COA affirms notices of disallowance for P10-M cash incentive given by DOST to personnel

The Commission on Audit has held former Department of Science and Technology (DOST) Secretary Mario Montejo and nine other agency officials liable over the notices of disallowance issued in connection with the grant of P10.6-million cash incentives to the agency's personnel in 2010 and 2011.

In a decision released Monday, the COA Commission Proper said DOST’s approval of the collective negotiation agreement (CNA) incentive violated several provisions of the Department of Budget and Management Circular NO. 2006-1.

The DBM document said the CNA is a one-time benefit, with funding to be sourced from savings generated by the agency from its operating expenses by undertaking cost-cutting measures.

Audit of DOST’s financial records showed CNA incentives amounting to P5.871 million and P4.774 million were paid out to the agency’s officials and employees in 2010 and 2011, respectively, for a total of P10.644 million.

In November 2011, the audit team leader and supervising auditor for DOST issued notices of disallowance for the CNA incentives due to the absence of documents showing that the agency generated savings from the cost-cutting measures it implemented.

Auditors also noted that the payment of CNA has been the subject of several adverse audit reports, observation memoranda, notices of suspension and disallowance since it began in 2004.

Held liable for the 2010 CNA were Montejo, DOST chief accountant Helen Gianan, chief administrative officer Raul Dumol, Administrative and Legal Services director Elizabeth Fontanilla, Financial Management Division director Juan Reyes Jr., and Assistant Secretary for finance, administrative and legal affairs Mario Bravo. 

For the 2011 CNA, the audit report identified Undersecretary for Research and Development Graciano Yumul, chief administrative officer Raul Yumul, Fontanilla, and Gianan as the liable officials.

In 2012, Montejo filed a petition for review as DOST Secretary and on behalf of all officials and employees who received the incentive. He argued that the payment of the CNA was valid because social legislation favors such perks and Congress allowed its payment to first-level government personnel.

However, the Commission Proper composed of COA chairman Michael Aguinaldo and commissioners Jose Fabia and Isabel D. Agito said the notices of disallowance against the CNA were valid.

“The payment of CNA incentive should be a one-time benefit after the end of the year. [The] DOST did not comply with this directive as it made a mid-year payment of CNA incentive. As to the officers of DOST who approved and released the disallowed benefits, this Commission holds that they are solidarily liable for the total disbursements,” the COA said in its decision. —ALG, GMA News