The Commission on Audit (COA) is not constitutionally mandated to conduct a pre-audit of all government transactions; the COA has the exclusive authority to define the scope of its audit and examination, and the conduct of pre-audit is discretionary, to be implemented when, for example, an agency's internal control system is inadequate.

The COA's approach to pre-audit has evolved over time. In 1982, COA Circular No. 82-195 lifted the pre-audit system with exceptions, emphasizing agency head responsibility. Following the 1986 EDSA Revolution and the discovery of financial anomalies, COA Circular No. 86-257 reinstated selective pre-audit. With political and governmental stabilization, COA Circular No. 89-299 was issued, again lifting the pre-audit for national government agencies (NGAs) and government-owned or -controlled corporations (GOCCs) to reaffirm managerial fiscal responsibility and accelerate public service delivery. Subsequent circulars (94-006 and 95-006) expanded the lifting of pre-audit to local government units (LGUs). COA Circular No. 89-299A allowed for the reinstitution of pre-audit under certain circumstances. Later, COA Circular No. 2009-002 reinstated selective pre-audit due to rising irregularities, which was then lifted again by COA Circular No. 2011-002.

• On October 26, 1982, the COA issued Circular No. 82-195, lifting the system of pre-audit of government financial transactions, with certain exceptions, emphasizing agency head responsibility for fiscal management.
• On March 31, 1986, after the EDSA Revolution uncovered financial irregularities, COA issued Circular No. 86-257, reinstating selective pre-audit as a temporary measure.
• With governmental normalization, COA issued Circular No. 89-299, the subject of this petition, which again lifted the pre-audit of government transactions for NGAs and GOCCs, aiming to reaffirm managerial fiscal responsibility and reduce bureaucratic red tape.
• COA Circular No. 89-299 mandated the installation of adequate internal control systems by government agencies and shifted COA's focus to post-audit activities.
• COA later issued Circular No. 94-006 (February 17, 1994) and Circular No. 95-006 (May 18, 1995), expanding the lifting of pre-audit to all financial transactions of NGAs, GOCCs, and LGUs.
• COA Circular No. 89-299, as amended by Circular No. 89-299A, Section 3.2, allowed COA to reinstitute pre-audit if an agency's internal control system was inadequate.
• On May 3, 2006, petitioner dela Llana wrote to COA regarding a Senate Committee recommendation for the Department of Agriculture to set up an internal pre-audit service. COA replied on July 18, 2006, referencing Circular No. 89-299 and Administrative Order No. 278 on strengthening internal control systems.
• On January 15, 2008, petitioner filed this Petition for Certiorari, alleging that lifting pre-audit via a circular is unconstitutional as pre-audit is a COA mandate under Article IX-D, Section 2 of the 1987 Constitution, and its absence led to irregularities like the P728-million fertilizer fund scam.
• During the pendency of the case, COA issued Circular No. 2009-002 (May 18, 2009) reinstating selective pre-audit, and later Circular No. 2011-002 (July 22, 2011) lifting it again, citing heightened agency vigilance.

• The pre-audit duty of the COA is a constitutional mandate enshrined in Section 2, Article IX-D of the 1987 Constitution and cannot be lifted by a mere circular.
• The lack of pre-audit by COA has led to serious irregularities in government transactions, such as the P728-million fertilizer fund scam and irregularities in the P550-million call center laboratory project of the Commission on Higher Education.
• Certiorari is the proper remedy under Section 7, Article IX-A of the 1987 Constitution, which allows any decision, order, or ruling of the Commission to be brought to the Supreme Court on certiorari.
• Petitioner has standing as a taxpayer because the issuance of Circular No. 89-299 has led to the dissipation of public funds.

