solicited PRIVATE funds of the metro manila film festival subject to audit by COA

The funds of the Executive Committee are considered public funds

The Executive Committee has two sources of funds:

1. The donations from the local government units comprising the Metropolitan Manila covering the period of holding the MMFF from December 25 to January 3; and
2. The non-tax revenues that come in the form of donations from private entities.^[34]

As a committee under MMDA, a public office, this Court finds that both sources of funds can properly be subject of COA's audit jurisdiction.

That the Executive Committee of the MMFF administers funds from the government is apparent in the following portion of Proclamation No. 1459:

The Executive Committee is authorized to engage in fund raising campaign among all sectors of society including the local governments concerned which may donate their amusement tax shares to the MOWELFUND during the period of the celebration to make it a success. x x x. (Emphasis ours)

Verily, if non-governmental entities maybe audited by the COA as long as its funds are partly coming from the government, with more reason should this principle apply to the Executive Committee.

As to the committee's funds coming from non-tax revenues, the fact that such funds come from purported private sources, do not convert the same to private funds. Such funds must be viewed with the public purpose for which it was solicited, which is the management of the MMFF. In Confederation of Coconut Farmers Organizations of the Philippines, Inc. (CCFOP) v. His Excellency President Benigno Simeon C. Aquino III, et al,^[35] reiterating this Court's ruling in Republic of the Philippines v. COCOFED^[36]:

Even if the money is allocated for a special purpose and raised by special means, it is still public in character. In the case before us, the funds were even used to organize and finance State offices. In Cocofed v. PCGG, the Court observed that certain agencies or enterprises "were organized and financed with revenues derived from coconut levies imposed under a succession of laws of the late dictatorship ... with deposed Ferdinand Marcos and his cronies as the suspected authors and chief beneficiaries of the resulting coconut industry monopoly. The Court continued: " .... It cannot be denied that the coconut industry is one of the major industries supporting the national economy. It is, therefore, the State's concern to make it a strong and secure source not only of the livelihood of a significant segment of the population, but also of export earnings the sustained growth of which is one of the imperatives of economic stability.(Emphasis ours)

In The Veterans Federation of the Phils. represented by Esmeraldo R. Acordo v. Hon. Reyes,^[37] this Court also declared as public funds contributions from affiliate organizations of the VFP:

x x x x. In the case at bar, some of the funds were raised by even more special means, as the contributions from affiliate organizations of the VFP can hardly be regarded as enforced contributions as to be considered taxes. They are more in the nature of donations which have always been recognized as a source of public funding.^[38]

Furthermore, despite the private source of funds, ownership over the same was already transmitted to the government by way of donation. As donee, the government had become the owner of the funds, with full ownership rights and control over the use and disposition of the same, subject only to applicable laws and COA rules and regulations. Thus, upon donation to the government, the funds became public in character.

This is in contrast to cases where there is no transfer of ownership over the funds from private parties to the government, such as in the case of cash deposits required in election protests filed before the trial courts, Commission on Elections, and electoral tribunals. In these cases, the government becomes a mere depositary of such fund, the use and disposition of which is subject to the conformity of the private party-depositor who remains to be the owner thereof.

Applying the principles enunciated in the aforesaid cases, and considering the purpose for which COA was created, this Court finds that any such funds, though coming from private sources, become public upon receipt by the Executive Committee, for use in the purpose for which it was created. For all intents and purposes, the Executive Committee, an office under the MMDA and created pursuant to Presidential Proclamation No. 1459, as donee, has already become the owner of the funds and may dispose of the same as it deems fit; thus, such funds are considered public funds. Being public in character, the COA can therefore validly conduct an audit over such funds in accordance with its auditing rules and regulations.

EN BANC

[ G.R. Nos. 237938 and 237944-45, December 04, 2018 ]

BAYANI F. FERNANDO, PETITIONER, V. THE COMMISSION ON AUDIT, RESPONDENT.