ASB Decision 2010-071

ADJUDICATION AND
SETTLEMENT BOARD
DECISION NO. 2010-071
July 21, 2010
Subject: Appeals of Secretary Jesus G. Dureza,

Chairman, and of Assistant Secretary
Corazon T. Ginete, Director for Support
to Operations, et al., all of Mindanao
Economic Development Council
(MEDCo), from Legal and Adjudication
Office (LAO)-National Decision No.
2008-095 dated November 17, 2008,
affirming the disallowance on the
payment of Staple Food Assistance and
Amelioration Allowance to MEDCo
officials and employees, in the total
amount of P996,000.00
DECISION
FACTS OF THE CASE
Before this Board are the appeals of Secretary Jesus G. Dureza, Presidential
Adviser for Mindanao and the former Chairman of the MEDCo, and of Assistant
Secretary Corazon T. Ginete, Director for Support to Operations, MEDCo, et al.,
from LAO-National Decision No. 2008-095 dated November 17, 2008, which
affirmed Notice of Disallowance (ND) No. 05-002-101-(04)-RXI-157-MEDCo
dated October 14, 2005 in the amount of P456,000.00 and ND No. 05-003-(04)-
RXI-159-MEDCo dated November 21, 2005 in the amount of P540,000.00, or a
total amount of P996,000.00, relative to the payment of Staple Food Assistance
and Amelioration Allowance to officials and employees of MEDCo.
Records disclose that pursuant to Civil Service Commission (CSC)

Memorandum Circular No. 1, series of 2001 dated January 26, 2001 and the
Program on Award and Incentives for Service Excellence (PRAISE), as approved
by the CSC, Regional Office No. XI, Davao City, MEDCo granted Staple Food
Assistance and Amelioration Allowance to its officials and employees for a period
of three (3) years from 2001 to 2004.
Upon post-audit, the Audit Team Leader (ATL), MEDCo, issued Audit
Observation Memorandum (AOM) No. 2005-001 dated July 28, 2005 and AOM
No. 2005-002 dated February 8, 2005 finding that the subject benefits were given
without authority from the Department of Budget and Management (DBM) or
from the Office of the President, and that the grant was in violation of Republic
Act (RA) No. 6758 or the Salary Standardization Law. Consequently, the
Regional Cluster Director, Legal and Adjudication Sector, COA Regional Office
No. XI, Davao City, issued the subject NDs based on the aforementioned findings.
An appeal from the disallowance was denied under the subject LAO-
National Decision No. 2008-095 which found the same to be without merit
considering that there was no legal basis for the grant of Staple Food Assistance
and Amelioration Allowance to MEDCo officials and employees. Hence, the
instant appeal.
Appellants argue that the benefits granted under the PRAISE are exempt
from Section 12 of RA No. 6758 as interpreted by the DBM in National
Compensation Circular (NCC) No. 59 dated September 30, 1989 which integrated
into the basic salary the allowances of government officials and employees as
enumerated therein and that the grant of PRAISE benefits is in the form of
personnel incentives which do not form part of the employees’ regular
compensation as it is conditioned on the favorable assessment of the PRAISE
Committee, whose criteria are duly reviewed, evaluated and approved by the CSC
and its grant is subject to availability of funds.
Appellants also invoke the case of Blaquera, et al. vs. Alcala, 295 SCRA
366, where the Supreme Court acknowledged CSC’s constitutional authority to
grant benefits to government personnel. They further argued that the authority of
CSC to promulgate rules, regulations and standards for PRAISE finds support
under Section 3, Article IX-B of the 1987 Constitution, which states:
“The Civil Service Commission, as the central personnel

agency of the Government, shall establish a career service and
adopt measures to promote morale, efficiency, integrity,
responsiveness, progressiveness and courtesy in the civil service.
It shall strengthen the merit of the reward system, integrate all
human resources development programs for all levels and ranks,
and institutionalize a management climate conducive to public
accountability. It shall submit to the President and the Congress
an annual report on its personnel program.”
Finally, appellants argue that assuming that no serious error was made in
the assailed decision, MEDCo officials and employees should not be required to
return the amount received under the CSC-approved PRAISE. They emphasized
that the benefits were granted to deserving employees after the same were
2
approved by the CSC in its Resolution No. 091151 dated August 4, 2009, which
stated in part:
“x x x However, inasmuch as MEDCo has an approved PRAISE

by the CSC, its officials and employees should not be faulted for
receiving the benefits provided in MEDCo PRAISE since it is
also based on Sections 31 and 35, Book V of the Administrative
Code of 1987 (Executive Order No. 292).
WHEREFORE, the Commission hereby poses its stand

