COA upholds Notice of Disallowance on P8.34-M incentives granted to PCGG employees

The Commission on Audit (COA) has upheld the Notice of Disallowance it issued on the P8.34 million worth of calamity assistance, gift checks, goodwill incentive and Collective Negotiation Agreement (CNA) incentive granted to the employees of the Presidential Commission on Good Government (PCGG) in 2012 and 2013.

This developed after COA, in its decision numbered 2019-29, junked the petition for review filed by PCGG officials Richard Amurao, Vicente Gengos, Jr., Maria Luisa Narvadez, and Mr. Efren Bracero, et al., saying the payments of such benefits and incentives have no legal basis.

The P8.34 million is broken down to: P1.67 million calamity assistance to PCGG officials and employees, expense entitlement personnel, Special Legal Counsels  and consultants; P3.45 million gift checks to PCGG officials and employees, to PCGG officials and employees, expense entitlement personnel, Special Legal Counsels  and consultants; P1.84 mullion for  payment of Goodwill Incentives to PCGG officials and employees; and P1.38 million CNA Incentives to personnel under contract of service/job order namely expense entitlement personnel, Special Legal Counsels  and consultants where no employer-employee relationship exist.

COA said under an existing law, a CNA incentive can only be granted to rank-and-file employees — the same rule as provided by Item No. 339 of Budget Circular No. 2012-4 dated December 17, 2012 that also covers those personnel performing managerial functions of the government and the Department of Budget and Management's policy and guideline existing at the time when the disallowed incentive was granted.

The CNA benefit, however, was extended to employees under contract of service/job orders such as expense entitlement personnel, Special Legal Counsels and consultants.

"The Budget Circular neither states nor implies that expense entitlement personnel, Special Legal Counsels and consultants may receive said incentive," the COA said.

"Hence, the payment, of CNA Incentive to these personnel of PCGG is considered irregular," it added.

As for the calamity fund, gift checks, and Goodwill Incentive, state auditors said the PCGG failed to present any evidence that these benefits were duly approved by the President as required by at least four existing laws, and that there are existing DBM guidelines issued pertaining to the grant of said benefits, again as required under existing laws.

"Hence, the calamity assistance, gift checks, and Goodwill Incentive is deemed to be integrated in the standardized salary rates, pursuant to Section 12 of Compensation and Position Classification Act," the COA said.

In addition, COA said the grant of additional bonus, which is not authorized by law or by the President of the Philippines, is prohibited under Item Nos. 2.1 and 2.2 of the DBM Circular Letter No. 2003-10 dated October 17, 2003, which reads: "Unless authorized by law or the President, the grant of additional bonuses in the form of cash, groceries, gift certificates and other goods to the officials and employees, is strictly prohibited."

"Any grant of the above-mentioned bonuses without the approval of the President will be considered as an ultra vires act and thus, constitutes an illegal disbursement of public funds. Anyone found violating this directive should be dealt with in accordance with the applicable provisions of existing administrative and penal laws," COA pointed out.

COA also cited Presidential Decree No. 1445, which provides that no money shall be paid out of any public treasury or depository except in pursuance of an appropriation law or other statutory authority.

"The PCGG resolutions issued en banc is not the appropriation law or statutory authority contemplated under such provision. It bears stressing that Calamity Assistance, gift checks, and Goodwill Incentives are not among the expenditures authorized under the General Appropriations Act for Fiscal Years 2012 and 2013," COA said.

PCGG tried to justify the disbursement of P8.34 billion by citing Executive Order (EO) 80 that allows PCGG to determine which allowances, incentives and bonuses are to be granted to its personnel.

COA, however, dismissed this and argued that the said EO specifically deals only with the adoption of Performance-Based Incentive System (Productivity Enhancement Incentive and the Performance-Based Bonus) for government employees.

"Therefore, the PCGG cannot grant financial assistance and incentives to its personnel under EE, SLCs and Consultants out of acts of liberality, equity and compassion, but should be pursuant to an existing law or as authorized by the President," COA said.

While COA recognized that PCGG has contributed billions of pesos to government coffers in fulfilling its mandate to recover ill-gotten wealth accumulated by the late President Ferdinand Marcos, his family and cronies, the valuable accomplishments of PCGG cannot be the basis for payments of the disallowed benefits.

"From the foregoing, the grant of Calamity Assistance, gift checks, and Goodwill Incentive is without legal basis, and the payment of CNA Incentives to personnel under EE, SLCs and Consultant is contrary to existing rules and regulations. Hence, this Commission finds no justifiable reason to modify or reverse COA NGS?Cluster 4 Decision No. 2015-016," COA said.

COA, however, limited the liability of the grant of the P8.34 million benefits to those who authorized its disbursement.

“The Supreme Court has ruled that public officials who are directly responsible for, participated in making the illegal expenditures, as well as those who actually received the amounts therefrom, shall be solidarily liable for their reimbursement. However, passive recipients or payees of disallowed salaries, emoluments, benefits, and other allowances need not refund such disallowed amounts if they received the same in good faith,” state auditors said.

“Thus, this Commission rules that only those officials who are directly responsible or participated in making the illegal expenditures shall be solidarily liable for their reimbursement. Those payees who have acted in good faith and unwittingly received the disallowed assistance and incentives are not required to refund the same,” state auditors added. —KBK, GMA News