Development Bank of the Philippines vs. Commission on Audit, G.R. No.

88435, January 16,

2002


G.R. No. 88435 January 16, 2002
DEVELOPMENT BANK OF THE PHILIPPINES, petitioner,
vs.
COMMISSION ON AUDIT, respondent

Facts: On May 13, 1987, after learning that the DBP had signed a contract with a private auditing firm for
calendar year 1986, the new COA Chairman wrote the DBP Chairman that the COA resident auditors were under
instructions to disallow any payment to the private auditor whose services were unconstitutional, illegal and unnecessary.
On July 1, 1987, the DBP Chairman sent to the COA Chairman a copy of the DBP's contract with Joaquin Cunanan& Co.,
signed four months earlier on March 5, 1987. The DBP Chairman's covering handwritten note sought the COA's
concurrence to the contract.
During the pendency of the DBP Chairman's note-request for concurrence, the DBP paid the billings of the private auditor
in the total amount of P487,321.14despite the objection of the COA. On October 30, 1987, the COA Chairman issued a
Memorandum disallowing the payments, and holding the following persons personally liable for such payment:

Issue: Whether or not public corporations under the jurisdiction of the COA employ private auditors.

Ruling:WHEREFORE, the petition is hereby GRANTED. The letter-decision of the Chairman of the Commission on Audit
dated August 29, 1988, and the letter-decision promulgated by the Commission on Audit en banc dated May 20, 1989, are
hereby SET ASIDE, and the temporary restraining order issued by the court enjoining respondent Commission on Audit
from enforcing the said decisions is hereby made PERMANENT.