The Commission on Audit (COA) ordered the recipients of P96.86 million at the National Economic and Development Authority (NEDA) to return the cash incentive, lest “appropriate sanctions” be meted against them.
After stressing that the Cost Economy Measure Award (Cema) and Personnel Motivational Incentive (PMI)—two incentives that NEDA released to its employees—were illegal, state auditors told the Socioeconomic and Planning department to return the cash.
Auditors reported that NEDA released between 2010 and 2012 P96.86 million of incentives for the employees.
Cema is granted to an employee or team whose contributions such as ideas, suggestions, inventions, discoveries or performance of functions resulted in savings in terms of man-hours.
PMI is given to employees to encourage them to contribute to institutional performance through innovation and improvements.
These two incentives were included in the NEDA Awards and Incentives System (NAIS), which was patterned over the Civil Service Commission’s Program on Awards and Incentives for Service Excellence.
In 2005, the NEDA implemented NAIS. Five years after, the agency through a circular infused Cema and PMI in NAIS.
Auditors reported that out of 15 regional offices of NEDA across the country, only two offices neither released Cema nor PMI to their employees: the NEDA regional offices of Mimaropa and Soccsksargen.
Among the 13 offices, the NEDA Central Office took the lion’s share with P73.64 million. Davao Region released P3.09 million, while Central Luzon disbursed P2.53 million.
The Cordillera Administrative Region handed out the smallest amount with P89,914.
Despite seeming legality for releasing Cema and PMI, auditors said that NEDA was in the wrong to release them.
COA explained that CSC does not have the authority to allocate savings from the appropriations of the executive branch for payment of incentives and awards.
Too, NEDA was not authorized by the President to use the savings from its appropriations to pay for Cema and PMI, COA said.
This was after auditors found out that P78.71 million, or 81 percent out of the P96.86 million was charged to the personal services. The remaining P18.15 million, or 19 percent was charged to the maintenance and other operating expenses.
“The use of savings from appropriations of the executive department is exclusive to the President as enshrined in Section 25 , Article VI of the Constitution. As such, the payment of CEMA and PMI by NEDA is unauthorized and deemed irregular,” COA said.
COA said that the payment of Cema and PMI is “null and void” and is deemed unauthorized because they are neither among the incentives authorized under a joint resolution between the Senate and the House of Representatives.
The Audit agency said that the two incentives was not listed under Item 4(h)(ii) of Senate and House of Representatives Joint Resolution 04.
These incentives were also not required under the General Appropriations Act for 2010, 2011 and 2012.
Given these two conditions, COA said that “the payment by NEDA of Cema and PMI . . . is null and void.”
In its pitch to defend the issuance of the dole-outs, NEDA forwarded documents to COA, which would supposedly show that Cema and PMI are meritocratic incentives.
“[However,] the documents did not provide the performance measures including, among others, adequate performance indicators, baselines and metrics or standards,” auditors said.
The lack of performance measures poses the possibilities that factors included for the accomplishments are, among others, ordinary and the computation the determination of the benefits considered as superior or extraordinary is flawed, COA stressed.
“We [auditors]recommended that management [NEDA] enforce the refund of the payment of Cema and PMI and, as warranted, consider imposing the applicable sanctions against the erring officials and employees,” COA said.
NEDA replied that Cema and PMI were valid and that subsisting laws and issuances authorized NEDA officials to incur whatever expenses involved in commending its employees.
The Commission though stood pat on its observation and already issued notices of disallowance to eight NEDA offices between May and June this year.