2018News

COA orders PEZA to refund P664 million in extra salaries, benefits

By Adrian Ayalin, August 15 2018; ABS-CBN News (abs-cbn.com)

http://news.abs-cbn.com/news/08/15/18/coa-orders-peza-to-refund-p664-million-in-extra-salaries-benefits

Image Credit to Rappler

MANILA – The Commission on Audit (COA) has ordered the refund of P664.364 million additional salaries and benefits that the Philippine Economic Zone Authority (PEZA) gave its officers and employees from July 2009 to December 2012.

In a decision issued on January 29, 2018, COA denied the petition for review filed by PEZA on October 14, 2014.

The review plea came after the audit agency’s Corporate Government Sector Cluster 4 denied PEZA’s appeal, and the latter started receiving Notices of Disallowance on January 6, 2012.

The COA, however, did not order the beneficiaries to return the money they received as only their officials were held liable.

“The payees need not refund the disallowed increase of benefits received. The approving and certifying officers, however, shall remain solidarily liable to the extent of the participation in the disallowance, in the total amount of P664,364,585.84,” the COA said in a decision signed by Chairperson Michael Aguinaldo and Commissioners Jose Fabia and Isabel Agito.

The COA emphasized that the payees were “passive recipients” of the additional salaries and benefits as stated in the Administrative Code of 1987.

“Sub-section 16.1.3 of the Rules and Regulations on Settlement of Accounts provides that public officers who approve or authorize expenditures shall be liable for losses arising out of their negligence or failure to exercise the diligence of a good father of a family,” the COA said.

The additional compensation was an off-shoot of a PEZA Board Resolution dated July 21, 2009, under which the agency approved an increase in its compensation plan leading to hikes in salaries, representation and transportation allowances, overtime and night pay, bonuses, benefits, monetization of leave credits, gratuity pay, employer’s share in the Provident Fund, and government’s share in the Government Service Insurance System premium.

The COA said the increase in salaries and benefits were contrary to Section 6 of Presidential Decree No. 1597 dated June 25, 2001 which requires prior approval of the Office of the President, through the Department of Budget and Management.

“Further, the confirmation made by the Department of Budget and Management on PEZA’s Corporate Operating Budget for fiscal years 2009 to 2012 clearly indicated that new/additional benefits or salary increases granted should be supported by appropriate legal basis and approval from the OP,” the COA said.

The extra benefits were given by the PEZA head office as well as economic zones in Baguio City, Cavite and Mactan, Cebu.

The COA decision also ordered the audit team leader and the supervising auditor assigned at the PEZA office to issue a supplemental notice of disallowance to include names of the PEZA board members who will be held liable for the irregular hike in salaries and benefits.

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