The Commission on Audit (COA) has affirmed the notice of disallowance for P876,896.87 given by the Film Development Council of the Philippines (FDCP) to its employees for financial and health assistance during the Covid-19 pandemic.

With the ruling, the COA denied the appeal filed by Mary Liza Diño, former FDCP chairperson.

State auditors had disallowed the P5,000 one-time cash assistance given to contract of service or job order personnel amounting to P400,000. The COA said in its post audit that the disbursements were considered as irregular and cited its Circular No. 2012-003 dated Oct. 29, 2012.

On the other hand, the P476,896.87 spent as payments to two private medical companies was also disallowed as COA Resolution No. 2005-001 provides that "the procurement of private health insurance by any government agency or instrumentality is an irregular expenditure and constitutes unnecessary use of public funds."

In her appeal, Diño argued that monetary and other forms of incentives were allowed by the Civil Service Commission (CSC) Memorandum Circular No. 18, series of 2020. She claimed that the circular stated that the approval of the head of agency is sufficient for the issuance of support mechanisms for employees.

She also argued that the circular was intended for "all workers" to be entitled to the support mechanisms, and that the health care assistance given to FDCP workers was "necessary" in light of the threat of the Covid-19 pandemic.

The COA, however, denied Diño's arguments.

It said: "Notably, the grant of financial and health care assistance is not clothed with authority considering that it lacked review by the Department of Budget and Management (DBM) and the eventual approval of the President. With no such approval or authority, the extension of the assistance was without legal basis."

"Thus, the disallowances are warranted due to the violations made by FDCP when it granted additional benefits and used allotments intended for other purposes without the authority or approval from the DBM and the President," it said.

The COA also said: "The Audit Team Leader and the Supervising Auditor are instructed to verify whether the regular employees of the FDCP likewise received the cash assistance similar with that granted to the Contract of Service/Job Order personnel... and whether the same was improperly charged against other allotments, and to issue a Supplemental ND, if warranted."

The approving and certifying officials for the amounts of P400,000 and P476,896.87 have been held "solidarily liable" by the COA for the total disallowance. They are Diño, Officer-in-Charge Executive Director III Ria Anne S. Rubia, Budget Officer Jose Carlos D. Pasion, Chief Administrative Officer Ermelita Alquiza, Project Development Officer V Don Gervin T. Arawan, General Services Messenger Juanito A. Acuña, and Project Development Officer II Irish Joy F. Delfin.

It was not known immediately what legal recourse was resorted to by those affected by the COA ruling.