COA issued a resolution in 1999 defining its policy with respect to the audit of the Boy Scouts of the Philippines (BSP), which was created as a public corporation, and that in BSP vs. NLRC, the SC ruled that the BSP, as constituted under its charter, was a GOCC within the meaning of Art. IX (B) (2) (1) of the Constitution, and that the BSP is regarded as a government instrumentality under the Administrative Code. For the purposes of audit supervision, the BSP shall be classified among the government corporations to be audited by employing the team audit approach. The BSP sought reconsideration of the COA Resolution in a letter signed by then BSP National President Jejomar C. Binay, saying that it is not subject to the COAs jurisdiction. The BSP contends that it is not a government-owned or controlled corporation; neither is it an instrumentality, agency, or subdivision of the government. Issue: Whether or not the Boy Scouts of the Philippines (BSP) fall under the jurisdiction of the Commission on Audit. Held: Yes. Art. XII, Sec. 16 bans the creation of private corporations by special law, but the said constitutional provision should not be construed so as to prohibit the creation of public corporations or a corporate agency or instrumentality of the government intended to serve a public interest or purpose. This should not be measured on the basis of economic viability, but according to the public interest or purpose it serves as envisioned by par. 2, Art. 44 of the Civil Code, and of the Administrative Code. The BSP is a public corporation or a government agency or instrumentality with juridical personality, which does not fall within the constitutional prohibition in Article XII, Section 16, notwithstanding the amendments to its charter. Not all corporations, which are not government owned or controlled, are ipso facto to be considered private corporations as there exists another distinct class of corporations or chartered institutions which are otherwise known as "public corporations." These corporations are treated by law as agencies or instrumentalities of the government which are not subject to the tests of ownership or control and economic viability but to different criteria relating to their public purposes/interests or constitutional policies and objectives and their administrative relationship to the government or any of its Departments or Offices. . As presently constituted, the BSP is a public corporation created by law for a public purpose, attached to the Department of Education Culture and Sports pursuant to its Charter and the Administrative Code of 1987. It is not a private corporation which is required to be owned or controlled by the government and be economically viable to justify its existence under a special law. The economic viability test would only apply if the corporation is engaged in some economic activity or business function for the government, which is not the case for BSP. Therefore, being a public corporation, the funds of the BSP fall under the jurisdiction of the Commission on Audit.