COA bares OSG’s P10-M ‘excess’ allowances, P800-M ‘illegal’ payments
Solicitor General Jose Calida and 14 lawyers in his agency last year collected P10.8 million in excess allowances in violation of Commission on Audit (COA) regulations and the Office of the Solicitor General (OSG) itself illegally paid P800 million to foreign law firms from as far back as nine years ago, according to the state accounting agency.
In its 2017 audit report, the COA said Calida received a total excess in allowances of P7.5 million in 2017. Two Assistant Solicitors General who received the next largest amounts were Renan Ramos, who exceeded his allowances by more than P837,000 and Henry Angeles, who got an excess of more than P697,000, the COA said.
State auditors said the practice was irregular because OSG officials collected allowances whose amounts exceeded 50-percent of their salary, the regulatory cap set by the COA.
“We recommended that management (OSG) refund the excess amount received and deposit the same to (a) trust fund,” the COA said.
Calida on Friday said the questions raised by the COA over the excess allowances the Solicitor General and other OSG lawyers collected was “not new.”
“It has been on-going for the past five years since the time of Solicitor General Florin Hilbay,” Calida said in a statement. “The OSG has consistently acted within the confines set by law. The honoraria and allowances were paid in accordance with law.”
The COA report, made public on Thursday, said the hiring of foreign law firms by the OSG was illegal because it did not have the concurrence of the state auditing agency.
“The engagement of private lawyers and law firms for legal services and professional fees was unauthorized due to the absence of prior acquiescence of the OSG and written concurrence of the COA,” it said.
The contracts also were not submitted within the required five working days “from execution” while the selection and termination of the private lawyers and law firms were not clearly recorded and transmitted to the COA, it said.
Other COA findings in the 2017 OSG audit report:
Of the more than P116.2 million appearing on record to have been paid to Gibson, Dunn and Crutcher (GDC) LLP, only about P101 million was actually disbursed.
Excessive claims for expenses for local and foreign travels, amounting to P132,000 last year.
Computer networking equipment worth P20.3 million, bought in December 2016, was unused and rendered useless.
Failed implementation of the rehabilitation of the OSG building, worth P13.9 million.
Net take-home pay of seven employees fell below the minimum amount of P4,000 because the OSG allowed payroll deduction of employees’ obligations.
Foreign law firms
Data showed that the OSG paid some P417.9 million to White and Case LLP for its legal services in the Philippine government’s arbitration case against a Belgian company from 2012 to 2017.
The OSG also spent P200 million for the payment of services of foreign law firms Paul Hastings, Janofsky and Walker in the dispute concerning the Metro Rail Transit Corp. Project that started in 2009. Gibson, Dunn and Crutcher (GDC) LLP later took over from the Paul Hastings firm.
The OSG, then under Hilbay, spent P149 million for the legal services of Foley Hoag LLP in the arbitration case initiated by the Philippines in its maritime dispute with China, which was filed in January 2013 and settled in favor of Manila in July 2016.
Failure to present contracts
In all these engagements, the OSG failed to present the contracts or agreements with the foreign law firms, and documents showing prior consent by the Solicitor General and government auditors, the COA said.
In their reply to auditors, OSG officials said the COA’s approval of their engagements with the foreign law firms was not mandatory, a claim dismissed by the COA.
“It was made clear that the intent of the (COA) circular was to curb unauthorized and unnecessary disbursement of public funds, thus, the nature of engagement of lawyers/law firms and the procuring agency is immaterial,” the audit body said. —WITH A REPORT FROM MARLON RAMOS
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