COA Circular No. 2013-003

(NAR) VOL. 24 NO. 1 / JANUARY - MARCH 2013

[ COA CIRCULAR NO. 2013-003, January 30, 2013 ]

REITERATION OF AUDIT DISALLOWANCE OF PAYMENTS WITHOUT LEGAL BASIS OF ALLOWANCES, INCENTIVES, AND OTHER BENEFITS OF GOVERNMENT OFFICIALS AND EMPLOYEES IN THE NGAs, LGUs, AND GOCCs AND THEIR SUBSIDIARIES

I. Purpose This Circular is issued to ensure that all payments of allowances, incentives, and other benefits to all officials and employees of NGAs, LGUs, and GOCCs and their subsidiaries shall be based on and conform strictly with laws, rules and regulations granting or authorizing such payments. Hence, it is reiterated that, all such payments without legal basis shall be disallowed in audit by this Commission.

II. Entitlement to Allowances, Incentives, and Other Benefits Government officials and employees shall be entitled only to allowances, incentives, and other benefits expressly provided by law, and other statutory authority, and the rules and regulations promulgated by competent authority.

III. Allowances and Benefits Generally Applicable to Agencies Which Are Covered by Republic Act (RA) No. 6758, The Salary Standardization Law (SSL) Below is the list of the allowances, incentives and other benefits commonly granted to officials and employees of agencies covered by the SSL, together with the legal authority for the payment thereof and the corresponding rates: Allowance/Benefit Legal Basis Amount/Rate Personnel Section 39, General P2,000.00 per month Economic Relief Provisions, 2012 and Allowance (PERA) 2013 General Appropriations Acts (GAAs) and corresponding Section of subsequent years’ GAAs Representation Section 45, General As indicated in Section Allowance and Provisions, 2012 and 45, General Provisions, Transportation 2013 GAAs and 2012 and 2013 GAAs, Allowance (RATA) corresponding Section of and in the applicable subsequent years’ GAAs provisions of subsequentyears’ GAAs; Rates for officials of LGUs are provided in Local Budget Circular (LBC) No. 84 dated April 13, 2007 Extraordinary and Section 23, General As indicated in Section 23, Miscellaneous Provisions, 2012 and 2013 General Provisions, 2012 Expenses (EME) GAAs and corresponding and 2013 GAAs, and in the Section of subsequent applicable provisions of years’ GAAs subsequent years’ GAAs Productivity Department of Budget and P2,500.00 or P2,000.00 Incentive Benefit Management (DBM) depending on the (PIB) National Compensation performance rating of the Circular (NCC) No. 73 employee dated December 27, 1994; DBM NCC No. 73-A dated March 1, 1995; DBM Circular Letter Nos. 3- 96 dated January 15, 1996, 2001-6 dated March 2, 2001, and 2002-3 dated January 2, 2002 Uniform/Clothing Section 40, General P5,000.00 per year; may Allowance Provisions, 2012 and 2013 vary GAAs and corresponding Section of subsequent years’ GAAs; DBM Budget Circular (BC) No. 2012-1 dated February 23, 2012 Loyalty Cash Section 7, Rule X, 10 th year – P5,000.00 Award (LCA) Omnibus Rules of the th 15 year – 3,000.00 Civil Service Commission th 20 year – 3,500.00 (CSC); DBM Department th Order No. 92-10 dated 25 year – 4,000.00 October 1, 1992; CSC 30 th year – 5,000.00 Memorandum Circular th 35 year - 7,500.00 No. 6, s. 2002 th 40 year – 10,000.00 Travelling Executive Order (E.O.) P800.00 per day for travel Allowances for Nos. 248 and 248-A, s. outside 50 km. radius Domestic Travels 1995, as amended by E.O from Metropolitan Manila No. 298, s. 2004 or official station; P400.00 per day for travel within 50 km. radius from Metropolitan Manila Travelling Same Daily Subsistence Allowances for Allowance (Rates are Foreign Travels based on United Nations Development Program (UNDP) Index) Pre- Departure Expenses – P1,500.00 ClothingAllowance - $400.00 (suspended under Office of the President Memorandum Circular No. 52 dated October 2, 2003) Representation Expenses - $1,000.00 Costume or Section 25, General P1,500.00 per employee – Uniform, and Provisions, 2012 and participant per year Other Expenses 2013 GAAs and Related to corresponding Section of Cultural and subsequent years’ GAAs Athletic Activities Magna Carta RA No. 7305 and its Hazard Allowance – 25% Benefits for Public Revised Implementing of the monthly basic Health Workers Rules and Regulations salary for salary grade 19 (IRR) and below; 5% for salary grade 20 and above Longevity Pay 5% of monthly basic pay Subsistence Allowance – three (3) meals a day Laundry Allowance – P150.00 per month Medico-Legal Allowance – P200.00 for slight physical injury; P300.00 for less serious physical injury; P500.00 for serious physical injury; P1,000.00 for necropsy; P1,000.00 for autopsy; P600.00 per court appearance; P20,000.00 one time relocation allowance Remote Assignment Allowance – 50% of basic pay Benefits for Science RA No. 8439 and its IRR, Share in Royalties and Technology as amended 60%-40% basis in favor of Personnel the Government and the personnel involved in the technology/activity Hazard Allowance – 15% of monthly basic salary for personnel indirectly exposed to hazard, 30% of monthly basic salary for personnel directly exposed to hazard Subsistence Allowance – three (3) meals a day or P150.00 per day Laundry Allowance – P500.00/monthHousing and Quarters Allowance Longevity Pay – 5% of the monthly basic salary for every five (5) years of continuous and meritorious service Medical Examination Special Counsel Section 42, Special Section 42, Special Allowance Provisions, 2012 and 2013 Provisions, 2012 and 2013 GAAs and applicable GAAs and applicable provision of subsequent provision of subsequent years’ GAAs years’ GAAs P1,000.00 (2012 GAA); P1,250.00 (2013 GAA) per appearance or attendance of hearing, but not exceeding P4,000.00 (2012 GAA); P5,000.00 (2013 GAA) per month Hazard Duty Pay Section 43, General 1 to 7 days p P400.00 Provisions, 2012 and 8 to 14 days – P500.00 2013 GAAs and 15 or more days – P600.00 applicable provision of subsequent years’ GAAs; DBM Budget Circular (BC) No. 2005-4 dated July 13, 2005 Honorarium Section 44, General For assignment in Provisions, 2012 and 2013 government special GAAs and applicable projects, amount is provision of subsequent computed based on the years’ GAAs guidelines prescribed in DBM BC No. 2007-2 dated October 1, 2007. For lecturers, resource persons, coordinators and facilitators, amount is computed based on formula prescribed in DBM BC No. 2007-1 dated April 23, 2007. For ex-officio chairs, vicechairs and members, and private sector representatives of governing boards of commissions, boards, councils and other similar entities of NGAs and GOCCs, covered by SSL, amount is computed based on guidelines inDBM National Budget Circular (NBC) No. 2007- 510 dated May 8, 2007 Mid-Year and Year- RA No. 6686, as amended One month basic salary and End Bonus and by RA No. 8441 additional Cash Gift of Cash Gift P5,000.00 Collective Administrative Order No. Variable, depending on Negotiation 135 dated December 27, savings generated by reason Agreement (CNA) 2005; Section 3(b), Public of cost-saving measures Sector Labor-Management introduced by the CNA Council (PSLMC) Resolution No. 4, s. 2002 Other allowances not listed above, whether granted government-wide or specific to certain government agencies are likewise recognized provided there is sufficient legal basis.

