COA affirms P256-M disallowance vs ex-Napocor execs

The Commission on Audit (COA) has ordered the return of P256.411 million in performance incentives and life insurance plan granted by former executives of National Power Corp. (Napocor) to officials and employees in 2004 to 2006 and 2014 to 2015, respectively.

In two separate decisions both dated Jan. 24, 2022 but uploaded on the COA website recently, the commission has upheld the validity of two notices of disallowance (NDs) earlier issued by its audit team.

One of the NDs, issued on Oct. 15, 2012, covers the payment of performance incentive benefit (PIB) to regular, contractual and casual officials and employees of the Napocor head office, engineering and small power utilities group for 2004, 2005 and 2006, in the total amount of P222,363,875.17

The other ND, issued on July 21, 2015, covers the Napocor’s payment of P34,047,188.03 covering the premiums for Group Hospitalization and Life Insurance Plan (GHLIP) of its employees who belonged to the Power Generation Employees Association (PGEA) for the period of April 1, 2014 to March 31, 2015.

State auditors usually issue an ND to compel the return of the disbursed amount by the concerned officials or employees after it was found that the fund’s release was irregular or illegal.

In the case of the ND over the Napocor’s grant of PIB to its officials and employees, the COA said its audit team was correct in disallowing the fund disbursement as records showed that the grant did not have the required prior approval of the Office of the President.

Furthermore, the COA said the payment was considered “excessive and extravagant” under COA Circular No. 85-55-A dated Sept. 8, 1985 since the PIB granted was half up to two-and-a-half times of the monthly basic salary rates of the NPC officials and employees.

The COA denied the petition for review of Richard dela Peña, president of PGEA-Napocor, for “lack of merit” on top of being filed beyond the 180-day period to appeal a decision.

It clarified that only officials identified in the ND as the authorizing, approving or certifying officers – Rogelio Murga and Cyril del Callar – both former president and chief executive officer of Napocor, shall be held responsible for the disallowed amount.

“Clearly, the authorizing, approving and certifying officers are solidarily liable to refund the amount,” the COA’s decision read.

Meanwhile, the COA denied the joint petition of six Napocor officials seeking to nullify an ND issued against them over payment of GHLIP employees for April 1, 2014 to March 31, 2015.

It also denied the petition for being filed out of the 180-day period and for lack of merit.

The COA agreed with its audit team’s position that the payment of GHLIP premiums for PGEA members was “illegal expenditure” under Section 12 of Republic Act 6758 or the Salary Standardization Law.

“Lastly, under COA Circular No. 2012-003 dated Oct. 29, 2012, premium payments for the health insurance of the officials and employees of government-owned and controlled corporations without prior authority from the Office of the President is considered an irregular expenditure. In this case, there is no proof to show that (Napocor) obtained the said authority,” the COA said.

Named in the ND as liable for the refund of the disallowed amount were former Napocor president and chief executive officer Gladys Cruz-Sta. Rita, former vice president for administration and finance Lorna Dy, former senior department manager Alexander Japon, former manager of Disbursement Accounts Monitoring Division Monica Legaspi, former section chief Marina del Rosario and former manager of the Human Resource Department Marciana Guinto.