COA orders 5 SEC officials to refund P92 million in illegal pay hikes

MANILA, Philippines – The Commission on Audit (COA) affirmed the notice of disallowance against Securities and Exchange Commission (SEC) officials and ordered them to refund P92.74 million worth of illegal pay increases to agency personnel in 2012.

The COA Commission Proper, in a decision released January 6, affirmed a September 14, 2014, notice of disallowance and a June 14, 2016, ruling of the agency’s National Government Sector-Cluster 2 that held the following SEC officials liable for the illegal expenditure:

• Former chairperson Teresita Herbosa 
• Former commissioner Eladio Jala
• Financial Management Division Director Adelaida Navarro Banaria
• Former Budget Division head Thoureth dela Cruz
• Former Accounting Division head Renato Santos

The COA in its ruling denied the SEC’s petition for review, which sought the reversal of the 2016 ruling and the lifting of the disallowance. But COA exempted, based on good faith, other SEC executives and employees for being passive recipients of the increases.

“Public officials who are directly responsible for or participated in making the illegal expenditures shall be solidarily liable for their reimbursement,” the COA said.

State auditors had disallowed the increases in February 2013, citing the lack of approval from the Office of the President. It also questioned the way SEC used its retention income for the wage adjustment when, according to rules, the funds should be used to augment SEC’s maintenance and other operating expenses as well its capital outlay.

In response, the SEC claimed that it had assurances from the Department of Budget and Management (DBM) that favorable recommendations were made to the Office of the President for the approval of the increases.

The COA still issued a notice of suspension in September 2013, pending submission of the Office of the President’s approval and a written authority from the DBM to use the retention income for the salary increases.

The SEC was granted a 90-day extension in January 2014, but the COA later issued a notice of disallowance after the approval from the Office of the President was never submitted despite the extension.

The COA also referred the case to the Office of the Ombudsman.

“In view of the apparent violation of laws, this case should be referred to the Office of the Ombudsman for investigation and filing of appropriate charges for technical malversation and/or other offenses, if warranted, against the officials responsible,” the COA said. – Rappler.com