DOJ Opinion No. 140, s. 1983

DOJ OPINION NO. 140 , s. 1983 September 13, 1983 The President Revenue Information System Services, Inc. Rm. 409, BIR Building Diliman, Quezon City Metro Manila Sir : This refers to your request for opinion as to whether or not the Revenue Information Systems Services Inc. (RISSI) should be considered a government corporation and, if so, whether it is required to follow the rules of the Office of Compensation and Position Classification (OCPC) and the Commission on Audit (COA). You state that RISSI was incorporated under the Corporation Code of the Philippines and registered with the Securities and Exchange Commission in April, 1981, as a non-stock, non-profit corporation for the purpose of promoting and advancing computer technology in the Philippines including the training of computer professionals and technologists; that its incorporating members and trustees are officials of the Ministry of Finance (MOF) and Bureau of Internal Revenue (BIR); that the Chairman of the Board and President thereof are Prime Minister Cesar E. Virata and BIR Commissioner Ruben Ancheta, respectively; that it runs and operates like a private corporation and its employees are registered with the Social Security System; and that it performs purely computer system development for the BIR pursuant to an agreement. Your further state that on March 30, 1983, the Data Processing Center of the BIR was abolished and its data processing functions were contracted to RISSI pursuant to Executive Order No. 873. The queries are answered in accordance with the extended discussions set forth hereunder. I Executive Order No. 873 (Abolishing the Data Processing Center of the Bureau of Internal Revenue) was issued by the President pursuant to Presidential Decree No. 1416, as amended by Presidential Decree No. 1772. Executive Order No. 873 abolished the Data Processing Center of the BIR and directed that their activities be contracted to and performed by the Revenue Information Systems Services, Inc. (RISSI), which was described as a "wholly government-owned foundation" (See Section 1, 5th "Whereas" clause). It is, therefore, clearly a wholly-owned government foundation. II Anent the question whether RISSI is required to follow the position classification and compensation system prescribed by the OCPC, our answer is in the negative. In Opinion No. 62, s. 1976, this Office ruled that the coverage of the Civil Service as defined in Article XII-B, Section 1(1), of the Constitution only extends to employees of government-owned or controlled corporations created by special law (See also Op. Nos. 128 and 134, 1983). Also, the 4th "WHEREAS" clause of Executive Order No. 873 confirmed that the "long-range plan" to set up an efficient computer system "can be successfully implemented only by an entity which is allowed greater flexibility in hiring and promoting personnel, in providing a competitive compensation plan and in acquiring and disposing of computer equipment and supplies." Finally, Section 1 of the said Executive Order states "that priority in rehiring shall be given to BIR Data Processing Center personnel who may qualify for positions under RISSI-prescribed qualification and merit system". Clearly, the intention to exempt RISSI from OCPC coverage is evident. III Regarding the last question as to whether or not the transactions and expenditures of RISSI are subject to the usual auditing requirements and procedures prescribed by the COA, attention is invited to the following provisions of Presidential Decree No. 1445 (The General Auditing Code of the Philippines) which, insofar as pertinent, provides: "SECTION 2. Declaration of Policy . It is the declared policy of the State that all resources of the government shall be managed, expended or utilized in accordance with law and regulations, and safeguarded against loss or wastage through illegal or improper disposition, with a view to ensuring efficiency, economy and effectiveness in the operations of government. The responsibility to take care that such policy is faithfully adhered to rests directly with the Chief or head of the government agency concerned. " "SECTION 26. General jurisdiction . The powers of the Commission shall extend to and comprehend all matters relating to auditing procedures, systems and controls, the keeping of the general accounts of the Government, the preservation of vouchers pertaining thereto for a period of ten years, the examination and inspection of the books, records, and paper relating to those accounts, and the audit and settlement of the accounts of all persons respecting funds or property received or held by them in an accountable capacity, as well as the examination, audit, and settlement of all debts and claims of any sort due from or owing to the Government or any of its subdivisions, agencies and instrumentalities. The said jurisdiction extends to all government-owned or controlled corporations, including their subsidiaries, and other self-governing boards, commissions, or agencies of the Government, and as herein prescribed, including non-governmental entities subsidized by the government, those funded by donations through the government share, and those for which the government has put up a counterpart fund or those partly funded by the government." LexLib While we stated in Opinion No. 134, s. 1983, that as a general proposition, COA jurisdiction covers government corporations created by special law, we have also previously cautioned that our perception of the extent of the limits of COA jurisdiction cannot bind the said office, which is an independent constitutional body. (Op. No. 128, s. 1983) Please be guided accordingly. Very truly yours, (SGD.) RICARDO C. PUNO Minister of Justice