Prior Approval for Hiring Private Lawyers: DSWD Case Limits Government Authority

The Supreme Court recently affirmed that government agencies cannot hire private lawyers without first securing the required approvals from the Office of the Solicitor General (OSG) and the Commission on Audit (COA). In Department of Social Welfare and Development v. Commission on Audit (G.R. No. 254871, December 6, 2022), the Court emphasized that these requirements are mandatory and must be obtained before a contract takes effect. The ruling clarifies the limits of government authority when engaging private legal counsel and serves as a warning to agencies that fail to follow proper procedure.

The Facts of the Case

The Department of Social Welfare and Development (DSWD) had been hiring Atty. Melanie D. Ortiz-Rosete as a private legal retainer for its Field Office No. 10 since 2015. In both 2015 and 2016, DSWD properly secured the Solicitor General's approval and the COA's concurrence before engaging her services.

For 2017, DSWD executed a new Contract of Service on November 2, 2016, covering the period from January 1 to December 31, 2017. However, DSWD only requested the Solicitor General's approval on December 5, 2016, which was granted on May 22, 2017—nearly five months into the contract period. Worse, DSWD did not request the COA's concurrence until January 5, 2018, after the contract had already expired.

The COA denied DSWD's request for concurrence, ruling that the application was belated and that expenditures arising from hiring private lawyers without prior written conformities are considered irregular.

The Issue Before the Court

The central question was whether the COA Proper committed grave abuse of discretion when it refused to concur in the 2017 contract due to the lack of prior written approvals from both the Solicitor General and the COA.

The Court's Ruling

The Supreme Court dismissed DSWD's petition for lack of merit, affirming the COA's decision.

Strict compliance required. The Court reiterated that, as a general rule, government entities are prohibited from securing the services of private legal counsel. The OSG, as the government's law office, has exclusive authority to represent the government in litigation and other legal matters, as provided under the Administrative Code of 1987.

By exception, agencies may hire private lawyers under extraordinary circumstances, but only after securing the written conformity of the Solicitor General and the written concurrence of the COA. These approvals must be obtained prior to the hiring or employment of the private lawyer. The Court emphasized that compliance must be both timely and complete—meaning both approvals must be secured before the contract takes effect.

DSWD's noncompliance was clear. The Court pointed to the timeline: the contract was executed on November 2, 2016; the request to the Solicitor General was made on December 5, 2016; the Solicitor General approved on May 22, 2017; and the request for COA concurrence was made only on January 5, 2018—after the contract had expired. This showed an "absolute lack of compliance" on DSWD's part.

A favorable recommendation is not enough. The Court rejected DSWD's argument that a COA Director's favorable recommendation could substitute for the COA Proper's concurrence. Only the COA Proper is authorized to issue a written concurrence for hiring legal retainers. A subordinate official's recommendation is merely recommendatory and not binding.

The PSALM exception does not apply. The Court distinguished the earlier case of Power Sector Assets and Liabilities Management Corp. v. Commission on Audit (G.R. No. 247924, November 16, 2021), where the COA's inordinate delay in acting on a request excused the agency's noncompliance. In that case, the request was filed on time, but the COA took over 400 days to act. Here, DSWD itself caused the delay by failing to file its request on time.

Practical Takeaways

• Secure approvals before signing. Government agencies must obtain the Solicitor General's written conformity and the COA's written concurrence before executing any contract with a private lawyer. Post-hoc approvals will not cure an irregular hiring.
• Both approvals are required. One approval without the other is only partial compliance. A favorable recommendation from a COA subordinate official cannot replace the COA Proper's concurrence.
• Renewals are not automatic. Prior concurrences for previous contracts do not carry over to new engagements. Each contract requires fresh approvals.
• New COA rules may ease the burden. COA Circular No. 2021-003 (effective August 12, 2021) exempts national government agencies and government-owned or -controlled corporations from the prior COA concurrence requirement, subject to conditions. However, this does not excuse past violations.
• Officials may be personally liable. Under the Government Auditing Code of the Philippines (Presidential Decree No. 1445), expenditures made in violation of law or regulations may become the personal liability of the officials responsible.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.