Commission on Audit

COA upholds disallowance of P664 million in cash perks for PEZA personnel

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COA upholds disallowance of P664 million in cash perks for PEZA personnel

Graphics by Alyssa Arizabal/Rappler

State auditors say the increase in cash perks for PEZA personnel from 2009 to 2012 did not have prior approval from the Office of the President

MANILA, Philippines – The Commission on Audit (COA) threw out the appeal filed by Philippine Economic Zone Authority (PEZA) officials, which sought to challenge the 112 notices of disallowance (NDs) against their cash benefits totaling P664.36 million.

The COA’s three-member en banc said the junked motion for reconsideration raised grounds that were a “mere rehash” of arguments that the COA Commission Proper already rejected in its 2018 ruling.

The illegal cash perks were a result of a PEZA Board resolution passed in 2009, which state auditors said did not have prior approval from the Office of the President.

Among those flagged by COA were:

  • P171.85 million in unauthorized salary increase, representation and transportation allowances (RATA), overtime pay, and monetized leave credits for PEZA head office personnel from July 2010 to December 2011
  • P93.15 million in pay increase, RATA, overtime pay, and monetized leave credits from January to December 2012
  • P92.28 million in salary hike, 13th month pay, and anniversary bonus from July 2009 to May 2010

A breakdown of the illegal perks that the head office and other economic zones disbursed is as follows:

  • PEZA head office: eight NDs for P454.66 million
  • Baguio City Economic Zone: 21 NDs for P54.73 million
  • Cavite Economic Zone: 17 NDs for P79.33 million
  • Mactan Economic Zone: 66 NDs for P75.65 million

Citing a Supreme Court (SC) ruling, COA said even passive recipients of the disallowed cash benefits must refund the amount they received. An earlier ruling exempted rank-and-file personnel from refunding the compensation and benefit adjustments they received.

“In Madera vs. COA, the SC clarified that the principles of unjust enrichment and solutio indebiti apply regardless of the good faith of passive recipients. The payees are liable to refund the amounts they received. Although they committed no fraud in obtaining these benefits, it is against equity and good conscience for them to continue holding on to them,” the COA explained.

State auditors, however, repeated that only high-ranking agency officials with approving and certifying authority must refund the P664.36 million in illegal cash perks, but minus the amount that will be recovered from refunds of employees. –

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