The Commission on Audit (COA) has held the officials of the Mabalacat City Water District (MCWD) in Pampanga liable for the more than P27 million disbursed “without legal basis” for allowances and benefits of its officers and employees in 2012 and 2013.
"The power of the MCWD BOD (board of directors) to issue BRs (board resolutions) granting several allowances and benefits is not a blanket authority that exempts the agency from the review of the President. In this case, the lack of Presidential approval renders the disbursements without legal basis," COA ruled.
The MCWD BOD issued several BRs granting various allowance and benefits to its officers and employees of amounting to P27,959,974.06.
The money was used for educational assistance, medical benefits, rice allowance, water allowance, cash gifts, and the clothing allowance for the travel abroad of the BOD, among many other things.
However, the COA Audit Team issued notices of disallowances (NDs) that flagged these financial benefits for lack of legal basis.
For MCWD, lawyer Francis A. Dimaliwat argued that it is legal and that it is an "established and existing practice" of the MCWD long before it was declared as a government-owned and controlled corporation (GOCC).
Dimaliwat and his group said that the grant of year-end bonus and cash gift to the members of the MCWD BOD is in accordance with Local Water Utilities Administration (LWUA) Resolution No. 239 series of 2005 and Section 13 of Presidential Decree No. 198, as amended.
However, the COA in a seven-page decision found their reasoning "misplaced."
"It has already been settled that the power of the governing boards of GOCCs to fix compensation and benefits of its officials and employees is not absolute," it said.
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