The Commission on Audit (COA) has granted the petition for review filed by 13 former and incumbent officials of Baguio City against the Notice of Disallowance (ND) on the payment of P60.863 million Productivity Enhancement Incentive (PEI) to city officials and employees in 2014.
The petition for review was filed by former Baguio City mayor Mauricio G. Domogan, vice mayor Edison R. Bilog, and Sanggunian Bayan members Robert C. Ortega (incumbent), Betty Lourdes F. Tabard, Isabelo B. Cosalan Jr., Leandro B. Yangot Jr., Elmer O. Datuin, Richard O. Carino, Faustino A. Olowan, Elaine D. Sembrano (incumbent), Peter C. Franza, Fred L. Bagbagen, and Michael L. Lawana.
Appealed by the Baguio City officials was COA's Decision No. 2016-054 dated Nov. 14, 2016. The decision affirmed the Notice of Disallowance (ND) No. 16-001-101(2014) dated Jan. 25, 2016 on the P60,863,448.60 PEI which was recorded under the Other Personnel Benefits Account of the city.
They argued that the state auditors erred in applying the P5,000 ceiling for the grant of PEI. They added that no Audit Observation Memorandum (AOM) was issued prior to the issuance of the ND.
In a four-page decision, the COA found their petition "impressed with merit" and cited Item 9.0 of Department of Budget and Management (DBM) Circular No. 2014-3 dated Dec. 2, 2014 which states that "local government units have the discretion to set the amount of the PEI depending on the LGU financial capability."
The COA ordered that the assailed decision be set aside, and the ND dated Jan. 25, 2016 be lifted.
"The audit team leader is directed to determine if the PEI granted by the City Government of Baguio to its officials and employees for 2014 complied with the requirements of DBM Circular No. 2014-3 in relation to Section 325(a), Republic Act No. 7160 on Personal Services limitation; and thereupon, to issue ND, if warranted," COA's decision also stated.