Town workers’ incentive was ‘too much’

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Wednesday, May 28, 2014

STATE auditors told the Municipal Government of Balamban to direct 175 town officials and employees to return a portion of the performance incentive they received last year, totaling P5 million.

The Commission on Audit (COA) noted that the Municipal Government violated government rules and regulations when it granted excessive productivity enhancement incentive (PEI) to officials and employees.

An employee is allowed to receive a maximum of P5,000 in PEI, but the local government gave each employee more than the allowed amount, which resulted to “irregular and excessive disbursement of government funds amounting to P5.077 million.”


“We recommend that all concerned officials and employees be directed to refund the amount in excess of the P5,000.00 of PEI received. Otherwise, all those who authorized the payment thereof shall be held personally liable,” the auditor said in the report on the town’s transactions in 2013.

In its Audit Observation Memorandum, the COA stated that the excessive disbursement of public funds violated Executive Order No. 80 issued by President Aquino.

EO 80 aimed to motivate higher performance and greater accountability in the government sector and ensure accomplishment commitments and targets.

Section 1 of EO 80 directed the adoption of the Performance-Based Incentive System for government personnel, with a fixed P5,000 PEI to be granted across-the-board, in
accordance with the guidelines of the Department of Budget and Management (DBM).

And because the PEI granted by the Balamban Municipal Government amounted to P5,957,561.50, its total disbursement for the PEI exceeded by P5,077,561.50.

The COA noted that there were 175 payees whose PEIs were claimed by Mayor Ace Stefan Binghay, Vice Mayor Rosario Binghay, Adonis de Pio and Lucina Milan.

There were 68 payees listed under Mayor Binghay with a total claimed amount of P2,292,614. Only P340,000 is allowed by law, thus a disallowance by COA in the amount of P1,952,614.

Vice Mayor Binghay had 24 payees listed under her name with a total of P1,001,983.50.

Only P120,000 is allowed by law, resulting in a disallowance of P881,983.50.

De Pio had 47 payees under his name with a total claimed amount of P1,482,619. The maximum amount allowed is only P235,000, that is why he has a disallowance of P1,247,619.

Milan has 36 payees under her name with a total claim of P1,180,345. Only P180,000 is allowed by law, thus a disallowance in the amount of P1000,345.50.

A notice of disallowance was sent to the concerned officials last Feb. 26.

In its reply, the Balamban Municipal Government maintained that the granting of PEI was within the capacity of the municipality in accordance with EO 80 and its implementing rules, the DBM Budget Circular 2013-3.

It provides that LGU employees, including those in barangay governments who are compensated through monthly honoraria, may be granted the one-time PEI for FY (fiscal year) 2013, at rates determined by the respective sanggunian, depending on their length of service and the LGU’s financial capability.

COA told local officials to comply with government rules in granting incentives to avoid disallowances in the future.

“Henceforth, in payment of personnel incentives and similar allowances, strict compliance with the provisions of applicable Executive Order as may be implemented by pertinent Budget Circular and other laws is enjoined to avoid personal liability,” the auditor said.

Published in the Sun.Star Cebu newspaper on May 29, 2014.

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