Calida received P7M in excess allowances in 2017 – COA
MANILA, Philippines (UPDATED) – Solicitor General Jose Calida received P7.46 million in excess allowances in 2017, according to the report of the Commission on Audit (COA).
Calida received a total of P8.37 million in allowances in 2017, but the COA considered the P7.46 million as excess because it was more than 50% of his annual salary, according to the 2017 audit report of the Office of the Solicitor General (OSG) released Thursday night, May 31.
"We recommended that management refund the excess amount received and deposit the same to the OSG Trust Fund," the COA said.
Context. Receiving allowances is allowed by Republic Act 9417 or the OSG law. It is also a common practice.
What state auditors are flagging is the amount in excess. COA Circular No. 85-25-E states that allowances should not exceed 50% of the annual salary.
As solicitor general, Calida’s annual salary is P1.827 million, which means his allowances should not exceed P913,950.
In 2016, Calida, who served in the second half of the year, also received P1.123 million in excess allowances. His predecessor, Florin Hilbay, received P4.6 million in excess for the first 6 months of 2016.
Past audit reports showed that aside from Calida and Hilbay, former solicitor general Francis Jardeleza was also flagged for excess allowances in 2012, amounting to P1 million.
Legal arguments. In 2016, both Calida and Hilbay had the same defense for their excess allowances – that the OSG law allows them to receive the allowances and that COA "cannot countermand an act of Congress."
Section 8, RA 9417
SEC. 8. Other benefits. - Consistent with the provisions of Executive Order No. 292, otherwise known as the Revised Administrative Code of 1987, the legal staff of the Office of the Solicitor General are allowed to receive honoraria and allowances from client departments, agencies, and instumentalities of the Government.
For the 2017 allowances, OSG invoked Presidential Decree No. 478 and Executive Order No. 292 which “authorize the OSG lawyers to receive allowances and honoraria for the legal services they render without qualification, in addition to their regular compensation.”
"It's an old, recurring issue between OSG and COA,” Hilbay said last year.
COA, however, was apparently firm in its stand on the issue as it revealed that it already issued notices of disallowance against these excess allowances.
“It is axiomatic on this jurisprudence that when a general grant of power is conferred or duty is enjoined, every particular power necessary for the exercise of the one or the performance of the other is also conferred,” COA said.
Calida refuted COA saying: "It is a settled rule that an administrative circular cannot amend or repeal a provision of law."
Notices of Disallowance from 2014 and 2016 are currently on appeal before the commission, COA said. A new Notice of Disallowance for 2018 was also issued.
"The OSG has appealed the disallowances brought about by the unlawful implementation of COA Circular No. 85-25-E. There is no final ruling yet on this appeal," Calida said.
COA said that pending the appeals, the OSG officials should turn over the excess to the account of the office “and could be earmarked and be given to the concerned officials and employees when a decision favorable to them will become final and executory.”
How were these allowances paid? Based on the audit report, the allowances were paid either through the Financial Management Service (FMS) or directly from the clients to the lawyers.
COA said that OSG has its own circulars from 2009 and 2012 that require officials to report to the FMS allowances that they receive for purposes of tax deduction.
“The failure of the OSG employees to report the allowances directly given to them by client agencies provides no assurance that the correct taxes were indeed withheld or no taxes were withheld at all,” state auditors said.
Calida received P1.524 million of his allowances directly.
Client agencies such as the Development Bank of the Philippines, Occidental Mindoro State College, and Central Bank Board of Liquidators told OSG that they withheld tax from the allowances they paid directly to officials.
COA, however, said that the taxes withheld were not enough.
“The confirmation received from client agencies also revealed that the taxes withheld were not sufficient. These cases should not have happened had the receipt of honoraria/allowances were reported to the OSG through FMS and the correct withholding taxes have been deducted in compliance with BIR Regulation No. 10-2008 dated July 10, 2008," it said.
Calida is currently embroiled in a controversy over P261.39 million worth of government contracts that his family-owned security firm bagged during his incumbency at the OSG. Calida has stressed he will neither divest his majority shares from the company, nor resign as solicitor general. – Rappler.com