DBP hits COA for disallowance notice on bonuses

The Development Bank of the Philippines has assailed the Commission on Audit for its notice of disallowance of its performance-based bonus (PBB) and “strongly” denied the COA resident auditor’s statement that the authorization by the Governance Commission for Government-Owned or -Controlled Corporations (GCG) of the 2014 PBB “was tainted with fraud.”

In a statement, the DBP said it had already filed a complaint in the commission proper against the COA resident auditor and team leader for alleging fraud and for deliberately omitting DBP’s comments in the notice of disallowance.

It said the DBP Charter authorizes the bank to set its own compensation plan, including the grant of performance bonuses. The presidential confirmation of the DBP compensation plan was recognized by the COA led by then chair Grace Pulido Tan in February 2012.

However, on the basis of confidential letters by a disgruntled employee of the bank, COA unilaterally and without notice to DBP reversed in April 2015 this final and executory COA decision, it said.  DBP received a copy of the COA reversal only on July 10, 2015.

These bonuses—totaling about P298 million awarded to 2,168 out of 2,201 officers and employees of the bank eligible for the incentive—were approved by the GCG based on DBP’s meeting the conditions for the grant of bonuses.

The bonuses, the DBP statement said, should be taken in the wider context of DBP’s 2014 financial performance where it posted P4.6 billion in profits, P2.53 billion of which were remitted to the national treasury as dividends. This year, DBP is expected to again remit another P2.34 billion in dividends to the national treasury.

The conflict stemmed from the confirmation by then President Gloria Macapagal-Arroyo in 2010 the DBP compensation plan. The presidential confirmation thus became final when the COA did not file an appeal.

According to a DBP briefing paper, a disgruntled DBP official sent confidential letters to the COA commissioners—without the DBP’s knowledge—alleging that the presidential confirmation by President Arroyo violated the Omnibus Election Code prohibiting giving pay increases during the election period.

Without informing the DBP of the complaint, COA rendered a decision declaring the presidential confirmation a violation of the election code and sustained an earlier notice of disallowance on the performance bonuses. The DBP filed a motion for reconsideration, saying the presidential confirmation was already executory because:

1) The COA did not file a motion for reconsideration within the required 30-day period;

2) The DBP official was not a party to the case; thus his confidential letters should not have been given due course;

3) The DBP was deprived of due process; it was never furnished copies of the confidential letters or was informed about them;

4) The presidential confirmation did not violated the election code because so salary increase was given; President Arroyo merely confirmed the benefits long enjoyed by DBP employees;

5) COA has no power to declare an act of the President illegal; it should have referred the matter to the Commission on Elections.