BOY SCOUTS OF THE PHILIPPINES vs.

COMMISSION ON AUDIT
G.R. No. 177131 June 7, 2011
FACTS:

BSP was created through CA 111 as amended by RA 7278. COA wanted to subject
its funds to an audit. BSP alleges that it cannot be subjected to an audit as it not a
public corporation thus it is not within the jurisdiction of COA. Although it was ruled
in BSP vs NLRC that BSP is a public corporation, BSP contends that the amendment
in its charter which removes significant government participation transformed it into
a private corporation.

ISSUE:

Whether or not BSP is a public corporation

RULING:

BSP is a public corporation and its funds are subject to the COAs audit jurisdiction.

BSP falls within the Art. 44 (2) of the Civil Code which states:
(2) Other corporations, institutions and entities for public interest or purpose
created by law; their personality begins as soon as they have been constituted
according to law

and as such governed by the law creating it as provided in Art. 45 of the Civil Code.

Furthermore, the Sec. 20, Chap. 8, Title VI of the Administrative Code lists BSP
together with the GSP as an attached agency of DECS. As an attached agency, the
BSP enjoys operational autonomy, as long as policy and program coordination is
achieved by having at least one representative of government in its governing
board, which in the case of the BSP is the DECS Secretary. In this sense, the BSP is
not under government control or "supervision and control." Still this characteristic
does not make the attached chartered agency a private corporation covered by the
constitutional proscription in question.

Thus it appears that the BSP may be regarded as both a "government controlled
corporation with an original charter" and as an "instrumentality" of the Government
within the meaning of Article IX (B) (2) (1) of the Constitution.

An Instrumentality refers to any agency of the National Government, not integrated

within the department framework, vested with special functions or jurisdiction by
law, endowed with some if not all corporate powers, administering special funds,
and enjoying operational autonomy usually through a charter. This term includes
regulatory agencies, chartered institutions and government-owned or controlled
corporations.

Assuming for the sake of argument that the BSP ceases to be owned or controlled
by the government because of reduction of the number of representatives of the
government in the BSP Board, it does not follow that it also ceases to be a
government instrumentality as it still retains all the characteristics of the latter as
an attached agency of the DECS under the Administrative Code. Vesting corporate
powers to an attached agency or instrumentality of the government is not
constitutionally prohibited and is allowed by the above-mentioned provisions of the
Civil Code and the 1987 Administrative Code.