COA junks appeal on disallowed P97M LWUA bonuses, allowances

THE Commission on Audit (COA) has denied the appeal of former Local Water Utilities Administration (LWUA) board chairman Prospero Pichay Jr. and other agency officials for the lifting of three Notices of Disallowance (NDs) issued against various allowances and bonuses totaling P97.42 million paid out in 2009.

COA Commissioners Roland Café Pondoc and Mario G. Lipana upheld the findings of the COA-Corporate Government Sector Cluster B that the Mid-Year Financial Assistance (MYFA) of P23.17 million, Year-End Financial Assistance (YEFA) of P27.4 million, and Anniversary Incentive Bonuses (AIB) totaling P46.85 million were all “illegal expenditures.”

Chairperson Gamaliel A. Cordoba inhibited from the review.

“The SC has ruled that public officials who are directly responsible for, or participated in making the illegal expenditures, and those who actually received the disallowed benefit shall be solidarily liable for their reimbursement,” the commission said.

This means that all LWUA officials who authorized the payout are liable for the net disallowed amount, while employees who only had passive roles will only be required to refund the sum they received as their share of the bonus or allowances.

Records showed that in 2009, the LWUA Board of Trustees adopted Resolution Nos. 72, 627, and 355 approving the payment of the MYFA, YEFA, and AIB, respectively, to all officials and employees, as well as permanent employees of other government agencies detailed with the LWUA.

However, these were disallowed on post audit for lack of legal basis.

LWUA executives defended the extra compensation saying the said allowances and bonuses have been part of tradition and “recognized corporate practice” since 1976 and 1977.

If the COA stops the payout, they argued this will violate the principle of non-diminution of benefits.

The COA Corporate Government Sector however sustained the stand of state auditors that all allowances and compensation were already consolidated under the Compensation and Position Classification Act of 1989 (RA 6758).

Pichay and other LWUA officials elevated the matter before the COA en Banc, reiterating their arguments and invoking good faith to be relieved from