State auditors serve second disallowance notice to MCWD

The Metropolitan Cebu Water District (MCWD) will receive a second notice of disallowance from the Commission on Audit (COA) for giving their employees P86.15 million worth of allowances and benefits.

Online news website Rappler.com reported that  the notice of disallowance was the second one received by MCWD in three years.

In response, the MCWD in a  press  statement said it had yet to receive a copy of the May 27 COA audit report.

“It is also awaiting COA’s resolution of the motion for reconsideration the MCWD filed recently on some of the benefits mentioned,” the water district said.

The COA said the allowances and benefits were “without legal basis.”

Transactions

“I think the board (of directors) is aware of this,” Charmaine Rodriguez-Kara, MCWD spokesperson said.

Renato Mercado, MCWD board  chairman and board secretary Jocelyn Pesquera are in Scotland  attending  a World Water Congress.

In a phone interview, Kara said the MCWD gets an audit observation memorandum from COA before being issued a notice of disallowance.

In a review of  MCWD’s transactions, COA said the water district’s biggest release of P86.15 million was given  out as “various allowances and benefits” to  their employees.

The amount includes  corporate performance incentive bonuses worth P38.965 million; rice and housing allowance of P13.8 million; school opening bonus of P12.3 million; medicines and hospitalization benefits of P12.25 million; and P8.03 million in utility allowance.

The COA report that was released last May 27 stated that “these allowances are not authorized under the Senate and House of Representatives Joint Resolution No. 4 duly approved by the President of the Philippines on June 17, 2009.”

Resolution

The water district still has to comply with the audit recommendation from the year before which disallowed similar allowances totaling P182.86 million between 2010 and 2012.

MCWD has a pending appeal before the COA that sought the lifting of the previous notice of disallowance.

Eng. Ernie Delco, MCWD general manager, confirmed in recent interviews that he will continue giving out incentives to employees this year pending the resolution of the appeal.

In its motion, MCWD said  it had legal basis  when it gave out bonuses to employees in previous years.

Aside from these disbursements, state auditors found P2.806 million were given as honoraria to MCWD’s Bids and Awards Committee and its Technical Working Group, amounts that exceeded  rates allowed by the Department of Budget Management (DBM).

COA also questioned the water district’s policy that gave employees “graduated leave” of up to 40 days each year, not counting another eight days of emergency or special leaves in a year.

MCWD paid substantial amounts for the counterpart contribution to the Provident Fund of its board of directors, even if they were not supposed to under current rules.

These were in addition to the P632,187.00 granted to the board directors as “various benefits” including hospital bills assistance, corporate performance incentives, performance based bonus, collective negotiation agreement incentive and cost economy measure award.