7/27/2019 Boy Scouts of the Philippines vs CA

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#7 BOY SCOUTS OF THE PHILIPPINES,Petitioner,vs.

COMMISSION ON AUDIT,Respondent.G.R. No. 177131

June 7, 2011

Facts: The COA issued a resolution in 1999 defining its policy with respect to the audit of the Boy Scouts

of the Philippines (BSP), which was created as a public corporation, and that in BSP vs. NLRC, the SC

ruled that the BSP, as constituted under its charter, was a GOCC within the meaning of Art. IX (B) (2) (1)

of the Constitution, and that the BSP is regarded as a government instrumentality under the

Administrative Code. For the purposes of audit supervision, the BSP shall be classified among the

government corporations to be audited by employing the team audit approach. The BSP sought

reconsideration of the COA Resolution in a letter signed by then BSP National President Jejomar C.

Binay, saying that it is not subject to the COAs jurisdiction. The BSP contends that it is not a

government-owned or controlled corporation; neither is it an instrumentality, agency, or subdivision of

the government.

Issue: Whether or not the Boy Scouts of the Philippines (BSP) fall under the jurisdiction of theCommission on Audit.

Held: Yes.

Art. XII, Sec. 16 bans the creation of private corporations by special law, but the said constitutional

provision should not be construed so as to prohibit the creation of public corporations or a corporate

agency or instrumentality of the government intended to serve a public interest or purpose. This should

not be measured on the basis of economic viability, but according to the public interest or purpose it

serves as envisioned by par. 2, Art. 44 of the Civil Code, and of the Administrative Code.

The BSP is a public corporation or a government agency or instrumentality with juridicalpersonality, which does not fall within the constitutional prohibition in Article XII, Section 16,

notwithstanding the amendments to its charter. Not all corporations, which are not government owned

or controlled, are ipso facto to be considered private corporations as there exists another distinct class

of corporations or chartered institutions which are otherwise known as "public corporations." These

corporations are treated by law as agencies or instrumentalities of the government which are not

subject to the tests of ownership or control and economic viability but to different criteria relating to

their public purposes/interests or constitutional policies and objectives and their administrative

relationship to the government or any of its Departments or Offices. .

As presently constituted, the BSP is a public corporation created by law for a public purpose,

attached to the Department of Education Culture and Sports pursuant to its Charter and the

Administrative Code of 1987. It is not a private corporation which is required to be owned or controlled

by the government and be economically viable to justify its existence under a special law. The

economic viability test would only apply if the corporation is engaged in some economic activity or

business function for the government, which is not the case for BSP. Therefore, being a public

corporation, the funds of the BSP fall under the jurisdiction of the Commission on Audit.