that the payment of the benefits received by MEDCo officials
and employees is in accordance with the MEDCo PRAISE
approved by the CSC Regional Office No. XI.”
Hence, there being no bad faith that can be ascribed to appellants in approving and
receiving the benefits under the CSC-approved Agency PRAISE, they should not
be required to refund the same.
ISSUE
Whether or not the instant appeal is meritorious
DISCUSSION
After a careful evaluation of the records and applicable laws, this Board
finds the instant appeal devoid of merit.
At the outset, this Board finds that the assailed decision is in accord with
the existing policies of this Commission relative to the grant of Staple Food
Assistance and Amelioration Allowance. It should be noted that contrary to
appellants’ contention, this Commission has previously upheld the disallowances
on the grant of allowances pursuant to agency-approved PRAISE in LAO-
National Decision No. 2004-158 dated April 27, 2004 pertaining to employees of
the Bureau of Fisheries and Aquatic Resources (BFAR), Region XI, Davao City,
as well as in COA Decision No. 2001-134 dated July 10, 2001, with regard to
employees of the Department of Trade and Industry (DTI) Region XI, Davao City.
We maintain that the CSC-approved PRAISE of the MEDCo cannot stand

as legal basis for granting staple food assistance and amelioration allowance to its
officials and employees. If allowed, the grant constitutes a form of exemption
from the Salary Standardization Law which necessarily requires the approval of
the Office of the President.
3
Even the CSC affirms the judiciousness of the questioned COA decision,
when under CSC Resolution No. 09-1151 promulgated on August 4, 2009, it
stated that it “respects the decision of the Commission on Audit as it is
constitutionally mandated to examine, audit, and settle all accounts pertaining to
the revenue and receipts of, and expenditures or uses of funds and property,
owned or held in trust by, or pertaining to, the Government, or any of its
subdivisions, agencies, or instrumentalities.” Moreover, in the same Resolution, it
concedes that the “ruling of the Commission on the matter of payments made by
MEDCo cannot be passed upon by the CSC.”
Following the Blaquera ruling in G.R. No. 109406, September 11, 1998,
the employees who received the benefits but had no participation in the approval
thereof may not be compelled to refund such benefits already granted to them
which they received in good faith. The same, however, is not the case with
respect to the approving officers who authorized the granting of subject benefits
under the PRAISE Program. Following the ruling in the case of Gabriel S. Casal,
et al. vs. COA,, G.R. No. 149633, November 30, 2006, the officers who approved/
authorized the grant of subject benefits are liable for the disallowance.
RULING
WHEREFORE, premises considered, this Board hereby AFFIRMS LAO-

National Decision No. 2008-095 dated November 17, 2008.
(Sgd.) ELIZABETH S. ZOSA

Assistant Commissioner – Legal Services
Chairperson
(Sgd.) EMMA M. ESPINA

Assistant Commissioner-National
Member
(Sgd.) JAIME P. NARANJO (Sgd.) GLORIA S. CORNEJO

Assistant Commissioner-Corporate Assistant Commissioner-Local
Member Member
4
Copy furnished:
Secretary Jesus G. Dureza

Presidential Adviser for Mindanao
4th Flr. SSS Building, JP Laurel Ave.
Davao City
ASEC Corazon T. Ginete

Mindanao Economic Development Council
4th Flr. SSS Building, JP Laurel Ave.
Davao City
The Audit Team Leader

Cluster, Executive and Oversight
National Government Sector
NEDA, RO XI, 3rd Level CAM Bldg.
Alvarez St., Davao City
The Regional Director

COA Regional Office No. XI
Davao City
The Assistant Commissioner

National Government Sector
The Assistant Commissioner
and General Counsel
Legal Services Sector
Both of this Commission
ALSO 1531&1531B
SUV/AAE/DHT/JDGD
OGC-2009-11-27-5585
-2010-2-4-5971
jdd.docs

ASB Decision 2010-071

Uploaded by

Copyright:

Available Formats

ASB Decision 2010-071

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

ASB Decision 2010-071

Uploaded by

Copyright:

Available Formats

ADJUDICATION AND

Subject: Appeals of Secretary Jesus G. Dureza,

FACTS OF THE CASE

Records disclose that pursuant to Civil Service Commission (CSC)

“The Civil Service Commission, as the central personnel

“x x x However, inasmuch as MEDCo has an approved PRAISE

WHEREFORE, the Commission hereby poses its stand

Whether or not the instant appeal is meritorious

We maintain that the CSC-approved PRAISE of the MEDCo cannot stand

WHEREFORE, premises considered, this Board hereby AFFIRMS LAO-

(Sgd.) ELIZABETH S. ZOSA

(Sgd.) EMMA M. ESPINA

(Sgd.) JAIME P. NARANJO (Sgd.) GLORIA S. CORNEJO

Secretary Jesus G. Dureza

ASEC Corazon T. Ginete

The Audit Team Leader

The Regional Director

The Assistant Commissioner

You might also like