Disallowance of P10M cash perks for MECO execs affirmed

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    THE Commission on Audit has upheld the decision of the National Government Sector-Cluster D that affirmed the disallowance issued against the payment of unauthorized allowances to four trade representatives to the Manila Economic and Cultural Office (MECO) in Taiwan totaling P10.67 million.

    In a decision dated September 19, 2019 but released only last week, COA Chairman Michael G. Aguinaldo and Commissioners Jose A. Fabia and Roland C. Pondoc denied the petition for review filed by Kenneth T. Yap, a special trade representative of the Department of Trade and Industry, one of four that received the disallowed “overseas allowances” and “living quarters allowance” paid out to them in 2010.

    OA’s Legal Services Sector Ad Hoc Committee issued the notice of disallowance on December 28, 2010 citing several grounds, including non-submission of an allowance adjustment notice duly signed by the DTI secretary and authority from the Office of the President.

    Likewise lacking were certification of services rendered during the period of the claim as well as the Special Allotment Release Order (SARO) and the Notice of Cash Allocation from the Department of Budget and Management (DBM).

    A notice of disallowance includes a requirement to refund the amount involved.

    Held liable for the disallowance were former DTI Undersecretary Thomas Aquino, Foreign Trade Service Corps coordinator Mauino Haresco, Budget officer Wilma Macalalag, and special trade representatives (STRs) Francisca Rodriguez, Kenneth T. Yap, Manuel Tayas, and Leonardo Basug.

    Yap appealed the disallowance invoking DTI Department Order No. 145 issued in 1996 as sufficient justification for the questioned allowances computed on the rates applied to MECO officials and staff.

    He alsoargued that it was unfair for the supervising auditor to submit the documentary requirements listed, noting that these were all with the DTI.

    The COA overruled his contentions, noting that a DTI Department Order cannot substitute for a presidential imprimatur made mandatory under Presidential Decree No. 1285.

    Quoting the Supreme Court in the case on Funa vs. MECO and COA, the Commission underscored that MECO is not considered a government instrumentality or a diplomatic office in light of the “One China Policy.”

    Because of this, the COA said it is not proper for the DTI to use the same rate for its foreign-based personnel as the one given to MECO.