Refund of P103M in bonuses ordered

ILOILO CITY—The Commission on Audit (COA) has affirmed an order of its Western Visayas office disallowing yearend bonuses granted to employees of the Iloilo provincial government in 2009 totaling P103 million.

In a decision denying a petition for review of the employees, the COA upheld on Aug. 28, 2012, the decision of COA Western Visayas affirming a ruling that disallows the release of funds for the Productive Enhancement Initiative (PEI), a system of providing bonuses to employees, in 2009.

The COA dismissed for lack of merit the petition for review, saying the bonuses that the Iloilo provincial government gave its officials and employees exceeded limits set by the Local Government Code of 1991 for expenses on personnel services.

The law provides that expenses for personnel services of first, second and third class municipalities should not exceed 45 percent of their total income the year before the expenses are incurred. Fourth and fifth class municipalities are allowed to spend up to 55 percent of their income on personnel services. These expenses include those for salaries, allowances and bonuses.

The commission affirmed the findings of its regional office that the provincial government had already exceeded the limit by P38 million even before the bonuses were released.

The bonus granted to at least 2,200 employees, who received up to P50,000 each, was on top of the employees’ 13th month pay and P5,000 bonus mandated by law.

The COA had recommended that the disallowed bonuses be returned by the employees.

In its decision, the COA dismissed the employees’ defense of “acting in good faith” when they received the bonuses that was released through an appropriation ordinance passed by the provincial board during the administration of former Iloilo Gov. Niel Tupas.

The commission said similar bonuses were also disallowed in 2002 and 2004.

The Supreme Court in 2008 affirmed a COA order disallowing the 2002 bonuses of the provincial government. The COA had ordered provincial officials and employees to refund at least P21 million in additional Christmas bonuses that year.

“Their failure to observe the law, despite the disallowance previously issued … for the same violations, would refute their claim of good faith,” said the COA in its decision on the 2009 bonuses.

“Clearly, the officials and employees … were aware at the time of payment of the PEI in December 2009 that the grant of the benefit will be disallowed for the same reason,” it said.

Rank-and-file employees who received the bonuses are not exempt, the COA said.