THE Cebu City Government is under scrutiny after state auditors suspended employee service incentives due to lack of documentation.
Councilor Mary Ann de los Santos sent a copy of the state auditors’ notice of suspension to SunStar on Wednesday, Feb. 26, 2025.
In the notice, the Commission on Audit (COA) flagged the release of P71.698 million in Charter Service Incentives to city officials and employees in 2023.
The City Government, under the administration of dismissed mayor Michael Rama, distributed a P15,000 Charter Day bonus to regular and casual employees. The incentive was granted based on the officials’ and employees’ performance in the individual performance commitment and review.
State auditors suspended the payment because the City failed to submit a report outlining the specific contributions of each recipient.
The City Government has 90 days to submit the required report. If the report is not submitted, the suspension will become a disallowance.
In a separate interview on Wednesday, Mayor Raymond Alvin Garcia said the service incentives were released under the previous administration. However, he assured that the City Government would respond accordingly to the notice.
Garcia had served as vice mayor before Rama was dismissed from office by the Ombudsman over a nepotism case.
Lacking requirements
In a text message to SunStar Cebu, de los Santos said the reason the 2023 Charter Day bonus was flagged was because the City Government failed to comply with the Civil Service Commission’s Memorandum Circular 1, series of 2001, or Program on Awards and Incentives for Service Excellence (Praise). The circular establishes a framework for recognizing and rewarding exemplary performance among civil servants.
Based on the notice, 27 individuals were identified as responsible, including Rama, Garcia (who was then the presiding officer of the Sangguniang Panlungsod as vice mayor) and Eugene Orbita, chairman of the Praise committee.
The notice was first revealed during the second budget hearing of the proposed P635-million first supplemental budget when de los Santos questioned Assistant City Administrator Mary Rose Lubino regarding the notice received on Feb. 17.
Lubino confirmed the receipt of the notice, stating that she was among the individuals identified as liable.
The issue was raised during the City Council’s discussion on the appropriation and feasibility of increasing the 2025 Charter Day bonus from the proposed P25,000 to P35,000 for all City Hall employees.
“This is not something novel to us to give service incentives to our employees, and this is the first time I am aware that our attention was called,” Lubino said.
She added that the notice might also affect the proposed increase in the Charter Day bonus for employees this year.
Concern
“I’m very concerned because the notice of suspension pertains to the P15,000 bonus, and now we are increasing it to P35,000. I have no issues with that amount, and I support it. But how do you reconcile that, considering we received this notice of suspension before the release of the P35,000?” de los Santos asked.
Lubino explained that the COA flagged the appropriation of a service incentive, not the amount of the bonus.
She said Mayor Garcia had instructed the City Legal Office to assist in answering the notice.
Garcia said the COA’s notice will not affect the scheduled release of the Charter Day bonus to employees this March.
According to the COA, the responsible individuals must submit justifications or explanations along with the required documents. State auditors will then determine whether the government suffered any losses due to the transaction.
The Praise committee argued that the incentive is not an award or recognition but a form of motivation and encouragement for City Hall employees to perform better.
However, the COA maintained that the incentive could not be granted without proof of extraordinary suggestions, inventions, superior accomplishments, or other significant personal contributions by the recipients. (EHP)