COA scores excessive allowances of CAAP employees
MANILA, Philippines - The Civil Aviation Authority of the Philippines (CAAP), like the Metropolitan Waterworks and Sewerage System (MWSS) and the Philippine Economic Zone Authority (PEZA), reportedly gave its officials and employees unauthorized financial perks last year in the total amount of P125.9 million.
State auditors, in a report released this week, questioned the grant of such performance enhancement allowance (PEA) which appears to have no legal basis and is violative of existing laws, rules, and regulations on the giving of additional privileges to executives and personnel of government-owned and controlled corporations (GOCCs).
The Commission on Audit (COA) earlier issued similar observations in its reports covering the MWSS and PEZA after both agencies were found to have also accorded their officials and employees excessive or irregular bonuses and other incentives last year.
As for CAAP, state auditors said the GOCC, an attached agency of the Department of Transportation and Communications (DOTC), granted PEA to all personnel “regardless of employment status in the total amount of P125,901,835.96 based on CAAP Memorandum dated Dec. 19, 2012.”
The memorandum supposedly provides that the CAAP board has approved the grant of such incentives provided that it is subject to refund if disallowed by competent authority.
“We further noted that no board resolution was attached to the payments. We have requested verbally and through a letter for a copy of the board resolution, but we were informed that it is still being routed to the honorable board members for their signature. We need the board resolution as it should contain the legal basis of the grant of PEA,” the COA report stated.
State auditors said further verification revealed that no budget was provided for the PEA in the corporate operating budget of CAAP approved by the Department of Budget and Management (DBM) for 2012, which means a violation of Presidential Decree 1445 of the Government Auditing Code of the Philippines.
Also, the audit team found that no tax deductions were made in the payment of PEA which is not in accordance with the National Internal Revenue Code of 1997.
“As stated in the conditions of the DBM approved CAAP corporate operating budget for 2012 and AO No. 103, the payment of the performance enhancement allowance for 2012 shall be subject to the pertinent compensation laws, rules and regulations or only those expressly provided by presidential issuances. Non-submission of the legal basis may render the payment of PEA irregular, therefore subject to disallowance,” the COA report said.
“We recommended that the authority should submit legal basis for the grant of the PEA, proof that budget for PEA was included in the DBM-approved corporate operating budget and submit explanation/justification why such payment was not subjected to tax,” state auditors said.