COA forbids P102.7-M extra bonus of Capitol workers
The Commission on Audit (COA) has disallowed the payment of P102.7 million in Productivity Enhancement Incentive (PEI) to Iloilo provincial government employees released by the administration of former Gov. Niel Tupas Sr. in 2009.
Each employee was then granted P50,000 as PEI for calendar year 2009.
In the notice of disallowance dated Sept. 28, 2010, audit team leader Nilo Castigador stated that the extra bonus was granted despite the existence of excess in personal service limitation.
The COA team pointed out that in their computation of the provincial government’s adherence to the cited regulations, “we observed that it had exceeded its personal services limitation by P38,701,198.90 prior to the granting of PEI.”
The payment of PEI to Capitol employees in 2009 constitutes an irregular and illegal transaction as defined under COA Circular No. 85-55A, having violated Section 325(a) of R.A. 7160 and Local Budget Circular No. 2009-93 dated Dec. 17, 2009.
The COA has directed all the employees who received the 50,000 PEI last year to settle the said disallowance immediately.
Limitation
Section 325 (a) of Republic Act No. 7160 provides that, “the total appropriations, whether annual or supplemental, for personal services for a local government unit for one fiscal year shall not exceed 45 percent in the case of the first to third class provinces, cities and municipalities, and 55 percent in the case of fourth class or lower, of the total income from regular sources realized in the next preceding year.
Department of Budget and Management Local Budget Circular No. 2009-93 dated Dec. 17, 2009 further provides that the funding source for the payment of the productivity enhancement incentive for local government units shall be charged against LGU funds subject to the budgetary conditions and personal services limitation in the LGU budgets pursuant to Section 325(a) of R.A. 7160.*