• The Petition for Certiorari is improper because COA did not exercise judicial or quasi-judicial functions when it promulgated Circular No. 89-299; it was exercising its quasi-legislative or rule-making powers.
• There is no convincing explanation showing that the promulgation of the circular was done with grave abuse of discretion.
• The Petition is defective in form due to lack of discussion of material dates, no factual background, and failure to attach a certified true copy of the circular.
• COA Circular No. 89-299 is valid as the COA has the power under the 1987 Constitution to promulgate it.
• The Constitution does not mandate COA to conduct a pre-audit of all government transactions; it grants COA exclusive authority to define the scope of its audit and examination.

• Whether petitioner is entitled to the extraordinary writ of certiorari to annul COA Circular No. 89-299.
• Whether the conduct of pre-audit is a mandatory constitutional duty of the Commission on Audit.

• The Petition is dismissed.
• The Court acknowledged technical defects in the petition (failure to attach a certified true copy of the assailed Order and lack of statement of material dates) but opted to resolve the case on its merits due to the serious matters involved.
• Petitioner has standing as a taxpayer, as the claim involves alleged dissipation of public funds due to the lifting of pre-audit.
• Certiorari is not the proper remedy because COA Circular No. 89-299 was promulgated by COA under its quasi-legislative or rule-making powers, not its quasi-judicial capacity. Decisions reviewable by certiorari under Article IX-A, Section 7 of the Constitution refer to those rendered in a quasi-judicial capacity. Prohibition is also not appropriate as it lies against judicial or ministerial functions, not quasi-legislative functions.
• Despite the impropriety of the remedy, the Court proceeded to resolve the substantive issue due to public importance.
• The Constitution, specifically Article IX-D, Section 2, does not require COA to conduct a pre-audit of all government transactions for all government agencies. The provision mandates post-audit for certain entities and allows COA to adopt measures, including temporary or special pre-audit, only when the internal control system of an audited agency is inadequate.
• The COA has the exclusive authority under Article IX-D, Section 2(2) to define the scope of its audit and examination, establish techniques and methods, and promulgate accounting and auditing rules. This discretion allows COA to decide whether to conduct pre-audit.
• The language of the constitutional provision is clear and explicit, leaving no room for interpretation that pre-audit is a mandatory, across-the-board duty.

• Taxpayer's Standing — A taxpayer is deemed to have the standing to raise a constitutional issue when it is established that public funds from taxation have been disbursed in alleged contravention of the law or the Constitution. This was applied to grant petitioner standing, as he alleged that lifting pre-audit led to illegal use of public money.
• Propriety of Certiorari (Rule 65) — A petition for certiorari under Rule 65 is directed against a tribunal, board, or officer exercising judicial or quasi-judicial functions. This was applied to find that certiorari was not the proper remedy as COA Circular No. 89-299 was issued in COA's quasi-legislative capacity.
• Propriety of Prohibition — A petition for prohibition lies against judicial or ministerial functions, but not against legislative or quasi-legislative functions. This was mentioned to show that prohibition was also not an appropriate remedy.
• Review of Constitutional Commission Decisions (Art. IX-A, Sec. 7, Constitution) — Decisions, orders, or rulings of Constitutional Commissions reviewable by the Supreme Court on certiorari refer to those rendered in their quasi-judicial capacity. This was used to clarify that the challenged COA circular, being quasi-legislative, was not reviewable via this specific constitutional provision for certiorari.
• COA's Power to Define Scope of Audit (Art. IX-D, Sec. 2(2), Constitution) — The Commission on Audit has the exclusive authority to define the scope of its audit and examination, establish the techniques and methods required therefor, and promulgate accounting and auditing rules and regulations. This was the central doctrine used to uphold COA's discretion in lifting the general pre-audit, as the Constitution does not mandate pre-audit but gives COA the power to determine its audit methods.
• Plain Meaning Rule (Statutory/Constitutional Construction) — When the language of the law is clear and explicit, there is no room for interpretation, only application. This was applied to interpret Article IX-D, Section 2 of the Constitution, finding no explicit mandate for universal pre-audit by the COA.
• Hierarchy of Norms (Circular vs. Constitution) — While not explicitly named as a doctrine, the petitioner's argument rested on the premise that a constitutional duty cannot be lifted by a mere circular. The Court's ruling implicitly affirmed that if pre-audit were a constitutional mandate, a circular could not override it, but found no such mandate.
• Judicial Review of Acts of Constitutional Commissions — The Court, despite procedural infirmities, can review actions of constitutional bodies like COA when issues of public importance or alleged grave constitutional deficiencies are raised. This was invoked by the Court to decide the case on its merits.

