COA orders OSG to refund excess allowances
The Commission on Audit (COA) has flagged the continued receipt by lawyers of the Office of the Solicitor General (OSG) of allowances exceeding 50 percent of their salaries.
In its 2016 audit report, the COA called on the OSG to refund the excess allowances and to limit receipt to the 50-percent cap. The said allowances and honoraria were paid by the OSG’s client government agencies for legal services.
The OSG has resisted the audit recommendation, insisting it has been following the law and that the COA Circular No. 85-25-E does not apply to its lawyers.
In fact, two notices of disallowance issued by auditors on February 2014 and August 2016 are currently pending appeal before the COA proper.
The OSG acknowledged the need to enforce the requirement so the allowances may be properly taxed.
But it took exception to COA’s insistence on the 50-percent allowance cap.
The audit report noted that the OSG invoked Section 1(i) of Presidential Decree No. 478 (the 1974 OSG law) and Section 35(9), Chapter 12, Title III, Book IV of Executive Order No. 292 (Administrative Code of 1987).
Citing the said rules, the OSG said its lawyers were authorized to receive honoraria and allowances for their legal services “without qualification as to the number of agreements” they can enter into.
The OSG also told the COA that the Administrative Code and the OSG law repealed the 1985 circular that imposed the allowance cap, since it was effectively inconsistent with said regulations.
Exceeded its authority
It also said the COA exceeded its authority by imposing a ceiling on allowances when it was only mandated to guard against irregular, unnecessary and excessive expenditures.
In 2016, incumbent Solicitor General Jose Calida and predecessor Florin Hilbay received excess allowances of P1,123,742 and P4,662,144.41, respectively.
For COA, they should only receive allowances up to P351,258, half their 2016 salaries of P702,516. (Calida and Hilbay each served for six months under President Duterte and predecessor Benigno Aquino III, respectively.)
All in all, the excess allowances including those received by 15 other OSG officials totaled P8,555,767.80.
The other officials who received allowances above the 50-percent cap were Myrna Agno Canuto, Herman Cimafranca, James Cundangan, Renan Ramos, Bernard Hernandez, Eric Remegio Panga, Ma. Antonia Edita Dizon, Danilo Leyva, Raymund Rigodon, Liway Czarina Ruizo, Sonny Von Ruaya, Lilian Abenojar, John Dale Ballinan, Melbourn Ziro Pana, and Ma. Hazel Acantilado.
The COA said that while OSG lawyers were authorized by Section 7 of Republic Act (RA) No. 9417 to receive allowances and honoraria, this was “not without limitations.”
It cited Item 4 of the COA circular issued in April 1985, which limits a government employee’s “extra compensation” equivalent to “50 per centum of his annual salary.”
In a text message to reporters, Hilbay maintained that “obviously, the COA doesn’t have the authority to countermand an act of Congress.”
Old, recurring issue
He explained that the matter of excess allowances was an “old, recurring issue between OSG and COA.”
“The COA can’t amend a law, especially a specific provision of law that goes back to the Administrative Code of 1987 and reiterated under [RA] 9417. That’s always been the position of the OSG under every SolGen,” he said.
OSG spokesperson Erik Dy echoed Hilbay’s explanation. He cited the OSG charter’s authorization for lawyers to receive honoraria for legal services.
“This is due to the government’s intention to attract the best the brightest lawyers to work and build a career at the OSG,” he said.
Dy also said the issue was “nothing new” since “even previous Solicitor Generals have been subject of these audit findings.”
“The OSG is steadfast in its position that a COA administrative circular cannot abrogate a substantive law such as the OSG Charter,” Dy said.
