FACTS:

In 1984, the GFSME Management Board granted benefits to all of its officers and employees, which included, among others, the Cost of Living Allowance (COLA) and the Amelioration Allowance. Thus, from the year 1984 to 1991, the employees were receiving monthly COLA and amelioration allowance. However, when the Salary Standardization Law (R.A. No. 6758) took effect, the Department of Budget and Management (DBM) issued DBM-CCC No. 10, which serves as the Implementing Rules and Regulations of the Revised Compensation and Position and Classification System Prescribed of said law for Government Owned and/or Controlled Corporations (GOCCs) and Government Financial Institutions (GFIs). In pursuance thereof, the employee benefits of GFSME officers and staff hired after July 1, 1989 were discontinued beginning in March 1991 and the benefits of those hired before July 1, 1989 were disallowed in 1992. The petitioners questioned the validity of the stop payment order and refund order alleging that DBM-CCC No. 10 had already been nullified and was declared unenforceable by the Supreme Court in the case of Rodolfo S. de Jesus, et al. vs. COA for failure to publish prior to its effectivity. On that basis, all the benefits, except for the COLA and amelioration allowance, were restored to employees hired on or before January 1, 1994.

On August 27, 2001, COA issued a stop payment order of the 50% COLA and amelioration allowance and caused the refund of the previous payments made, followed by Notices of Disallowance dated September 11, 2001. The lower court, however, issued an Order enjoining COA from implementing the stop payment and refund order and notices of disallowance.

ISSUES:

Whether or not the RTC gravely abused its discretion in taking cognizance of AGE’s case, as the latter does not have a cause of action.

Whether or not the RTC gravely abused its discretion knowing that decisions, rulings and orders of COA can only be subject to judicial review through certiorari before the Supreme Court.

RULING:

The petition was granted.

The lower court had no jurisdiction to entertain the case. It should not have acted upon it for failure of the private respondents to exhaust administrative remedies. PD No. 1445 provides that "any party aggrieved by a decision of an auditor of any government agency in the settlement of an account or claim may within six months from receipt of a copy of the decision appeal in writing to the Commission."

Under the 1987 Constitution, any decision of the Commission on Audit may be subject to judicial review through certiorari to the Supreme Court. Section 7, Article IX of the 1987 Constitution provides that "Xxx. Unless otherwise provided by this Constitution or by law, any decision, order or ruling of each Commission may be brought to the Supreme Court on certiorari by the aggrieved within thirty days from receipt thereof." Pursuant thereto, the Rules of Court provides that "A judgment or final order or resolution of the COA may be brought by the aggrieved party to the Supreme Court on certiorari under Rule 65, except as hereinafter provided."

The Supreme Court categorically ruled that "the RTC has no jurisdiction to review a decision of the COA under the Constitution." Considering that the court a quo had no jurisdiction, its May 19, 2003 Order granting private respondent’s petition is declared null and void.