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YAP vs.

COA
[155 SCRA 618(2010)]

AUTHOR: Valera
NOTE:

Leonardo de Castro
FACTS:
BACKGROUND:

Yap is a holder of a regular position of Department Manager of the National Development Company(NDC), a GOCC
with an original charter.
He was appointed as VP for finance by the BoD of Manila Gas Corporation which is a subsidy of NDC (While
Remaining as a regular employee of NDC
The additional employment entitled him to an honoraria equivalent to 50% of his basic salary at NDC along with
various allowances
In its regular audit the Corporate Auditor of MGC disallowed several items of his benefits and allowances on the
ground that Yaps Appointment to MGC in addition to his regular position in NDC and the subsequent receipt of the
allowances and reimbursements from MGC are contrary to Sec 7(2) and Section 8 of Art IX-b of the constitution
which state that unless otherwise allowed by law or primary functions of his position no appointive official shall
hold any other office or employment in the Govt or any subdivision, agency or instrumentality thereof including
GOCC. No elective or appointive public officer or employee shall receive additional double or indirect
compensation unless specifically authorized by law.
The following are the disallowances:
- Subscription to Nat geo and Readers digest
- Car Maintenance allowance
- Annual fee of his VISA CARD
- Representation expenses on a SUNDAY
- Fellowship with PCA members on a Sunday,
- Monthly allowances
- Executive Checkup
- Gasoline allowance and drivers subsidy

Petitioners contentions:
- All benefits in question were all approved by the MGC BoD
- States that his assignment to MGC was required by the primary functions of his office and was also authorized by
EO 284.
- The act of the COAin subjecting the salaries, benefits and allowances of MGC employees to the public purpose
test is wrong since they are intended to compensate the employees for services performed on behalf of the
corporation.
- The act of the COA amending the ground of double compensation as a basis for the questioned disallowance on
the ground that the allowances did not meet the test of the public purpose requirement
Respondents Contentions:
- Characterized the disallowed allowances and reimbursements as prohibited by the constitution
- The said allowances and reimbursements failed to pass the test of public purpose requirement of the law.
- Not enough that payments made to him be authorized by the Bod but likewise necessary that said payments do
not contravene the principles provided for under Sec 4 of PD 1445 on the use of govt funds which states that it
could only be used solely for public purpose.
- Stated that the disallowed allowances have no connection to social services or promotion of general welfare,
ISSUE(S):
1.) COA committed grave abuse of discretion amounting to lack of jurisdiction in subjecting the salaries, benefits and
allowances to the public purpose test?

2.) COA committed grave abuse of discretion amounting to lack of jurisdiction in affirming the disallowances on a
ground different from the ground relied by the MGC auditor?
3.) COA committed grave abuse of discretion amount to lack of jurisdiction in disallowing the said allowances and
benefits
HELD:
1.) No.
2.) No.
3.) No.
RATIO: PETITION DISMISSED
1.) The public purpose requirement, the disbursement of public funds, salaries and benefits, of govt officers and
employees should be granted to compensate them for valuable public services rendered in the same vein additional
allowances and benefits must be shown to be necessary or relevant to the fulfillment of the official duties and
functions of the govt officers
2.) COA is endowed with enough latitude to determine prevent and disallow irregular, unnecessary, excessive
extravagant or unconscionable expenditures of govt funds.
- COA is not required to limit its review only to the grounds relied upon by a govt agencys auditor, in consonance
with its general audit power, COA is not merely legally permitted but is also duty bound to make its own
assessment of the merits of the disallowed disbursement and not simply restrict itself to reviewing the validity of
the ground relied upon by the auditor of the GOCC.
3.) Certain allowances are enjoyed by corporate officers in the private sector does not justify the grant of the same
benefits to similarly designated govt officers even if they are officers of GOCCs which perform proprietary
functions,
- The funds of the GOCC are still public funds and still under the audit of COA.
- The public purpose requirement for the disbursement of public funds is a valid limitation on the types of
allowances and benefits that may be granted to public officers
- It was require that YAP to show that his allowance and benefits were authorized by law and that there was a direct
and substantial relationship between the performance of duties and the grant of the disputed allowances.
Subscription to newspapers and magazines by govt offices may be justified, but Yaps personal subscriptions
and the annual fee of his credit card cannot be considered as part of the benefits as a public official
N evidence that the purported representation and fellowship expenses on weekends are necessary and related
to Yaps work as VP of finance.
Medical expenses such as an executive checkup may be justified if authorized by the appropriate laws. Yap
failed to point to the existence of such law or regulation applicable to his case and it appears that he already
receives medical benefits from the NDC
The COAs disallowance of the car maintenance , gasoline allowance and drivers subsidy was like was in
order since Yap neither proved that these benefits were also authorized by law or regulation
It was insufficient for Yap to assert that the allowances and benefits were approved by the BoD of MGC
4.) It is general policy of the court to sustain the decisions of the Admin agency especially one that was
constitutionally created not only on the basis of the doctrine of separation of powers but also their presumed
expertise in the laws they are entrusted to enforce. Thus only when the COA acted without or in excess of
jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction may this Court entertain
a petition for certiorari.
CASE LAW/ DOCTRINE:
DISSENTING/CONCURRING OPINION(S):