G.R. No. 147402 January 14, 2004 ENGR. RANULFO C.

FELICIANO, in his capacity as General Manager of the Leyte Metropolitan Water District (LMWD), Tacloban City, petitioner, vs. COMMISSION ON AUDIT, Chairman CELSO D. GANGAN, Commissioners RAUL C. FLORES and EMMANUEL M. DALMAN, and Regional Director of COA Region VIII, respondents. Facts: LMWD received a letter from COA requesting payment of auditing fees pursuant to the special audit the latter made to the former. However, Petitioner Feliciano sent a letter to the COA contesting the request. He based his objection on PD 198. He further asked for the refund of all previous payments made by the LMWD to the COA pursuant to previous audits. However, COA Chairman Gangan denied the said request. Thus, this petition for certiorari. Petitioner alleges that Local Water Districts are not GOCCs with original charter which is subject to the audit jurisdiction of the COA. Issue: Whether Local Water Districts such as Leyte Metropolitan Water District are GOCCs with original charter and conseqentially subject to the audit jurisdiction of COA Held: Yes. First and foremost, it is clear in Sec 2(1), Article IX-D of the 1987 Constitution that GOCCs with original charter are subject to the audit of COA. On the issue at hand, the petitioner insists that LWDs are private corporations and not a GOCC. However, it would be very inconsistent to the mandate of the Constitution in Sec. 16 of XII which prohibits the Congress to create a law providing the formation of a private corporation. It must be noted that Local Water Districts are fruits of PD 198. Hence, the argument of petitioner is illogical and unconstitutional. Obviously, LWDs are not private corporations because they are not organized under the Corporation Code. LWDs exist by virtue of PD 198, which constitutes their special charter. Since under the Constitution only gocc may have special charters. LWDs can validly exist only if they are gocc. To claim that LWDs are private corporations with a special charter is to admit that their existence is constitutionally infirm. Petition Denied.