STATE auditors called on the Cebu provincial government to require all its employees to refund nearly P30 million in excess incentives released last year.
In its annual report, the Commission on Audit (COA) stated that the provincial government of Cebu granted Productivity Enhancement Incentives (PEI) to employees at P22,000 or one-month salary, whichever is higher.
COA said this is contrary to the maximum amount of P5,000 for each employee prescribed under Executive Order No. 80, resulting to excessive expenditures of P29.9 million.
“We audited paid payrolls for PEI from October to December last year in the amount of P37,495,095.60,” state auditors said in the report.
The report stated that each employee was paid P22,000 each or one-month salary, whichever is higher, using as basis Appropriation Ordinance No. 014-25 or the 2014 Supplemental Budget No. 3.
Circular
Over 1,500 regular and casual provincial government employees received the bonus last year.
The COA said the PEI given to them reached close to P37.5 million instead of over P7.5 million if based on the P5,000 rate.
The Department of Budget Management (DBM) Budget Circular No. 2013-3, which implements E.O. No. 80, is the governing rule on the payment of the PEI at a maximum of P5,000.
The provincial government said Sec. 9 of the DBM circular applies to the grant of PEI to employees in the local government units at rates to be determined by their respective councils and depending on the local government’s financial capability.
“There is nothing in this particular provision which placed a ceiling of P5,000 to the LGUs unlike in the Executive (Sec. 5), Legislative, Judicary, and other Offices with fiscal autonomy (Sec. 6), and government owned and controlled corporations (GOCCs) and government finance institutions (GFIs),” Capitol Budget Officer Danilo Rodas said.
He said the provincial government gave out PEIs equivalent to one month’s salary after it was awarded the Seal of Good Financial Housekeeping by the Department of Interior and Local Government (DILG).
Last month, the Cebu Provincial Board (PB) approved its third supplemental budget in 2015 to grant P32 million in cash incentives to 1,532 employees.
Rodas said the DBM circular only covers the national government and not LGUs.
“Even the DBM admits that LGUs can give more than P5,000 depending on its capacity,” he told Cebu Daily News over the telephone.