JUDGE DADOLE VS COA

FACTS: In 1986, the RTC and MTC judges of Mandaue City started receiving
monthly allowances through the yearly appropriation ordinance enacted by the
Sangguniang Panlungsod of the said city. In 1991, Mandaue City increased the
amount to P1,500 for each judge.
On March 15, 1994, the Department of Budget and Management (DBM) issued the
disputed Local Budget Circular No. 55 (LBC 55) which provided that such additional
allowances in the form of honorarium at rates shall be granted but it shall not
exceed P1,000.00 in provinces and cities and P700.00 in municipalities subject to
the following conditions:
a) That the grant is not mandatory on the part of the LGUs;
b) That all contractual and statutory obligations of the LGU including the
implementation of R.A. 6758 shall have been fully provided in the budget;
c) That the budgetary requirements/limitations under Section 324 and 325 of R.A.
7160 should be satisfied and/or complied with; and
d) That the LGU has fully implemented the devolution of functions/personnel in
accordance with R.A. 7160.3" (italics supplied)
Acting on the DBM directive, the Mandaue City Auditor issued notices of
disallowance to petitioners. Beginning October, 1994, the additional monthly
allowances of the petitioner judges were reduced to P1,000 each. They were also
asked to reimburse the amount they received in excess of P1,000 from April to
September, 1994. The petitioner judges filed with the Office of the City Auditor a
protest against the notices of disallowance. But the City Auditor treated the protest
as a motion for reconsideration and indorsed the same to the COA Regional Office
No. 7. In turn, the COA Regional Office referred the motion to the head office with a
recommendation that the same be denied.
On November 27, 1995, Executive Judge Mercedes Gozo-Dadole, for and in behalf of
the petitioner judges, filed a motion for reconsideration of the decision of the COA.
In a resolution dated May 28, 1996, the COA denied the motion. Hence, this petition.
Petitioner judges argue that LBC 55 is void for infringing on the local autonomy of
Mandaue City. They also maintain that said circular is not supported by any law and
therefore goes beyond the supervisory powers of the President. Respondent COA,
on the other hand, insists that the constitutional and statutory authority of a city
government to provide allowances to judges stationed therein is not absolute.
Congress may set limitations on the exercise of autonomy. It is for the President,
through the DBM, to check whether these legislative limitations are being followed
by the local government units.

ISSUE: Whether LBC 55 of the DBM is void for going beyond the supervisory powers
of the President
HELD: The petitioners contention is meritorious. Section 4 of Article X of the 1987
Philippine Constitution provides that The President of the Philippines shall exercise
general supervision over local governments. This provision has been interpreted
to exclude the power of control. It was emphasized that the two terms -- supervision
and control -- differed in meaning and extent. The Court distinguished them as
follows:
"x x x In administrative law, supervision means overseeing or the power or authority
of an officer to see that subordinate officers perform their duties. If the latter fail or
neglect to fulfill them, the former may take such action or step as prescribed by law
to make them perform their duties. Control, on the other hand, means the power of
an officer to alter or modify or nullify or set aside what a subordinate officer ha[s]
done in the performance of his duties and to substitute the judgment of the former
for that of the latter."ii 6
In Taule v. Santos,iii 7 we further stated that the Chief Executive wielded no more
authority than that of checking whether local governments or their officials were
performing their duties as provided by the fundamental law and by statutes. He
cannot interfere with local governments, so long as they act within the scope of
their authority. "Supervisory power, when contrasted with control, is the power of
mere oversight over an inferior body; it does not include any restraining authority
over such body,"iv 8 we said.
In a more recent case, Drilon v. Lim,v 9 the difference between control and
supervision was further delineated. Officers in control lay down the rules in the
performance or accomplishment of an act. If these rules are not followed, they may,
in their discretion, order the act undone or redone by their subordinates or even
decide to do it themselves. On the other hand, supervision does not cover such
authority. Supervising officials merely see to it that the rules are followed, but they
themselves do not lay down such rules, nor do they have the discretion to modify or
replace them. If the rules are not observed, they may order the work done or
redone, but only to conform to such rules. They may not prescribe their own manner
of execution of the act. They have no discretion on this matter except to see to it
that the rules are followed.
By constitutional fiat, local government units are subject to the President's
supervision only, not control, so long as their acts are exercised within the sphere of
their legitimate powers. By the same token, the President may not withhold or alter
any authority or power given them by the Constitution and the law.
Clearly then, the President can only interfere in the affairs and activities of a local
government unit if he or she finds that the latter has acted contrary to law. Hence,
the President or any of his or her alter egos cannot interfere in local affairs as long

as the concerned local government unit acts within the parameters of the law and
the Constitution.
It was then held that LBC 55 went beyond the law it seeks to implement.
LBC 55 provides that the additional monthly allowances to be given by a local
government unit should not exceedP1,000 in provinces and cities and P700 in
municipalities. Section 458, par. (a)(1)(xi), of RA 7160, the law that supposedly
serves as the legal basis of LBC 55, allows the grant of additional allowances to
judges "when the finances of the city government allow." The said provision does
not authorize setting a definite maximum limit to the additional allowances granted
to judges. Setting a uniform amount for the grant of additional allowances is an
inappropriate way of enforcing the criterion found in Section 458, par. (a)(1)(xi), of
RA 7160. The DBM over-stepped its power of supervision over local government
units by imposing a prohibition that did not correspond with the law it sought to
implement. In other words, the prohibitory nature of the circular had no legal basis.
WHEREFORE, the petition is hereby GRANTED, and the assailed decision and
resolution, dated September 21, 1995 and May 28, 1996, respectively, of the
Commission on Audit are hereby set aside.