IN THE last two years, employees, officers and members of the board of Mactan airport received at least P33.6 million in anniversary and performance bonuses.
The Commission on Audit (COA) has asked them to return the money.
It said the bonus amounted to P19.9 million in 2009, or not less than P10,000 per employee, but lacked a legal basis.
In 2008, the Mactan Cebu International Airport Authority (MCIAA) budgeted P20 million for anniversary and performance bonuses, but the Department of Budget and Management (DBM) disallowed P13.79 million.
These findings are revealed in the annual audit report on MCIAA transactions as of Dec. 31, 2009. Copies were sent last month to General Manager Danilo Francia and the MCIAA board.
“We requested all MCIAA officials and employees, including members of the board, to refund the amount collected,” state auditor Ma. Irma Purog, team leader, said in the report submitted to the COA regional office.
“We further recommended that management refrain from granting personnel benefits which are contrary to existing laws, rules, regulations, and those which are explicitly disallowed in the COB (Corporate Operating Budget),” she said.
Charter
Asked to comment, retired general Francia said the MCIAA Charter empowers the board to appropriate such bonuses.
“Read our charter. Every year, that is their (COA’s) comment, and every year, we mention that that the Charter is our basis. That has been going on long before I arrived (at MCIAA). In other corporations, it’s the same thing. So why make public these things only now?” Francia said in a text message.
He added even COA and the Office of the Ombudsman have incurred disallowances.
“Disallowances do not mean that we violated the law. It only means that COA has a different interpretation of the law. Sometimes they are correct and sometimes they are wrong. The final judge will be the Supreme Court. Everything that we do is based on our mandate in the Charter and other relevant laws,” Francia said.
The audit report states MCIAA went to court in January 2008, suing both COA and DBM, to assert the airport board’s right to approve benefits for all officers and employees.
“The case for declaratory relief is still pending resolution as of the writing of this report,” COA said.
Fringe
These “fringe benefits without legal basis” were granted every year since 2007, it added.
The MCIAA board’s recent approval of P500,000 in severance pay to a former member of the board is being reviewed by the Office of the Ombudsman-Visayas.
The same audit report said that in 2008, MCIAA also granted P20.33 million in collective negotiated agreement (CNA) incentives, although this violated conditions set in Budget Circular 2006-01.
That circular states the incentive can only be released if the airport spends less on operating expenses than the approved corporate operating budget (COB).
Also, only half of the savings can be released as incentives. At least 30 percent must go to improvements in working conditions, while 20 percent needs to be retained for operations, like productivity improvement programs.
But there were no savings in 2008, COA said, so there should have been no CNA incentive that year.
Intel funds
Instead, the MCIAA spent P625.1 million that year on personnel, maintenance and other operating expenses—at least P174 million over its DBM-approved operating budget or COB.
The audit team also discovered that P2.3 million in disbursements of discretionary and extraordinary expenses (or the so-called intelligence funds) were not supported by receipts or other evidence of how these were spent.
Auditors asked the general manager to submit the receipts for all these expenses, as well as an approval from the Office of the President “of the intelligence expenses incurred.”
The COA report, dated May 31, 2010, also cited flaws in the procurement and payment of two consulting service contracts for the reconstitution of land titling project of MCIAA.
Dating back to 2008, these contracts were worth P14.620 million.
Review
COA said the consultant’s full payment was authorized even if the required services have yet to be completed.
However, MCIAA Legal Officer Glenn Napuli said the consultant has already complied with his task of gathering the necessary documents for land titles and submitting these to the Office of the Solicitor General.
Auditors said the MCIAA failed to submit its P1.22-billion operating budget for 2009 to the DBM, for review. This is required under Executive Order 518.
The same COA report quoted the airport management’s answer to this finding. It reportedly said that “by law, it is the MCIAA board who will approve the budget” and “it does not need another approval by DBM or any other agency. Otherwise, the law should have said so.”
Both MCIAA and the COA team agreed in the exit conference to ask the DBM to resolve the issue, once and for all.