THE Commission on Audit (COA) issued a notice of disallowance to the payment of Productivity Enhancement Incentive (PEI) of Iloilo provincial government employees last year totaling P102,700,000.
In the Notice of Disallowance dated September 28, 2010 but was made public only yesterday, audit team leader Nilo Castigador cited that the provincial government under the administration of then Gov. Niel Tupas Sr. granted P50,000 per employee as PEI for calendar year 2009 despite the existence of excess in personal service limitation.
Section 325 (a) of Republic Act No. 7160 provides that, “the total appropriations, whether annual or supplemental, for personal services for a local government unit for one fiscal year shall not exceed 45% in the case of the first to third class provinces, cities and municipalities, and 55% in the case of fourth class or lower, of the total income from regular sources realized in the next preceding year.
Department of Budget and Management Local Budget Circular No. 2009-93 dated December 17, 2009 further provides that the funding source for the payment of the productivity enhancement incentive for local government units shall be charged against LGU funds subject to the budgetary conditions and personal services limitation in the LGU budgets pursuant to Section 325(a) of R.A. 7160.
COA stated that in their computation of the provincial government’s adherence to the cited regulations, “we observed that it had exceeded its personal services limitation by P38,701,198.90 prior to the granting of PEI.
COA said the payment of PEI to Capitol employees in 2009 constitutes an irregular and illegal transaction as defined under COA Circular No. 85-55A having violated Section 325(a) of R.A. 7160 and Local Budget Circular No. 2009-93 dated December 17, 2009.
COA directed all the employees who received the 50,000 PEI last year to settle immediately the said disallowance. (ECG/Capitol News)
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