IV. Allowances and Benefits of Officials and Employees of Agencies Which Are Not Covered by the SSL In addition to the foregoing list of allowances and benefits, officials and employees of agencies exempt from the SSL may be paid other allowances and benefits, subject to the following:

1. Prior approval by the Office of the President as required under Presidential Decree (P.D.) No. 1597, “Further Rationalizing the System of Compensation and Position Classification in the National Government,” viz.:

Sec. 5. Allowances, Honoraria, and Other Fringe Benefits. - Allowances, honoraria and other fringe benefits which may be granted to government employees, whether payable by their respective offices or by other agencies of government shall be subject to the approval of the President upon recommendation of the [Secretary of the Department of Budget and Management]. For this purpose, the [Secretary of the Department of Budget and Management] shall review on a continuing basis and shall prepare, for the consideration and approval of the President, policies and levels of allowances and other fringe benefits applicable to government personnel, including honoraria or other forms of compensation for participation in projects which are authorized to pay additional compensation.

Sec. 6. Exemptions from OCPC [Office of Compensation and Position Classification] Rules and Regulations. - Agencies positions, or groups of officials and employees of the national government, including government-owned or controlled corporations, who are hereafter exempted by law from OCPC coverage, shall observe such guidelines and policies as may be issued by the President, governing position classification, salary rates, levels of allowances, project and other honoraria, overtime rates, and other forms of compensation and fringe benefits. Exemptions notwithstanding, agencies shall report to the President, through the [Department of Budget and Management], on theirposition classification and compensation plans, policies, rates and other related details following such specifications as may be prescribed by the President.

2. Limitations Imposed by RA No. 10149 on Covered GOCCs, and their subsidiaries GOCCs and other government instrumentalities covered by RA No. 10149, the GOCC Governance Act of 2011, are likewise enjoined to strictly comply with the provisions of Sections 10 and 23 thereof, with respect to the grant of additional incentives of certain position titles and the per diems and incentives of the members of the Board of Directors and Trustees, as follows:

Section 10. Additional Incentives. - The GCG [Governance Commission for Government-Owned or -Controlled Corporations] may recommend to the President, incentives for certain position titles in consideration of the good performance of the GOCC: Provided, That no incentives shall be granted unless the GOCC has fully paid all taxes for which it is liable, and the GOCC has declared and paid all the dividends required to be paid under its charter or any other laws.

Section 23. Limits to Compensation, Per Diems, Allowances and Incentives. - The charters of each of the GOCCs to the contrary notwithstanding, the compensation, per diems, allowances and incentives of the members of the Board of Directors/Trustees of the GOCCs shall be determined by the GCG using as a reference, among others, Executive Order No. 24 dated February 10, 2011: Provided, however, That Directors/Trustees shall not be entitled to retirement benefits as such directors/trustees. In case of GOCCs organized solely for the promotion of social welfare and the common good without regard to profit, the total yearly per diems and incentives in the aggregate which the members of the Board of such GOCCs may receive shall be determined by the President upon the recommendation of the GCG based on the achievement by such GOCC of its performance targets.

3. Specific authority from the agency charter or other statutory provisions.

V. Audit Action by the COA Auditor All COA Auditors are directed to disallow in audit all payments of allowances, incentives and other fringe benefits to all government officials and employees which have no legal basis and do not conform strictly with the laws, rules and regulations granting or authorizing such payments.

VI. Repealing Clause All issuances inconsistent herewith are hereby repealed or amended accordingly.

VII. EffectivityThis Circular shall take effect fifteen (15) days after publication in newspapers of general circulation.

(SGD.) MA. GRACIA M. PULIDO TAN Chairperson

(SGD.) JUANITO G. ESPINO, JR. (SGD.) HEIDI L. MENDOZA Commissioner Commissioner