Capitol PEI may escape ‘disallowance’ October 17, 2014 BY GLENDA SOLOGASTOA ILOILO City – There is hope that the Performance Enhancement Incentive (PEI) granted to the employees of the provincial government in 2012 and 2013 but disallowed by the Commission on Audit (COA) may be saved from disallowance. In a memorandum clarifying the PEI to local government unit (LGU) personnel, Department of Budget and Management (DBM) emphasized that there is no limit on the amount to be given. However, DBM added, the PEI must be based on the financial capability of the LGU and compliance with the personal services (PS) cap under Section 325 (1) and 331 (b) of the Local Government Code. According to Gov. Arthur Defensor Sr. of Iloilo yesterday, DBM also resolved that the P5,000 ceiling mentioned in budget circulars covered only government personnel in national government agencies, government-owned or -controlled corporations, and government financial institutions. Meanwhile, due to the opposition of COA, DBM will also seek the position of the Office of the President to prevent the disallowance of LGUs’ PEI in the post-audit. The memorandum dated June 6, 2014 was issued by Edgardo M. Macaranas of the Organization, Position Classification and Compensation Bureau of DBM and addressed to the regional directors of the department. Among the issues and concerns raised were: * whether the cut-off period for the counting of “at least a total or an aggregate of nine months” clause under sub-items 5.2.1 and 5. 2.2 of the said budget circular is Oct. 31 or Dec. 31, 2013; and * whether or not LGUs, in granting PEI to its employees, are limited to only up to P5,000 and any excess thereof must be disallowed. DBM also said that for an employee to receive PEI, he/she must be in service as of Oct. 31, 2013 and rendered at least a total or an aggregate of nine months of at least satisfactory service for the year, including leaves of absence with pay. The “still in the service as of Oct. 31, 2013” clause refers only to one of the conditions-to be entitled to PEI, DBM also clarified. However, sub-item 5.2.1 must be read separately from sub-item 5.2.2, it said. Thus, the “at least a total or an aggregate of nine months of at least satisfactory service for the year” rule is to be determined from January to Dec. 31, 2013 regardless of whether or not the payment is made on or after the set date pursuant to the said budget circular. In September this year, COA issued a Notice of Disallowance against the P35,000 PEI for each provincial capitol employee as well to the employees of the Iloilo City hall. It ordered a refund. Believing that it did not violate the law, the provincial government filed an appeal before the COA. Defensor said COA erred in its interpretation of applicable and related rules and regulations, circular and laws on the PEI. “This is a legal question. We do not share the position of COA on this,” said Defensor. “We did not violate the cap on personal services which should not be more than 45 percent, and the services rendered to the people of Iloilo were not affected by this.”
Posted on: Thu, 23 Oct 2014 03:04:17 +0000