Calida, Hilbay got millions of excess allowances in 2016, says COA

MANILA, Philippines - In just six months since he assumed office, Solicitor General Jose Calida already got excess allowances amounting P1.123 million, while his predecessor Florin Hilbay got P4.662 million also in six months before he stepped down, a latest report by the Commission on Audit (COA) showed.

Based on the annual audit report on the OSG published by COA on its website on May 17, Calida, Hilbay and 15 other OSG lawyers received excess honoraria and allowances totaling P8,555,767.80 in 2016.

The amount was paid by OSG's various client agencies for the legal services and advice that the government lawyers rendered.

The state auditors noted that honoraria and allowances that Calida, Hilbay and the 15 other state lawyers received exceeded 50 percent of their annual basic salary..

The audit body said the OSG officials violated COA Circular 85-25-E dated April 25, 1985 which states that the payment of services, incentives, remunerations, honoraria and all other extra compensations to government officials and employees “shall not exceed 50 percent of their annual basic salary.”

Calida assumed post from Hilbay on June 30, 2016.

Based on the report, Calida and Hilbay's basic salary for 2016 only amounted to P702,516 thus they were allowed to receive allowances of up to P351,258.

The report showed that for 2016, a total of P1.475 million and P5.103 million were received by Calida and Hilbay, respectively, as honoraria/allowances from OSG's client agencies.

The COA said that while Republic Act 9417 or An Act Further Strengthening the OSG allows the staff and lawyers of the agency to receive honoraria and allowances from client departments, agencies and instrumentalities of the government, such benefits are “not without limit”.

The COA said it had even issued 15 notices of disallowance (NDs) in February 2014 and August 2016 against the grant of excess allowances to some OSG officials. The NDs are now under appeal before the COA central office.

“Pending resolution from the Commission on Audit, the OSG officers and employees who rendered legal services and advises to client agencies should have collected only the amount of up to 50 percent of their basic salary,” the COA said.

The following are the other OSG officials named in the COA report and the amount of excess allowances they each received in 2016: Mryna Agno-Canuto (P65,878.43); Hernan Cimafranca (P46,376), James Cundangan (P388,270.41), Renan Ramos (P705,842), Bernard Hernandez (P207,019.78), Eric Remegio Panga (P2,876), Ma. Antonia Edita Dizon (P336,871.82), Danilo Leyva (P112,160.93), Raymund Rigodon (P98,412.94), Liway Czarina Ruizo (P175,390.48), Sonny Von Ruaya (P93,161), Lilian Abenojar (P33,917.81), John Dale Ballinan (P206,156.84), Melbourn Ziro Pana (P204,221.37) and Ma. Hazel Acantilado (P93,325.58).

The COA figures showed that of the P8.555 million total excess allowances, P2.747 million was directly received by the OSG officials from the client agencies while the rest of the amount was coursed through the OSG Financial Management Service (FMS).

Based on the report, Calida and Hilbay directly received from the client agencies P342,500 and P466,000, honoraria/allowances, respectively.

The COA said the most of the amounts directly received by the OSG officials from the client agencies were not reported to the OSG FMS despite the agency's Office Order No. D-188 dated Sept. 9, 2009, requiring them to do so “for taxation purposes”.

“The failure of the OSG employees to report the allowances directly given to them by client agencies provides no assurance that the correct taxes were indeed withheld or [that] taxes were withheld at all,” the COA said.

The COA said at least eight client agencies confirmed directly giving honoraria and allowances to various OSG officials totaling P3.372 million but the receipts were not recorded in the FMS. These client agencies were the Aklan State University, Department of Education Division of Rizal, Development Bank of the Philippines, Film Development Council of the Philippines, Land Transportation Office, Occidental Mindoro State College, Philippine National Railways and the Central Bank Board of Liquidators.

In its reply letter to the audit report, the OSG management said the COA “has no authority” to issue an order setting a limit on allowances of government officials and employees as it is not among the audit body's functions and mandate under the Constitution.

The OSG management further cited EO 292 of 1987 which authorizes the OSG lawyers “to receive allowances and honoraria for the legal services they render without qualification as to the number of agreements for the payment of said allowances that can be entered into by the OSG lawyers with client agencies”

The OSG said both the EO 292 and the RA 9417 have already repealed COA Circular 85-25-E of 1985.

In a text message to reporters, Hilbay maintained that he and the other OSG officials receipt of allowances beyond the 50% of the basic salary was above board.

“It's an old, recurring issue bet OSG & COA. Allowances of all lawyers of OSG, past and present, are allowed by a very specific provision of law, Sec 8 of RA 9417 (OSG law). Obviously, the COA doesn't have the authority to countermand an act of congress,” Hilbay said.

“The COA can't amend a law, especially a specific provision of law that goes back to the Admin Code of 1987 and reiterated under 9417. That's always been the position of the OSG under every SolGen,” he added.