SC upholds COA ruling vs. 'excessive' PSALM bonuses

The Supreme Court has upheld a Commission on Audit (COA) ruling disallowing the release of a performance-based incentive to employees of the Power Sector Assets and Liabilities Management (PSALM) equivalent to 5.5 months of their salary.

The high court, in an en banc ruling on Tuesday, said the COA did not commit grave abuse of discretion when it affirmed a Notice of Disallowance against PSALM for handing out a corporate performance-based incentive to its employees in 2008 even without the approval of then-President Gloria Macapagal-Arroyo.

The incentive was equivalent to 5.5 months of an employee's basic pay, net of tax.

The PSALM is a government-owned and controlled corporation that  privatizes assets of the National Power Corporation (NPC) and the National Transmission Corporation (Transco), as well as the  management of NPC's Independent Power Producer.

In its audit report, the COA stressed that the president's approval was "expressly required" under Section 64 of Republic Act 9136 or the Electric Power Indutry Reform Act (EPIRA) Law.

The COA also noted that the taxes were charged to PSALM and were not withheld from the recipients.

In 2009, however, PSALM was able to get a "belated approval... retroactive to 2008."

Just the same, COA issued the notice of disallowance, saying that apart from the absence of a presidential approval, the incentive was also in violation of government austerity measures, having been considered "excessive and beyond just measure."

"The Court found that there was no grave abuse of dicretion on the part of COA because the belated presidential approval was not substantial compliance with the EPIRA requirement," said Public Information Chief Theodore Te at a media briefing Tuesday.

The SC even noted that the supposed presidential approval was not included with PSALM's petition.

"The Court upheld the COA's decision on the principle that the findings of an administrative agency is entitled to great weight unless there is grave abuse of discretion which the Court found was not present in this case," Te said. — Mark Merueñas/KBK, GMA News