Feliciano - v - COA

Facts:
1.       A Special Audit Team from COA Regional Office No. 8 audited the accounts of Leyte Metropolitan Water District (LMWD). 
2.       LMWD received a letter from COA requesting payment of auditing fees. 
3.       As General Manager of LMWD, petitioner sent a reply informing COAs Regional Director that the water district could not pay the auditing fees. Basis:
a.        Sections 6 and 20 of Presidential Decree 198
b.       Section 18 of Republic Act No. 6758
4.       The Regional Director referred petitioners reply to the COA Chairman.
5.       Petitioner wrote COA through the Regional Director asking for refund of all auditing fees LMWD previously paid to COA.
6.       Petitioner received COA Chairman Gangans Resolution denying his requests. Petitioner filed a MR which COA denied.
7.       Hence, petitioner filed this instant petition. 

Issue: WON Local Water District (LWD) created under PD 198, as amended, is a GOCC subject to the audit jurisdiction of COA.

Held: Petition lacks merit.
-          The Constitution and existing laws mandate COA to audit all government agencies, including government-owned and controlled corporations (GOCCs) with original charters. 
-          Petitioner seeks for a re-examination of a doctrine culminating in Davao City Water District v. CSC; maintains that LWDs are not GOCCs with original charters but rather private corporations. What PD 198 created was the Local Waters Utilities Administration (LWUA) and not the LWDs. Thus, PD 198 is not an original charter that would place LWDs within the audit jurisdiction of COA.
-          The Constitution recognizes 2 classes of corporations a) private corporations created under a general law and b) GOCCs created by special charters. 
-          The Constitution emphatically prohibits the creation of private corporations except by a general law applicable to all citizens. Purpose: to ban private corporations created by special charters, which historically gave certain individuals, families or groups special privileges denied to other citizens.
-          The Constitution authorizes Congress to create GOCCs through special charters. 
-          LWDs are not private corporations because they are not created under the Corporation Code. Petitioners are not created under the said code, but on the contrary, they were created pursuant to a special law and are governed primarily by its provision. Section 6 of PD 198 provides that LWDs shall exercise the powers, rights and privileges given to private corporations under existing laws. PD 198 constitutes the special enabling charter of LWDs. LWDs are GOCCs with a special charter.
-          Petitioner argues that one special law cannot serve as enabling law for several GOCCs but only for one GOCC. Section 16, Article 12 of the Constitution mandates that Congress shall not, except by general law, provide for the creation of private corporations.
-          The rationale behind the prohibition on private corporations having special charters does not apply to GOCCs. Danger will not exist whether one special law creates one GOCC, or one special enabling law creates several GOCCs. Congress may create GOCCs either by special charters specific to each GOCC, or by one special enabling charter applicable to a class of GOCCs, like PD 198 which applies only to LWDs.
-          The Constitution vests in the COA audit jurisdiction over GOCCs with original charters, and GOCCs without original charters. GOCCs with original charters are subject to COA pre-audit, while GOCCs without original charters are subject to COA post-audit. 
-          GOCCs without original charters refer to corporations created under the Corporation Code but are owned or controlled by the government. The nature or purpose of the corporation is not material in determining COAs audit jurisdiction. Neither is the manner of creation of a corporation, whether under a general or special law. The determining factor of COAs audit jurisdiction is government ownership or control of the corporation. 
-          Government owns and controls LWDs. There is no private party involved as co-owner in the creation of an LWD. Just prior to the creation of LWDs, the national or local government owns and controls all their assets. PD 198 is bereft of any indication that the transfer is to privatize the operation and control of water systems. The government controls LWDs because under PD 198 the municipal or city mayor, or the provincial governor, appoints all the board directors of an LWD for a fixed term of 6 years. The board directors of LWDs are not co-owners of the LWDs. LWDs have no private stockholders or members. The board directors and other personnel of LWDs are government employees subject to civil service laws and anti-graft laws.
-          If LWDs are neither GOCCs with original charters nor GOCCs without original charters, then they would fall under the term agencies or instrumentalities of the government and thus still subject to COAs audit jurisdiction. 
-          Petitioner argues that PD 198 expressly prohibits COA auditors, or any government auditor for that matter, from auditing LWDs. PD 198 cannot prevail over the Constitution. Section 3, Article IX-C of the Constitution outlaws any scheme or devise to escape COAs audit jurisdiction.

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