Jimmie Jan Alforque

Quisumbing vs. Gov. Garcia

G.R. No. 175527, December 8, 2008, EN BANC (TINGA, J.)

Prior authorization by the sanggunian concerned is required before the local

chief executive may enter into contracts on behalf of the local government unit.

FACTS
Gabriel Luis Quisumbing (Quisumbing), Estrella P. Yapha, Victoria G.
Corominas, and Raul D. Bacaltos (Bacaltos), collectively petitioners, assail the
Decision of the RTC of Cebu City, which declared that under the pertinent provisions
of the Local Government Code, and the Government Procurement Reform Act,
respondent Cebu Provincial Governor Gwendolyn F. Garcia (Gov. Garcia), need not
secure the prior authorization of the Sangguniang Panlalawigan before entering into
contracts committing the province to monetary obligations.

The Commission on Audit (COA) conducted a financial audit on the Province of Cebu
for the period ending December 2004. Its audit team rendered a report, Part II of
which states: "Several contracts in the total amount of P102,092,841.47 were not
supported with a Sangguniang Panlalawigan resolution authorizing the Provincial
Governor to enter into a contract, as required under Section 22 of R.A. No. 7160."

Alleging that the infrastructure contracts subject of the audit report complied
with the bidding procedures provided under R.A. No. 9184 and were entered into
pursuant to the general and/or supplemental appropriation ordinances passed by the
Sangguniang Panlalawigan, Gov. Garcia alleged that a separate authority to enter
into such contracts was no longer necessary.

ISSUE:

Whether or not prior approval by the Sangguniang Panlalawigan was required

before Gov. Garcia could have validly entered into the questioned contracts

HELD:

As it clearly appears from the foregoing provision, prior authorization by the

sanggunian concerned is required before the local chief executive may enter into
contracts on behalf of the local government unit.

Sec. 306 of R.A. No. 7160 read in conjunction with Sec. 346, Sec. 306 authorizes
the local chief executive to make disbursements of funds in accordance with the
ordinance authorizing the annual or supplemental appropriations. The "ordinance"
referred to in Sec. 346 pertains to that which enacts the local government unit’s
budget, for which reason no further authorization from the local council is required,
the ordinance functioning, as it does, as the legislative authorization of the budget.

To construe Sections 306 and 346 of R.A. No. 7160 as exceptions to Sec. 22(c)
would render the requirement of prior sanggunian authorization superfluous, useless
and irrelevant. There would be no instance when such prior authorization would be
required, as in contracts involving the disbursement of appropriated funds. Yet, this
is obviously not the effect Congress had in mind when it required, as a condition to
the local chief executive’s representation of the local government unit in business
transactions, the prior authorization of the sanggunian concerned. The requirement
was deliberately added as a measure of check and balance, to temper the authority of
the local chief executive, and in recognition of the fact that the corporate powers of
the local government unit are wielded as much by its chief executive as by its council.

The fact that the Province of Cebu operated under a reenacted budget in 2004
lent a complexion to this case which the trial court did not apprehend. Sec. 323 of
R.A. No. 7160 provides that in case of a reenacted budget, "only the annual
appropriations for salaries and wages of existing positions, statutory and contractual
obligations, and essential operating expenses authorized in the annual and
supplemental budgets for the preceding year shall be deemed reenacted and
disbursement of funds shall be in accordance therewith."