DBP officials ordered to return P171-M in 'disallowed' funds

ABS-CBN News

Posted at Jan 29 2013 07:13 PM | Updated as of Jan 30 2013 03:13 AM

MANILA, Philippines - The Commission on Audit (COA) wants officials and employees of the Development Bank of the Philippines to return P170.89 million in disallowed funds.

The COA issued a 10-page decision, junking the petition of the DBP asking for a recall of the Notice of Disallowance issued by the COA-Fraud Audit and Investigation Office (FAIO) in 2006.
 
The ruling was signed by COA chairperson Ma. Gracia M. Pulido-Tan and Commissioners Juanito G. Espino Jr. and Heidi L. Mendoza.

The P170.89 million in question was a "one-time grant" called Governance Forum Productivity Award approved by the DBP board of directors.

The GFPA was supposed to help "achieve industrial peace" amid a labor dispute between the bank and its employees over allowances.
 
However, a special audit team found the grant of the GFPA had no legal basis since it was a "compromise agreement."

The COA-FAIO affirmed this, issuing a separate decision onOctober 7, 2010, saying the DBP board's power to set the remuneration and other emoluments of the bank's executives and employees was not absolute but subject to existing rules and regulations.
 
"Matters relating to salaries, wages, allowances and benefits of employees in the public sector cannot be a valid subject of a compromise agreement or negotiation because these are governed and fixed by laws. To concede, the act of the BOD of entering into a compromise agreement to appease the employees' demands is a clear exercise of abuse of discretion," the Commission said.

Even though the DBP management said it was in good faith when employees and officials received the money, the COA said this does not exempt them from any liability.