Capitol seeks employees’ consent to deduct excess bonus

Palawan Provincial Capitol (photo by Jarrod Asignacion)

While waiting for the finality of the decision relative to dubious performance enhance incentive bonus of regular capitol employees in 2013, voluntary salary deduction is now being sought by the provincial government of Palawan.

A letter from the Provincial Accountant’s Office is going around the Capitol to get employees’ consent to “voluntarily” allow deduction from their monthly salary as refund of the PEI bonus given to them by the provincial government in 2013. Said bonus was disallowed by the Commission on Audit.

The Accountant’s Office recommends voluntary refund of PEI by executing an Authority to Deduct from the payroll net of the previously withheld taxes. The collected amount will be deposited and kept intact in a Trust Fund Account.

“The deduction will be reasonable and the amount to be deducted on a monthly basis will not bring too much burden to the employees,” the letter says.

Once the issue is resolved favorable to the provincial government, respective deductions from the salary of employees will be immediately refunded. However, if DBM however decides otherwise, the provincial government has established a scheme to collect the excessive payment for PEI.

The Commission on Audit has issued a Notice of Disallowance to the provincial government of Palawan due to unauthorized cash bonuses paid to local government officials and employees in 2013 amounting to P35.338 million.

State auditors said the province violated a Department of Budget and Management (DBM) circular when it released performance enhancement incentives (PEI) worth P40, 000 to all officials and regular employees of the province.

The COA said the DBM only allowed across-the-board P5, 000 PEI.

The report said the excess bonus was approved by the provincial board of Palawan as it passed Resolution No. 10855 on December 17, 2013, allowing P40.38 million of incentives in total.

In its audit report, COA said “Review and verification of the disbursement vouchers and general payrolls covering the payment of PEI for CY 2013 revealed that the said PEI was granted to 1,030 qualified officials and employees resulting to an overpayment of P35.338 million.”

The agency said its general counsel already issued an opinion on December 18 that the maximum amount to be paid for PEI to all classes, without exception, is only P5, 000 and that any amount in excess will be a violation of DBM Budget Circular No. 2013-3 and Executive Order No. 80.

“The law and regulation set the limit of the PEI, which is not exceeding P5, 000 each employee across the board, to ensure that the amount of PEI fixed by the Provincial Board is reasonable and that the expenditure will not adversely affect the operation of the LGU. We recommended that the recipient official and employees refund the total amount of P35, 228,000 in excess of the authorized amount,” the COA added.
The Palawan provincial government defended its decision to release P40, 000 PEI to all employees and officials saying “local government units have fiscal autonomy and that the release cannot be considered unwarranted.”
The provincial government said LGUs are required to source the PEI from available savings in their budget, as long as approved by the provincial board, citing the DBM Circular.

It maintained the PEI was the employees’ reward “for their efforts in the dispensation of public service.”
In an interview of Palawan News with Board Member Leoncio Ola, chair of the Committee on Appropriations in the Provincial Board he said that their decision was based on the guidelines issued by DBM.

“We will exhaust any legal remedy para hindi naman masyadong madehado ang mga empleyado natin,” Ola said.
Ola cited DBM circular 2013-3, section 9 which states that ‘LGU employees, including those in barangay governments who are compensated through monthly honoraria, may be granted the one-time PEl for FY 2013, at rates determined by the respective sanggunian, depending on the LGU financial capability, and subject to the following conditions: (9.1) The PEl shall be charged against LGU funds for FY 2013, subject to the Personnel Services limitation in LGU budgets pursuant to Sections 325(a) and 331(b) of R.A. No. 7160.; (9.2) The conditions/guidelines on the grant of the PEl under sub-item 5.2 of this Circular shall be adhered to.’

The guidelines further states that LGU shall exercise prudence in the use of local funds. In determining the amount of the PEl, the sanggunian shall ensure that the same is reasonable and that the expenditure will not, in any way, adversely affect the delivery of services to the public.

According to Ola they might elevate the issue to the Office of the President to seek proper interpretation on said guidelines.

The Provincial Legal Office of Palawan already filed a motion for reconsideration and they are being given 6 months to justify such action.

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