• "Hence, the conduct of a pre-audit is not a mandatory duty that this Court may compel the COA to perform. This discretion on its part is in line with the constitutional pronouncement that the COA has the exclusive authority to define the scope of its audit and examination."
• "When the language of the law is clear and explicit, there is no room for interpretation, only application."
• "Rules of procedure were promulgated to provide guidelines for the orderly administration of justice, not to shackle the hand that dispenses it."

• Gonzales v. Narvasa — Cited for the principle of taxpayer's standing, where public funds are alleged to be disbursed in contravention of law or the Constitution.
• Uy v. Sandiganbayan — Also cited for the principle of taxpayer's standing.
• Delos Santos v. Court of Appeals — Cited for the requirements of a petition for certiorari under Rule 65, specifically that it is directed against a body exercising judicial or quasi-judicial functions.
• Ongsuco v. Malones — Cited for the definition and scope of a petition for prohibition.
• Holy Spirit Homeowners Association, Inc. v. Defensor — Cited for the rule that prohibition does not lie against legislative or quasi-legislative functions.
• Quinto v. Commission on Elections — Cited as an instance where the Court resolved petitions despite being an improper remedy due to the public importance of the issues, and for the principle that rules of procedure should not shackle the administration of justice.
• Equi-Asia Placement, Inc. v. Department of Foreign Affairs — Cited as an instance where the Court resolved petitions despite being an improper remedy due to the public importance of the issues.
• Yap v. Commission on Audit — Cited for affirming COA's broad powers over government accounts and its role as guardian of public funds under the Constitution.
• Olaguer v. Domingo — Cited for the COA's general audit power being a mechanism for the check and balance system in government.
• Villanueva v. Commission on Audit — Cited for the definition of pre-audit.
• Development Bank of the Philippines v. Commission on Audit — Cited within Villanueva for the definition of pre-audit.
• Mendoza v. COMELEC — Cited for the plain meaning rule in statutory/constitutional construction: when the law is clear, there is no room for interpretation, only application.

• 1987 Constitution, Article IX-D, Section 2 — This is the central constitutional provision discussed. Paragraph 1 outlines COA's power to audit accounts and provides for post-audit, and allows for temporary or special pre-audit if an agency's internal control is inadequate. Paragraph 2 grants COA exclusive authority to define the scope of its audit and promulgate auditing rules. Its interpretation was key to the ruling that pre-audit is not a mandatory COA duty.
• 1987 Constitution, Article IX-A, Section 7 — This provision states that decisions, orders, or rulings of Constitutional Commissions may be brought to the Supreme Court on certiorari. The Court clarified this refers to acts in a quasi-judicial capacity, not quasi-legislative acts like the issuance of COA Circular No. 89-299.
• Rules of Court, Rule 65, Section 1 (Certiorari) — This rule outlines the requirements for a petition for certiorari, which is directed against a tribunal, board, or officer exercising judicial or quasi-judicial functions. It was relevant in determining the propriety of the remedy availed by the petitioner.
• Government Auditing Code of the Philippines — Mentioned as embodying the concept that fiscal responsibility resides in management, which was a rationale for COA Circular No. 89-299.
• Administrative Order No. 278 (dated 8 June 1992) — Mentioned as directing the strengthening of internal control systems of government offices through the installation of an internal audit service (IAS), reinforcing the idea that internal controls are the primary responsibility of the agency.