EIGHT years after receiving a P192.19 million windfall by way of a special bonus, officials and employees of the Civil Aviation Authority of the Philippines (CAAP) were ordered by the Commission on Audit (COA) to refund the full amount as it declared the payout as “irregular.”
In an eight-page decision, the COA Commission Proper denied the petition for review filed on December 28, 2015 by former CAAP director general William Hotchkiss III and five other agency officials that sought the lifting of the 19 notices of disallowance (NDs) issued against the “achievement bonus.”
The COA allowed the appeal despite having been filed beyond the six-month period set under Presidential Decree No. 1445.
Auditors assigned to CAAP tagged the achievement bonus an “irregular expenditure” noting that the P192.19 million was not included in the 2014 CAAP Corporate Operating Budget.
CAAP defended the payment of the bonus invoking its fiscal autonomy, adding that the money came from operational savings from its corporate budget.
The COA Corporate Government Sector cluster director however sustained the findings of the audit team that CAAP’s fiscal autonomy and the authority of its Board of Directors to set the compensation and benefits are not sufficient legal bases to grant the extra bonus.
It declared that the CAAP should have secured prior approval from the Office of the President.
In addition, it noted that the bonus was paid to officials and employees mid-2014 hence, the fund source was unlikely to have come from supposed savings as none could be declared until the end of the fiscal year.
CAAP officials countered that clearance from then President Benigno Aquino III was not necessary since seven of eight members of the Board of Directors were Cabinet secretaries who were each considered an alter ego of the chief executive under the principal of qualified political agency.
The COA CP rejected the argument, saying “the imprimatur from the President is indispensable in any salary increase or compensation of GOCCs (government-owned or controlled corporations).”
It noted that the CAAP’s reliance on the Supreme Court ruling in the case of Manalang-Demigilio vs. Trade and Investment Development Corp (Tidcorp) was misplaced since qualified political agency only applies to actions of Cabinet Secretaries in the post they were appointed to by the President.
It pointed out that it was RA 9497 or the law that created the CAAP that designated the Cabinet Secretaries to seats in the Board of Directors.
