FACTS: The Boy Scouts of the Philippines (BSP) questions via Rule 65 of the 1997 Rules of Court the jurisdiction of the Commission on Audit (COA) over the BSP. BSP seeks that the COA be prohibited from implementing its June 18, 2002 Decision, its February 21, 2007 Resolution, as well as all other issuances arising therefrom, and that all of the foregoing be rendered null and void.
The COA maintains that the functions of the BSP which include, among others, the teaching to the youth of patriotism, courage, self-reliance, and kindred virtues, are undeniably sovereign functions enshrined under the Constitution. The COA contends that any attempt to classify the BSP as a private corporation would be incomprehensible since no less than the law which created it had designated it as a public corporation and its statutory mandate embraces performance of sovereign functions. Moreover, it claims that BSP is an agency of the government; and that the BSP is a chartered institution under Section 1(12) of the Revised Administrative Code of 1987, embraced under the term government instrumentality. The COA concludes that being a government agency, the funds and property owned or held by the BSP are subject to the audit authority of the COA pursuant to Section 2(1), Article IX (D) of the 1987 Constitution.
The BSP maintains that the provisions of Republic Act No. 7278 suggest that “governance of BSP has come to be overwhelmingly a private affair or nature, with government participation restricted to the seat of the Secretary of Education, Culture and Sports. To summarize its other arguments, 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 the BSP falls under the COA’s audit jurisdiction.
RULING: Yes. While the BSP may be seen to be a mixed type of entity, combining aspects of both public and private entities, we believe that considering the character of its purposes and its functions, the statutory designation of the BSP as “a public corporation” and the substantial participation of the Government in the selection of members of the National Executive Board of the BSP, the BSP, as presently constituted under its charter, is a government-controlled corporation within the meaning of Article IX (B) (2) (1) of the Constitution.
“Government instrumentality” is in turn defined in the 1987 Administrative Code in the following manner:
Instrumentality – refers to any agency of the National Government, not integrated within the department framework, vested with special functions or jurisdiction by law, endowed with some if not all corporate powers, administering special funds, and enjoying operational autonomy usually through a charter. This term includes regulatory agencies, chartered institutions and government-owned or controlled corporations.
We believe that the BSP is appropriately regarded as “a government instrumentality” under the 1987 Administrative Code.
It thus appears that the BSP may be regarded as both a “government controlled corporation with an original charter” and as an “instrumentality” of the Government within the meaning of Article IX (B) (2) (1) of the Constitution
As presently constituted, the BSP still remains an instrumentality of the national government. It is a public corporation created by law for a public purpose, attached to the DECS 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.
Since the BSP, under its amended charter, continues to be a public corporation or a government instrumentality, we come to the inevitable conclusion that it is subject to the exercise by the COA of its audit jurisdiction in the manner consistent with the provisions of the BSP Charter.
