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A STATE
audit of Manila Electric Co.’s (Meralco) financial
statements could create a dangerous precedent, and
stands on shaky constitutional ground, according to
Meralco’s top lawyers.
If such is allowed, any person or entity
can now ask the Commission on Audit (COA) to audit the
books, records and accounts of a private corporation or
distribution utility at any time.
“We cannot find any legal basis for the
COA to conduct an audit of a private corporation upon
the request of a private entity like the National
Association of Electricity Consumers for Reforms [Nasecore],
without even prior consultation with Meralco and the
Energy Regulatory Commission [ERC], whom we acknowledge
to be the sole regulator authorized by the Electric
Power Industry Reform Act for purposes of rate-fixing,
among other things,” Monico Jacob, Meralco head for
regulatory management office, said in a correspondence
to the ERC.
The Meralco official said the conduct of
the audit will be detrimental to the private sector and
would not serve the best interest of the government,
which will now have to use precious time and resources
performing functions outside the scope of its authority.
Jacob emphasized that Meralco, as a
regulated utility, has always been transparent in the
conduct of its business. Its actions on rates to be
charged to consumers and the general public are always
subject to close scrutiny and approval by the ERC, he
added.
“Transparency in our dealings is our
policy and we always welcome the examination or audit of
all our transactions provided it is done within the
bounds of law,” Jacob said.
He said the mandate and authority of the
COA is limited to the audit of books, records and
accounts of all government entities. The authority does
not extend to private corporations.
“The 1987 Philippine Constitution
expressly limited the power, authority and duty of the
COA to the examination, audit and settlement of all
accounts pertaining to the revenues and receipts of, and
expenditures or uses of funds and property, owned or
held in trust by or pertaining to the government or any
of its owned and controlled corporations, among others,”
he said.
As a private
corporation, according to Jacob, they are alarmed by the
sudden request of COA to conduct an audit on the books,
records, and accounts of our company.
ERC, on the other hand, stood its
ground and still urged Meralco to subject its books,
records and accounts for scrutiny of the COA.
ERC urged Meralco to reconsider its
position considering the public interest involved and
the fact that the issue may have already been mooted by
the Supreme Court ruling in Meralco v. Genaro Lualhati
et al. (GR No. 166769, December 6, 2006).
The regulatory body even advised Meralco
to directly take up its issues with COA.
On July 30, 2007, in a letter to Meralco
president Jesus P. Francisco, ERC chairperson Zenaida
Ducut had formally served Meralco notice of the audit to
be conducted by the COA.
“We request that you provide COA’s audit
team a suitable working space (i.e., a secure room with
filing cabinets, desks, tables and internet access) and
access to your financial records and reports that may be
necessary and relevant to its audit,” Ducut said in her
correspondence.
The chief regulator added that the ERC
would appreciate receiving Meralco’s reply within five
days. A copy of the letter was furnished COA Chairman
Reynaldo A. Villar.
Pete Ilagan, Nasecore president,
commended Ducut for heeding his group’s plea for the ERC
to finally set in motion the audit.
The Supreme Court set aside a July 22,
2004, ruling of the Court of Appeals and its January 24,
2005, resolution that a COA audit of Meralco should have
been undertaken before the ERC approved Meralco’s
rate-hike application.
Ilagan said the SC-mandated audit of
Meralco was an acknowledgment of the fact that Meralco
has to justify the rate increase.
“This
audit is very important because if COA finds out that
Meralco’s increase was unjustified, then the increase
collected from us since 2003 should be refunded by
Meralco,” Ilagan said. |
