COA orders Laoag to return illegal bonuses, nix contracts

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by Allan Yves Briones

The Commission on Audit (COA) has directed the city government of Laoag to review and refund a number of illegal contracts and financial grants worth over P15 million.

In 2018, Laoag City reportedly granted P3.35 million in financial assistance and cash incentives to its barangay officials, nutrition scholars, service point workers and tanods.

According to audit records, these cash grants were charged against the city government’s Other Maintenance and Operating Expenses (OMOE) through City Ordinance No. 2017-096, prohibited under Sangguniang Panlalawigan Resolution No. R2018-2350 and COA Circular 2015-009.

“Furthermore, it is considered illegal under COA Circular 2012-003…to use financial subsidy to (local government units), in this case to barangays, for personal services such as salaries, honoraria, allowances, bonuses and other similar forms of compensation,” COA stated in the report.

The city government’s actions, in effect, circumvents Section 95 of Republic Act No. 7160 pertaining to the prohibition on additional or double compensation.

“No matter how noble the intention of the City Government to extend financial assistance/aid for the men/women who selflessly served and gave commitment to the community, such benevolence, generosity and goodwill, however, should yield to the words of the law,” COA added.

State auditors also flagged P12.41 million in illegal contracts for the purchase of umbrellas, round cakes, flash lights and other materials, of which P186,250 has already been disbursed.

These contracts were reportedly intended as donations to different barangays, but were not authorized by the Sangguniang Panlungsod, also prohibited under law.

“Also, the contracts were entered into although not included in the 2018 Annual Procurement Plan of the City Government which was a clear violation to Section 20 of the General Provisions of its Annual Budget,” COA said.

The state auditing agency stated that it will be issuing notices of disallowance for the transactions.

According to Laoag officials, as stated in the report, they will strictly comply with the process requirements in succeeding actions.

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