The Commission on Audit (COA) has reminded local government units (LGUs) against the grant of overtime pay to employees who are not qualified for payment of overtime work and disbursement of overtime funds without appropriations.

In its audit report, the COA cited the case of Claveria town in Cagayan which "irregularly" disbursed P326,054.11 for overtime pay in 2023.

It said the town of Claveria paid the overtime services of its employees despite non-compliance with Section 4 of Presidential Decree No. 1445, Civil Service Commission and Department of Budget and Management Joint Circular No. 2, series of 2015, and COA Circular 2012-01.

Section 4 of the Presidential Decree No. 1445, provides: "No money shall be paid out of any public treasury or depository except in pursuance of an appropriation law or other specific statutory authority."

CSC and DBM Joint Circular No. 2, series of 2015, dated Nov. 25, 2015, provides that civilian government personnel holding positions higher than division chief or equivalent levels are not authorized to render overtime services with pay.

COA Circular 2012-01 dated June 14, 2012 provides for certain documentary requirements for the payment of overtime services.

Upon inspection of the overtime payments made by Claveria town, the COA said it discovered that the disbursement had no existing appropriation under Personal Services of the Annual Budget of the municipality.

"Our review of the Obligation Requests attached to the transactions revealed that the payments were charged against the appropriation for Other Maintenance and Operating Expenses. This is contrary to Section 4 of the Presidential Decree No. 1445, requiring the existence of an appropriation before disbursement of public funds," the COA said.

Also, it said its auditors found that payments of overtime expenses were given to department heads totalling P149,320.75, which were contrary to the CSC and DBM joint circular.

At the same time, the COA said the payments for overtime services were also not supported with complete documentation such as Overtime Work Program and Quantified Overtime Accomplishment Report.

The municipality also failed to provide basic information such as the duration or the total number of hours of overtime services rendered, it added.

"The absence of the required documents and information makes it difficult to ascertain whether the work/activities as planned were accomplished and the amounts paid were based on the actual hours of overtime work rendered. Hence, affecting the propriety of the transaction," the COA said.

Thus COA tasked the municipality to submit justification as to why the payments were approved despite the absence of appropriation, and why department heads were allowed to render overtime work with pay.

The municipal budget officer was also directed to stop the practice of charging expenditures against appropriations that are intended for other purposes, while the municipal accountant was told to appropriately record the payment of overtime expenses.