Leony was engaged in the construction business under the name of LCE Construction. Among the works awarded to LCE were the river widening projects of the National Irrigation Administration (NIA) in the province of Leyte from "station 16 + 400 to 16 + 900". The arrangement was that contractors with the lowest bid were assigned to work on specific sections without formal contracts. It was only when the works are completed to NIA’s satisfaction that the requisite contract and other pertinent documents are prepared by NIA so that the contractor can collect payment.
In the case of Leony his first billing of P227,165.90 was paid by NIA. However, his second and final billing of P259,154.01 was denied on the ground that the work done on the right side of the river was not accomplished. Leony repeatedly followed up his billings with NIA but to no avail. Finally, unable to collect from NIA, Leony instituted a complaint for collection of money with damages and attorney’s fees with the Regional Trial Court (RTC) against NIA, its Administrator and Assistant Administrator in their personal capacities. NIA and co-defendants asked for the dismissal of the complaint on the ground of non-exhaustion of administrative remedies. They said that Leony should have filed his complaint first before the Commission on Audit (COA) prior to instituting a complaint for collection of sum of money with the RTC. Was NIA correct?
Yes. COA, as one of the three independent constitutional commissions, is specifically vested with the power, authority and duty to examine, audit and settle all accounts pertaining to the revenue and receipts of, and expenditures or uses of funds and property owned or held in trust by the government, or any of its subdivisions, agencies or instrumentalities. To ensure the effective discharge of its functions, COA has been empowered, subject to the limitations imposed by Article IX (d) of the Constitution, to define the scope of its audit and examination and establish the techniques and methods required therefore, and promulgate accounting and auditing rules and regulations including those for the prevention and disallowance of irregular, unnecessary, excessive, extravagant or unconscionable expenditures or uses of government funds and properties.
In this case, when determining the regularity of disbursement of public funds by NIA for the alleged services rendered by Leony from station 16 + 400 to 16 + 900 of the river, the accounting and auditing principles, rules and regulations set by COA must be taken into consideration. In this light, it is highly doubtful whether Leony may compel NIA’s officers without subjecting them to administrative and or personal liabilities and/or accountabilities for releasing payment of his claims without any previously approved contract in violation of existing COA rules and regulations.
Be that as it may, for the supposed refusal or failure or even mere inaction which is tantamount to disallowance of his claim Leony’s proper and immediate remedy was to file a claim with the COA. Only after COA has ruled on the claim may the injured party invoke judicial intervention by bringing the matter to the Supreme Court on petition for certiorari. Before a party is allowed to seek intervention of the court, it is a pre-condition that he should have availed of all the means of administrative processes afforded him. Hence, if a remedy within the administrative machinery can still be resorted to by giving the administrative officer concerned every opportunity to decide on a matter that comes within his jurisdiction, then such remedy should first be exhausted before the court’s judicial power can be sought. The premature invocation of the court’s intervention is fatal to one’s cause of action. Accordingly, absent any finding of waiver or estoppel the case is susceptible of dismissal for lack of cause of action (NIA vs. Enciso, G.R. 142571, May 5, 2006).