The Commission on Audit (COA) has questioned the unauthorized allowances and other benefits amounting to P165.65 million that officials and employees of the Philippine National Construction Corp. (PNCC) received in 2010, saying these appeared to be grossly excessive and without legal basis.
One of the benefits that caught the COA’s attention was the 250-percent separation pay for every year of service of employees, and the arbitrary method of determining terminal leave credits for the PNCC Retirement Trust Fund and members of the PNCC Board.
Terminal leave credits were not based on actual vacation and sick leave credit days but on estimates given by management.
COA said these were “without legal basis and are grossly excessive and injudicious,” based on a COA circular, particularly because from 2003 to 2006 the corporation had incurred losses.
It also had similar comments on the gratuity benefits that PNCC officials received in addition to the retirement benefits. The gratuity benefits were sourced from the pool of savings from operations, NLEX revenue shares, retirement shares from the SLEX Joint Venture Agreement, and dividends from other subsidiaries and affiliates.
The COA also said board members of the PNCC Retirement Trust Fund who also belonged to the PNCC board collected P62.654 million worth of allowances and benefits not sanctioned by the Department of Budget and Management.
It noted that members of the board were not salaried officials and are not entitled to certain benefits. The benefits they received without authority were incentive and performance bonuses, monthly allowances, midyear bonuses, Christmas bonuses, anniversary bonuses, rice subsidies and productivity enhancement incentives.
COA said that while every corporation had the power to establish pension, retirement and other plans for its officers and employees, this was not absolute.
The COA wants PNCC officials to return the excessive amounts they received and to stop their irregular benefit system.
But the PNCC officials who received the benefits said they received them in good faith and cited provisions of the Labor Code, the Government Accounting and Auditing Manual and recent rulings on similar cases that prohibit deductions from salaries, separation or retrenchment pay, or refund of what had already been received.
The PNCC said the basis for granting the retirement benefits was the PNCC’s bylaws and the Corporation Code, which states that corporate powers lie with the board of directors. The benefits were covered by various board resolutions.
It said that while the government was majority owner of PNCC, the latter still retained its private character as a government-acquired asset corporation.