COA tells Dureza, 5 others to return P996,000 to gov't

Carolyn Bonquin, ABS-CBN News

Posted at Jan 20 2017 02:07 PM

File photo: Jesus Dureza

MANILA – The Commission on Audit (COA) has affirmed its ruling asking Presidential Adviser on Peace Process Secretary Jesus Dureza and five others to return funds released for food assistance and allowances for employees over a decade ago.

Dureza and five executives of the Mindanao Economic Development Council (MEDCo), now the Mindanao Development Authority (MinDA), were directed to return a total of P996,000 in disallowed payments for Staple Food Assistance and Amelioration Allowance.

Under Dureza's chairmanship, MEDCo released P456,000 for staple food assistance, and P540,000 to officials and employees between 2001 and 2004.

However, a 2005 audit on MEDCo issued a notice of disallowance pertaining to the said incentives. COA said the release of funds had no legal basis, as it lacked approval from the Office of the President and the Department of Budget and Management.

In a decision dated December 27, 2016, which was only released to media this week, COA partially granted MEDCo's petition for review. 

COA excluded MEDCo's rank-and-file employees from refunding the allowances they received. However, MEDCo officers who approved the payment and certified that the release of funds were asked to return the full amount.

Aside from Dureza, the other approving officers mentioned by COA were Assistant Secretary Eufemia Calderon, MEDCo vice chairperson; Corazon Ginete, director of administration and finance; and Perla Pandan, administrative officer.

"The Commission rules that government officials and employees who unwittingly received disallowed benefits or allowances are not liable for their reimbursements if there is no finding of bad faith. Public officials who are directly responsible for, or participated in making the illegal expenditures, shall be solidarily liable for the reimbursement," COA said in the decision.

As cited by the COA, DBM Budget Circular No. 16 provides that "All agencies are hereby prohibited from granting any food, rice, gift checks and any other form of incentives/allowances except those via Administrative Officer by the Office of the President."

Meanwhile, Republic Act 6758 or the Compensation and Position Classification Act of 1989 states that all allowances are determined by the standardized salary rates. Only the following allowances are exempted: representation and transportation allowances; subsistence allowance of marine officers and crew on board government vessels and hospital personnel; hazard pay; allowances of foreign service personnel stationed abroad; and other compensation determined by the DBM.

In a statement, Dureza said that as the sole approving authority, he takes full responsibility for the disallowed payments for MEDCo employees. Dureza said he already returned the allowances he received, and will refund the remaining amount upon his return from the peace talks in Rome.

Dureza said the staple food assistance and amelioration allowances were given during the Christmas season "to augment their meager pay and to give them incentives for a year's good performance."

Dureza said then finance division head Perla Pandan and the executive committee officials assured him that the release of allowances was allowed under the rules.

"I asked what would be the consequence if this was later disallowed by COA, I was told all the recipients had to return what they received. I was told this was communicated to the whole staff. In fact, I now recall I even directed the finance division to get a written undertaking from the employees that they would return the amount they received if later on required to do so," Dureza said.

MEDCo was created in 1992 through an executive order issued under then president Corazon Aquino, and operationalized by her successor Fidel Ramos to boost the socio-economic development of Mindanao.

It was transitioned to MinDA during former president Gloria Macapagal Arroyo’s term in 2010.