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CEBU CITY, Philippines – The Commission on Audit (COA) has reversed a notice of disallowance it previously issued to Minglanilla Mayor Elanito Peña for exceeding the Productivity Enhancement Incentive (PEI) amounting to P4.8 million which he granted to town officials and employees in 2014.
In a decision promulgated last January 28, 2020, COA granted Peña’s motion to review the notice of disallowance which they imposed and had it reversed and lifted effective immediately.
The order was penned by Commissioners Jose Fabia, Roland Pondoc, and Michael Aguinaldo.
Peña’s disallowance stemmed from an audit observation that noted an excess of P5,000 in the PEI which he granted to qualified town officials and employees.
In March 2015, Minglanilla’s Audit Team Leader (ATL) and the Supervising Auditor (SA) issued disallowance for the release of P4,814,400 in PEI since the amount was already in excess of what was allowed under Executive Order (EO) No. 80.
EO No. 80 sets the guidelines for PEI incentives for government employees while it also grants all government employees a uniform amount of no more than P5,000.
COA in Central Visayas (COA-7) affirmed the ATL and SA observation eight months later or in November 2015.
However, COA’s head office agreed to accommodate Peña’s motion for review even if it was filed after the lapsed of the deadline for his appeal because they found merits in the latter’s motion.
COA agreed on the arguments laid down by the counsel of the town mayor that the decision to release the PEI was anchored on a budget circular issued by the Department of Budget and Management (DBM) and not EO No. 80.
“The petitioners pointed out that under DBM BC Circular No. 2014-3 the rate of PEI is to be determined by the Sanggunian (local government unit). The petitioners averred that they should not be made to refund the excess on P5,000.00 that each qualified government employee was authorized to receive,” said the COA decision.
“As regards the grant of PEI to employees of local government units (LGUs), item 9.0 of DBM BC No. 2014-3 explicitly provides (that they) have the discretion to set the amount of the PEI depending on the LGU financial capability and subject to conditions” it added.
DBM BC Circular No. 2014-3 states that the PEI shall be sourced from the LGU’s funds for a certain fiscal year, subject to the Personal Services limitation in LGU budgets pursuant to Sections 325(a) and 331(b) of R.A. No. 7160.
“In a Certification dated April 21, 2017, the ATL certified that the municipality did not exceed the PS limitation for 2014,” COA said.
Minglanilla is a second-class municipality located approximately 20 kilometers southeast of Cebu City. / dcb