MANILA, Philippines – The Commission on Audit (COA) ordered the National Power Corporation (Napocor) to return to the treasury P29.715 million worth of health and wellness allowances given to officials and employees in 2010.

In a resolution promulgated on February 16 and released to media on Wednesday, March 8, COA affirmed its earlier decision saying the allowances were released without the required authorization from the Office of the President (OP).

The cash perks, under the Employee Health and Wellness Program and Related Financial Assistance (EHWPRFA), were given in varying amounts to employees, officials, and members of the Board of Directors (BOD) depending on the status and date of their employment.

COA said the perks were unlawful, citing Memorandum Order No. 20, series of 2001, which suspended the granting of increased benefits to employees of government-owned and controlled institutions (GOCCs).

The memorandum also states that any increase in salary or compensation of GOCC employees shall be subject to the approval of the President.

COA first issued a notice of disallowance in 2011. But Napocor appealed twice, arguing that the suspension of additional compensation did not apply to the EHWPRFA because it was just an extension of the Napocor’s Star Program.

In its latest decision, COA rejected that argument, saying that the EHWPRFA was a new benefit because it was given in cash while the Star Program was given through non-cash grants such as free laboratory examinations and checkups.

“Whether the EHWPRFA was a new benefit or an extension or addition to an existing benefit, the grant and payment thereof still needed to comply with the requirements under Section 6 of Presidential Decree (PD) No. 1597,” COA added, referring to the law which says additional benefits should be approved by the President.

Napocor countered that the approval of the benefits by the directors is equivalent to presidential approval because the Napocor BOD is composed of Cabinet secretaries who are considered alter egos of the President.

COA said, however, that the interpretation is erroneous. “Although some of the members of the BOD of Napocor are Cabinet members appointed by the President, they were not acting as such but as mere responsible BOD members when they approved the resolution granting EHWPRFA.”

COA reiterated that the Napocor BOD is liable for the disallowed perks, along with the recipients. – Rappler.com