Commission on Audit of the Province of Cebu vs. Province of Cebu

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Updated 21st February 2025

This case involves the issue of whether the salaries and personnel-related benefits of public school teachers hired for extension classes, as well as college scholarship grants, can be charged to the Special Education Fund (SEF) of Cebu Province. The Supreme Court ruled that while the salaries and benefits of teachers for extension classes are chargeable to the SEF, expenses for college scholarships are not and must be charged to the province's General Fund.

Decided

29th November 2001

Division

En Banc

Ponente

YNARES-SANTIAGO, Consuelo

Case Nature

SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.

Case References

371 SCRA 196

422 Phil. 519

G.R. No. 141386

Full text word count

3,057

Full text read time est.

9-12 Mins

Full text sources

elibrary.judiciary.gov.ph

E-SCRA

Lawphil

PDF Document

Subjects

Statutory Construction

Case Title

THE COMMISSION ON AUDIT OF THE PROVINCE OF CEBU, Represented by Provincial Auditor ROY L. URSAL, petitioner, vs. PROVINCE OF CEBU, Represented by Governor PABLO P. GARCIA, respondent.

Dispositive

WHEREFORE, in view of all the foregoing, the Decision of the Regional Trial Court of Cebu City, Branch 20, in Civil Case No. CEB-24422, is AFFIRMED with MODIFICATION. The salaries and personnel-related benefits of the teachers appointed by the provincial school board of Cebu in connection with the establishment and maintenance of extension classes, are declared chargeable against the Special Education Fund of the province. However, the expenses incurred by the provincial government for the college scholarship grants should not be charged against the Special Education Fund, but against the General Funds of the province of Cebu.

Concur (14)

BELLOSILLO, Josue

CARPIO, Antonio

DAVIDE JR, Hilario

DE LEON JR, Sabino

KAPUNAN, Santiago

MELO, Jose

MENDOZA, Vicente V.

PANGANIBAN, Artemio

PARDO, Bernardo

PUNO, Reynato

QUISUMBING, Leonardo

SANDOVAL-GUTIERREZ, Angelina

VITUG, Jose

YNARES-SANTIAGO, Consuelo

On Leave (1)

BUENA, Arturo

Primary Holding

The Supreme Court held that salaries and personnel-related benefits of teachers appointed for extension classes may be charged to the SEF, but college scholarship expenses cannot.

Background

The case arose from Notices of Suspension issued by the Commission on Audit (COA) to Cebu Province after it charged teacher salaries and scholarship expenses to its SEF. The province filed a petition for declaratory relief with the Regional Trial Court (RTC), which ruled in favor of Cebu Province. COA elevated the case to the Supreme Court.

History

1998: COA audited Cebu Province’s accounts and issued Notices of Suspension for charging teacher salaries and scholarships to SEF.
1999: Cebu Province filed a petition for declaratory relief with RTC Cebu (Branch 20).
December 13, 1999: RTC ruled in favor of Cebu Province, declaring the questioned expenditures as authorized under SEF.
November 29, 2001: Supreme Court rendered its decision affirming RTC’s ruling with modification.

Facts

1. The Provincial Governor of Cebu appointed teachers to handle extension classes due to a lack of plantilla items in the Department of Education, Culture, and Sports (DECS).
2. Teacher salaries and benefits, as well as college scholarship grants, were charged to Cebu’s SEF.
3. COA issued Notices of Suspension, arguing these expenditures were not chargeable to SEF under existing laws.
4. Cebu Province filed a petition for declaratory relief seeking clarification on whether these expenditures were valid under SEF.

Arguments of the Petitioners

1. Invoked the principle expressio unius est exclusio alterius, asserting that since salaries, personnel-related benefits, and scholarships are not explicitly listed as lawful SEF expenditures under the Local Government Code (LGC), they should be excluded.
2. Argued that SEF should only cover operational and maintenance costs related to public schools, excluding personnel-related expenses which are primarily DECS responsibilities.

Arguments of the Respondents

1. Claimed that teacher salaries for extension classes fall under "establishment and maintenance" provisions in SEF-related laws.
2. Asserted that scholarships are aligned with educational objectives and should be chargeable to SEF.

Issues

1. Can teacher salaries and personnel-related benefits for extension classes be charged to SEF?
2. Can college scholarship grants be charged to SEF?

Ruling

1. Teacher Salaries and Benefits: The Court ruled these are chargeable to SEF as they are necessary for establishing and maintaining extension classes under Section 100(c) of LGC. Legislative intent supports this interpretation based on deliberations during LGC’s enactment.
2. Scholarship Grants: The Court ruled these cannot be charged to SEF because they are not explicitly authorized under Sections 100(c) or 272 of LGC. Scholarships must instead be funded through General Funds.

Doctrines

1. Expressio unius est exclusio alterius: Items not expressly included in a statute are deemed excluded unless necessary by implication. Scholarships were omitted from SEF-authorized expenditures in LGC.
2. Doctrine of Necessary Implication: Teacher compensation is impliedly included in "establishment and maintenance" provisions since it is indispensable for extension classes.

Precedents Cited

1. National Tobacco Administration v. COA (1999): On legislative intent as controlling in statutory construction.
2. Shell Company v. Municipality of Sipocot (1959): Declaratory relief remains valid even after breach if future applicability persists.

Statutory and Constitutional Provisions

1. Republic Act No. 5447: Establishing SEF purposes.
2. Sections 100(c), 235, 272, and 534(c) of Local Government Code: Governing SEF allocation.

Primary Holding Background History Facts Arguments of the Petitioners Arguments of the Respondents Issues Ruling Doctrines Key Excerpts Precedents Cited Provisions

Contents