COA affirms disallowance of P664M worth of perks given to PEZA employees

The Commission on Audit has affirmed the notices of disallowance (ND) issued against the P664 million worth of bonuses and allowances given to employees of the Philippine Economic Zone Authority (PEZA).

In a decision released to media on Wednesday, COA denied PEZA's petition for review of 112 NDs issued by the COA Corporate Government Sector starting January 6, 2012.

The notices cover salary payments, Representative and Transportation Allowance, overtime and night pay, bonuses, monetization of leave credits, gratuity pay, employer's share in the Provident Fund, and Government Service Insurance System premiums for officers and employees based on increased salary rates from July 2009 to December 2012.

The COA-CGS had said that these employees' perks at the PEZA head office and the economic zones in Baguio, City, Cavite and Mactan, Cebu were irregular since they had no approval from the Office of the President (OP) through the recommendation of the Department of Budget and Management (DBM).

The PEZA, in its appeal, said it is authorized to appoint and fix the compensation of its personnel and is merely required to report to the OP its planned compensation policies.

However, the commission proper rebuked PEZA, saying the DBM is the sole government agency mandated to classify positions, determine salaries, and review compensation benefits even if it is exempted from the Salary Standardization Law.

"Without DBM's imprimatur, the creation of position, appointment, and payment of salaries and benefits lack legal basis and should be disallowed in audit," the COA decision read.

The COA also said the arguments of PEZA on the Special Economic Zone Act is "misplaced" since all government agencies are bound to seek presidential approval for any additional benefits given to employees.

The COA thus ordered the approving and certifying officers of PEZA to refund the amount, while the recipients of the perks were off the hook since they had the belief these added benefits were due to them.

"Clearly, the approving/certifying officers and each employee who received the disallowed benefit are obligated, jointly and severally, to refund the amount so received. Further, PEZA’s Board of Directors are likewise solidarily liable for the total amount of disallowance," COA said.

"By way of exception, 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. In this case, there are no indicia of bad faith that can be ascribed to the recipient employees," it added. — BM, GMA News