15.20 While the community may indeed benefit from the provision of these resources
to the NGOs/POs, it is important to emphasize that this benefit is incidental to
the primary purpose, which is the improvement of the Center’s facilities and the
provision of a vehicle for the cooperative, both of which are integral to the
NGO’s operations.
15.21 As established in GR Nos. 230818 and 2445403, dated February 14, 2023, the
Court laid down the test of the validity of a public expenditure as follows:
“ We must not forget that Pascual has already laid down a standard in
determining the validity of a public expenditure. With that, We cannot
sustain such amplification of the principle as justification for the
expenditure of public funds. While the concept of “public purpose,”
taken alone, may be given such extended, flexible, and evolving
meaning, the same cannot be said when disbursement of public funds
is involved. In the latter scenario, the Court must adhere to the view
laid down in Pascual, i.e., that “[i]ncidental advantage to the public or
to the state, which results from the promotion of private interests and
the prosperity of private enterprises or business, does not justify their
aid by the use of public money.” Again, expenditure of public funds
requires that the purpose be mainly for the public with any benefit to
private enterprises be merely incidental, and not the other way around.
This narrow view laid in Pascual is put in place precisely to serve as
guard against the squander of state resources, and to avoid the likely
abuse that may follow from easing up the otherwise strict guidelines
in the expenditures of valuable state funds.
xxx
To reiterate, if the payment of the financial grant is allowed, the project
constructed using public funds, there is no denying that PVHA will be
the main beneficiary. Said private property will be the primary
recipient of the improvement, and any benefit to the larger community
and the public in general shall, at most, be speculative and merely
incidental. This cannot be allowed for being in direct contravention
with the mandate of PD 1445.”
15.22 Further, Section 6.2.5 of COA Circular No. 2007-001 stipulates that no portion
of the funds granted to the NGO/PO shall be used for the acquisition of assets
unless such acquisition is necessary for the execution of the project and
explicitly stated in the MOA. In the subject project proposal, there are no
government projects or programs being implemented as previously discussed.
The funds, as stipulated in the MOA, are solely intended to acquire or improve
the aforementioned equipment and structures for the NGOs.
15.23 We recommended that Management identify the priority projects under its
Work Financial Plan that may be implemented by the NGOs and publish
these projects in newspapers, on agency websites, and on bulletin boards
for at least three months before the target commencement date.
3
Efraim C. Guinino, Petitioner, vs. Commission on Audit , et.al., Respondents (GR No. 230818) and Rene
C. Figueroa, Petition, vs. Commission on Audit, Respondent (GR No. 244540).
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