Bautista-Mabazza, K. C. (2016). Water districts: The newbies on the auditing block (Unpublished master's thesis). Public Management Development Program, Development Academy of the Philippines.

Public Management and Development Program Senior Executives Class Batch 5 Thesis (SEC)--Development Academy of the Philippines.

The Commission on Audit is the country's supreme audit institution. It has been in existence for 117 years now. It is mandated by the Constitution to audit all government agencies, including government-owned and controlled corporations with original charters, to determine whether these agencies comply with laws, rules and regulations in disbursing government funds, and to disallow illegal, irregular, unnecessary, unconscionable, excessive or extravagant disbursement of government funds. Meanwhile, Local Water Districts have been declared by the Supreme Court in 1991 as government-owned and controlled corporations with original charter since they are created pursuant to a special law, Presidential Decree No. 198, and as such fall under the jurisdiction of the Commission on Audit. It was only in 2004 that 100% of LWDs were directed by COA to be audited annually. In the course of post audit of the Commission on Audit of the accounts and operations of Local Water Districts, various disbursements of funds for personnel salaries, allowances and benefits, travelling allowance, and per diems of the Board of Directors, were disallowed for being in violation of existing laws, rules and regulations. Consequently, the Commission on Audit required the refund of the disallowed disbursements from the persons liable. Local Water Districts claim that even before the Supreme Court declared them to be GOCCs in Davao City Water District vs. CSC, they have already been granting additional benefits to their members of the Board, with the approval of the LWUA, and to their officers and employees. They have continued doing so even after the promulgation of the decision in that case. The Local Water Districts with disallowed disbursements appealed their cases in the appropriate COA level until it reached the Supreme Court on Certiorari. The Supreme Court, in its decisions, affirmed the COA Disallowances. However, it did not require the refund of the disallowed amount considering that the disallowed salaries, allowances and benefits were received in good faith, without knowledge that the payment thereof had no legal basis. The Commission on Audit is continuously faced with a management problem: How can COA continuously discharge its mandate to prevent the illegal, irregular, unnecessary, unconscionable, excessive or extravagant expenditure of government funds in the light of these Supreme Court decisions.