COA hits Cebu water provider over P90M ‘illegal’ perks

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COA hits Cebu water provider over P90M ‘illegal’ perks
According to state auditors, Metro Cebu Water District employees gave themselves 'illegal' allowances, bonuses and other incentives

MANILA, Philippines – Things are getting even hotter in Cebu City.

The Commission on Audit (COA) report released on May 27 revealed that Metro Cebu Water District (MCWD) employees had gave themselves “fat” allowances, bonuses and other alleged incentives “without legal basis” totaling about P90 million as of December 2013.

The city is already under a state of calamity due to severe water shortage.

The biggest payout, according to state auditors, was P86.15 million for “various allowances and benefits.”

Some of these benefits included an incentive bonus of P38.965 million; rice and housing allowance, P38.965 million; school opening bonus, P12.3 million; medicines and hospitalization benefits, P12.25 million; and P8.03 million in utility allowance.

“These allowances are not authorized under the Senate and House of Representatives Joint resolution No. 4 duly approved by the President of the Philippines on June 17, 2009. This means the Water District has incurred expenditures without legal basis,” the COA report said.

The MCWD has yet to comply with the audit recommendation from the year before which disallowed similar alowances totaling P182.86 million between 2010 and 2012.

The MCWD has a pending appeal at the COA, seeking the lifting of the notice of disallowance. While the issue of allowances are unresolved, the distribution of incentives continue.

In addition to these payouts, the COA found that P2.806 million was handed out as honoraria to MCWD’s Bids and Awards Committee and the Technical Working Group – way above the rates allowed by the Department of Budget Management.

COA warned: “All honoraria payments…shall first be issued notices of suspension as there are no documents in the voucher that will show the number of successfully completed projects. A notice of disallowance shall be issued when necessary.”

Aside from the bonuses, COA questioned the MCWD policy that gave employees “graduated leave” of up to 40 days each year, not counting another 8 days of emergency or special leaves in a year.

A COA spokesperson said these benefits increased the operational costs of the water provider.

The MCWD paid high amounts for the counterpart contribution to the Provident Fund of its board of directors, even if they were not supposed to under current rules.

These contributions were in addition to the P632,187 paid to the board directors as “various benefits” including hospital bills assistance, corporate performance incentives, performance based bonus, collective negotiation agreement incentive, and cost economy measure award.

COA clarified that this disbursement was barred under Section 3 of Executive Order No. 65 which prescribed the rate of compensation for the board of directors of local water districts. –

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