COA tells PCSO to return P286M of unauthorized remunerations for 2014

The Commission on Audit (COA) has directed the Philippine Charity Sweepstakes Office (PCSO) to refund P286.937 million of unauthorized allowances, bonuses and benefits supposedly given to its officials and employees in 2014.
 
“Clearly, the grant of the herein allowances, bonuses and other personnel benefits was not in conformity with existing compensation laws, rules and regulations and the PCSO Management was not able to present sufficient and appropriate evidences to validate such grant,” the COA said in an annual audit report published on its website.
 
“Thus, the Audit Team considered said remunerations as being unauthorized and inappropriate under the circumstances,” the report added.
 
The report noted that despite the commission's repeated orders to stop such grants, the PCSO management continued to give its officials and employees unauthorized remunerations like allowances – representation and transportation, clothing and uniform, staple food, medicine, and weekly draw – hazard pay, revenue performance incentive pay, educational assistance bonus, Christmas grocery bonus and collective negotiation agreement, and Christmas bonus.
 
The PCSO that it still has a total of P255 million of unauthorized remunerations for 2013 that the audit body earlier disallowed, the agency continued to release similar grants the following year, the commission claimed.
 
COA said the Notices of Disallowance (NDs) issued for the remunerations in 2013 are currently under appeal at the Office of the Director of the COA Corporate Government Sector.

Exceeds 2014 GAA

A breakdown of the alleged unauthorized allowances, bonuses and benefits PCSO allegedly granted to its officials and employees in 2014 is as follows:

• Excess representation and transportation allowance – P6,764,307.25

• Excess clothing/uniform allowance – P3,255,000

• Staple food allowance – P7,902,000

• Medicine allowance – P11, 917,501

• Hazard pay – P14,697,509.43

• Weekly draw allowance – P32,687,340

• Revenue Performance Incentive Pay – P13,410,000

• Educational assistance bonus – P63,798,136.21

• Collective Negotiation Agreement (CNA) Christmas grocery bonus – P40,210,000

• CNA Christmas bonus – P92,295,249.31

The commission said most of the grants were not allowed under compensation laws and regulations while others were given in excess of what was provided under the General Appropriations Act (GAA) of 2014.
 
COA records show that PCSO officials were given P18.927 million in representation and transportation allowance in 2014 when the GAA that year allowed only P12.163 million in line with salary grades of the officials.
 
“Thus, the excess of P6.764 million was considered unauthorized,” the state audit body said.
 
The commission further noted that under the 2014 GAA and a Department of Budget and Management (DBM) circular on February 23, 2012, the annual uniform or clothing allowance of each government official or employee should not exceed P5,000 a year.
 
Contrary to the GAA and the DBM circular, the PCSO in 2014 fixed the clothing/uniform allowance of each official and employee at P10,000 for a total of P6.510 million when “only half of it was allowed,” the commission claimed.

Standardized salary rates

Based on Republic Act 6758 or the Salary Standardization Law as well as a DBM Corporate Compensation Circular on February 15, 1999, the staple food  and medicine allowances should be integrated in the standardized salary rates of government officials and employees, according to COA.
 
“Contrary to the foregoing provisions, the officials and employees of the PCSO Head Office were continually granted regular monthly Staple Food Allowance and Medicine Allowance of P1,000 and P1,500, respectively, in CY 2014 resulting in a total unauthorized payment of P19.820 million,” the COA report read.
 
The report noted that the PCSO gave a total of P14.697 million or P2,000 in monthly hazard pay its personnel who were non-public health workers or assigned to conflict areas.
 
Various DBM circulars as well as the 2014 GAA states that personnel who are entitled to hazard pay are only those “exposed to hazardous situations such as assignment in strife-torn or embattled areas, distressed or isolated stations, prison camps, mental hospitals, leprosaria, radiation-exposed clinics/laboratories/workshops, disease-infested areas and areas declared under the state of calamity or emergency which pose occupational risks or perils to life,” the commission pointed out.
 
COA said the weekly draw allowance is not supported by any existing rule or law and is “exclusively availed of by PCSO personnel even without the actual performance of duty or attendance during the Agency’s daily lotto draw proceeding.”
 
The revenue performance incentive pay, educational assistance bonus, grocery bonus and CNA Christmas bonus were all “without legal basis and/or without approval from the Office of the President,” the commission said.
 
“We recommended that Management discontinue the grant of allowances, bonuses and other benefits without sufficient legal basis and/or without approval from the Office of the President. [And to] require the refund of the unauthorized allowances, bonuses and other personnel benefits granted to the officials and employees of the PCSO Head Office in CY 2014 in the total amount of P286.937 million,” the commission said.

Previously authorized
 
In response to the COA report, the PCSO management wrote that based on Republic Act 1169 or the PCSO Charter, the PCSO Board has the authority to fix the salaries and allowances of its officials and employees.
 
The agency also said the remunerations mentioned in the COA report had been previously authorized by former Presidents Fidel V. Ramos, Joseph Estrada and Gloria Macapagal-Arroyo.
 
Even President Benigno Aquino III also authorized the remunerations in a May 19, 2011 letter signed by Executive Secretary Paquito Ochoa Jr.
 
In a rejoinder, the state auditors, however, said the power of the PCSO governing board to fix the salaries and determine the reasonable allowances, bonuses and other incentives of its officials and employees under the PCSO Charter, is subject to pertinent civil service and compensation laws.
 
COA said the Supreme Court had earlier ruled that the discretion of a government agency in matters of personnel compensation “is not absolute as the same must be exercised in accordance with the standard laid down by law.”
 
The commission further maintained that the executive approval by former Presidents Ramos, Estrada and Arroyo “have practically lost its effects” following the passage of the RA 10149 or the GOCC Governance Act of 2011.
 
The approval by President Aquino only applied to the remunerations for 2010, and must not be construed as an approval of future benefits beyond that year, the commission added. – VS, GMA News