P1.5M extra pay to OGCC lawyer ‘irregular, illegal,’ says COA

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    THE Commission on Audit has junked the appeal of former Philippine National Construction Corporation president and chief executive officer Ma. Theresa Defensor seeking the reversal of a 2015 ruling that affirmed the disallowance on the payment of P1.5 million gratuity benefit to a legal consultant in 2009 to 2010.

    COA Chairman Michael G. Aguinaldo and Commissioners Jose A. Fabia and Roland C. Pondoc declared Defensor in default for filing her petition for review beyond the 180-days period allowed for appeal.

    The former PNCC top official sought lifting of the disallowance on the extra compensation paid to Atty. Herman Cimafranca, a lawyer from the Office of the Government Corporate Counsel who was designated as corporate secretary and concurrent legal adviser to the PNCC board.

    “Petitioner had already exhausted the reglementary period of six months or 180 days to file the petition for review. Thus, the assailed decision became final and executory,” the commission declared.

    Defensor argued that Cimafranca had a valid contract of service with the PNCC as legal consultant who earned due compensation for his services.

    The COA Commission Proper, however, said even if it resolves the appeal on merits, the finding that payment of additional cash benefit had no basis still stands.

    “The grant of gratuity benefit to Atty. Herman R. Cimafranca by the PNCC was disallowed in audit for lack of legal basis. Gratuity benefits given to him constituted double compensation, …thus considered irregular and illegal,” the COA said.

    It noted that PNCC Board Resolution No. BD-032-2008 that was cited as the basis for the payment of the benefit did not amount to a legal exemption from the Constitutional prohibition against double compensation.

    Finally, the COA rejected the argument that the PNCC being a government-acquired asset, did not attain the stature of a government-owned or controlled corporation (GOCC).

    “In the case of Strategic Alliance Development Corporation vs. Radstock Securities Limited and Philippine National Construction Corporation, the [Supreme Court] categorically declared that PNCC is a GOCC and not a private corporation. Verily, PNCC being a GOCC, is under the audit jurisdiction of this Commission,” the COA said.