July 16, 1996

COA DECISION NO. 1996-362

RE : Request of the Office of the Government Corporate Counsel (OGCC) Lawyers for
Reconsideration on the Disallowance of Payment of Honoraria or Incentive Pay Granted
in Connection with the Cases Handled for and in Behalf of the Metropolitan
Waterworks and Sewerage System (MWSS)

DECISION

Records show that then Metropolitan Waterworks and Sewerage System (MWSS) Administrator Teofilo I.
Asuncion endorsed the handling of several MWSS administrative cases to the Office of the Government
Corporate Counsel (OGCC) in two letters, both dated October 11, 1993. Acting thereon, Government
Corporate Counsel (GCC) Oscar I. Garcia issued Office Order No. 113 dated October 20, 1993, creating an
Investigation Committee composed of Assistant Government Corporate Counsel (AGCC) Antonio M.
Brillantes as Presiding Officer and State Corporate Attorney (SCA) Cyril R. Regalado as member. Again, in a
letter dated May 3, 1994, the MWSS Administrator endorsed to the OGCC the handling of the case PII vs.
MWSS, a damage suit filed against MWSS before the Construction Industry Arbitration Commission. For this
purpose, GCC Oscar I. Garcia appointed SCA Rolando Q. Japson as Special Counsel of MWSS in a letter dated
November 7, 1994 to the MWSS Administrator. Such appointment was in addition to his regular duties as a
regular counsel of the Philippine Heart Center, National Housing Authority, LWUA, PDEC and FTI. The same
letter also requested that SCA Japson be afforded by MWSS a P5,000.00 monthly allowance, retroactive to
May 3, 1994, to defray his transportation and other incidental expenses in attending the case. Another letter
dated October 17, 1994, was received by the MWSS Administrator from the OGCC, requesting the
resumption of the grant of allowances which the MWSS had previously given to OGCC officials and
personnel but were discontinued after the passage of R.A. 6758.
The MWSS Administrator, in his letter dated November 14, 1994 to the MWSS Auditor, asked for comment
and/or recommendation on the aforesaid request since the grant of such benefits requires the
corresponding appropriation and disbursement of corporate funds. In reply, the Auditor in a 1st
Indorsement, dated November 29, 1994, reiterated his conclusion in an earlier Memorandum, dated October
25, 1994, that OGCC personnel may not be paid by MWSS any additional compensation because the
conditions stated in COA Decision No. 94-040, dated February 1, 1994, particularly, conditions 1 and 3, are
not present. The decision states, thus —
"For the proper grant of allowances, there must be three (3) concurring conditions sine qua non
under the above quoted provision of law, namely:
1. when the exigency of the service so requires;
2. that GCC approves the assignment or designation; and
3. that OGCC lawyers are assigned/designated to perform additional or special task in any of the
client corporations.
Here, even if OGCC lawyers are assigned to perform additional task in any of the client
corporations, they are not entitled to additional compensation if the exigency of the service does
not so require, that is, the additional task can be satisfactorily accomplished by regular employees
or lawyers of the client corporation. The same is true if such exigency ceases to exist. Conversely,
even if the exigency of the service so requires, still OGCC lawyers are not entitled to additional
compensation and privileges if the tasks they are performing are not special or additional tasks. In
other words, they are not entitled thereto if they are performing regular functions.
xxx xxx xxx
"OGCC is precisely tasked to be the principal law office of GOCCs and must be responsive to the legal
assistance needed by these client corporations. (P.D. 1445, Section 10 Chapter 3, Title III, Book IV.
E.O. No. 292). Without these client government corporations, OGCC has no task to perform, no
functions to exercise, no reason to justify the grant of salaries and allowances to its lawyers not only
from GOCCs but also from OGCC itself. Certainly, the rendition of legal assistance, in any form, to
these GOCCs cannot be taken out of the ambit of the regular functions of the OGCC.
"The very nature of the special or additional task as envisioned by Section 6 of E.O. No. 878 is that
they are not regular and the additional compensation cannot, therefore, be considered as regularly
given."
The Auditor further invited the attention of the MWSS Management to Section 10, Chapter 3, Title III, Book
IV of the 1987 Administrative Code which provides, thus —
"The OGCC is authorized to receive attorneys' fees adjudged in favor of their client . . . . These
attorneys' fees shall accrue to a Special Fund of the OGCC, and shall be deposited in an authorized
government depository as a trust liability and shall be made available without the need for a Cash
Disbursement Ceiling, . . . ."
Indeed, it is settled that OGCC lawyers rendering legal assistance to GOCCs are authorized to receive
additional compensation under Section 6 of Executive Order No. 878. It is, likewise, settled that strict
compliance of the three (3) concurring conditions enumerated in the aforequoted COA Decision, is
necessary for the proper grant of allowances to OGCC personnel. Hence, the only issue left for resolution is
whether or not the instant requests strictly complied with all the three (3) concurring conditions
whether or not the instant requests strictly complied with all the three (3) concurring conditions
aforementioned to warrant the reversal of the Auditor's adverse findings.
After a careful evaluation of the facts and circumstances obtaining, this Commission finds merit in the
requests of AGCC Antonio M. Brillantes, SCA Cyril R. Regalado and SCA Rolando Q. Japson.
Firstly, the determination as to whether or not the exigency of the service requires the delegation of specific
legal work to OGCC personnel is properly vested with the head of the agency (GOCC) who is in a better
position to know the existence of the exigency itself. The endorsements made by the MWSS Administrator
and the specific designations of AGCC Brillantes, SCA Regalado and SCA Japson by the Government
Corporate Counsel as embodied in OGCC Office Order No. 113, dated October 20, 1993, and in a letter to the
MWSS Administrator dated November 7, 1994, respectively, create a legal presumption as to the existence
of an exigency which, unless rebutted, deserves due credence and respect. The records do not show that
such legal presumption has been properly controverted. It bears emphasis, however, that the term
"exigency", by its very nature, is merely temporary. A fortiori, the grant of additional allowances ceases to
have a legal basis from the moment the exigency disappears, that is, upon the termination of the additional
or special tasks assigned in each particular case.
Premises considered, this Commission hereby grants the requests of AGCC Antonio M. Brillantes, SCA Cyril
R. Regalado and SCA Rolando Q. Japson for payment of honoraria by the MWSS covering the period of their
special assignments thereto. In regard to the request for resumption of the payment of allowances to other
OGCC lawyers assigned in the MWSS, the same cannot be granted unless there is a showing of proof that
the tasks being performed in the said agency are "special or additional" as required under COA Decision No.
94-040 dated February 1, 1994.
Quezon City, Philippines.

(SGD.) CELSO D. GAÑGAN

Chairman

(SGD.) ROGELIO B. ESPIRITU

Commissioner

(SGD.) SOFRONIO B. URSAL

Commissioner

Copy furnished:
The Auditor
MWSS
Balara, Quezon City
The Corporate Counsel
Office of the Government Corporate Counsel
Manila
The Administrator
MWSS
Balara, Quezon City