COA upholds disallowance of P84M given to Davao water district workers

The Commission on Audit (COA) has upheld the disallowance notices issued in 2016 for the more than P84 million in service separation pay (SSP) given to Davao City Water District (DCWD) officials and employees. 

Yet, the COA also decided that those responsible don’t have to return the money due to “social justice and humanitarian considerations.”

The COA noted that the water district’s board sought guidance from the Department of Budget and Management (DBM) and the Office of the Government Corporate Counsel (OGCC), both of which approved the action. Based on that, the Commission said the action was done in good faith.

It pointed out that the OGCC and DBM greenlit the provision of such benefits to DCWD employees who were hired before December 31, 1999. 

The COA said, “It is a badge of good faith in favor of the officials of DCWD and want of malicious disregard of the prevailing rules. Absent any showing of bad faith or malice, public officers are not personally liable for damages resulting from the performance of official duties.”

COA Chairman Gamaliel Cordoba and commissioners Roland Café Pondoc and Mario  Lipana believe that asking the DCWD personnel to repay the funds they received in good faith would cause unjust harm.

In 2014, 96 DCWD employees received payments, but the audit team issued disallowance notices based on the Supreme Court’s ruling that water districts are government-owned and controlled corporations (GOCCs) in the case of Baguio City Water District vs. Trajano. 

Being a GOCC, it falls under the Government Service Insurance System (GSIS) Law (RA 8291) and Commonwealth Act No. 186, which forbid separate insurance or retirement plans for its officers and employees.

The COA stated, “Clearly, CA No. 186 was already enforced as to bar DCWD from creating its own retirement plan other than the retirement package under the GSIS. Employees who retired or qualified to retire are covered by the provision on Exclusiveness of Benefits under the GSIS Law.”

The Commission said it was irregular and unlawful to give such benefits to employees through a board resolution, citing the SC’s decision as the underlying reason. – Rappler.com