November 25, 2017 | MANILA, PHILIPPINES

CoA flags ‘excessive’ OSG allowances; OSG says it’s all legal

THE COMMISSION on Audit (CoA) has flagged what it considers “excessive” allowances paid to officials of the Office of the Solicitor General (OSG), including Solicitor General Jose C. Calida and his predecessor Florin T. Hilbay, for services rendered to their client agencies.


The OSG, on the other hand, asserts that the allowances are legal under its charter and that CoA has no authority to set a ceiling amount.

In its annual audit report, CoA noted that Messrs. Calida and Hilbay, and 15 other OSG lawyers received allowances which exceeded 50% of their annual basic salary, amounting to P8.55 million for 2016.

The state audit agency noted that although Republic Act 9417, also known as the OSG Law, allows the legal staff of the OSG to receive honoraria and allowance, it has limitations as CoA issued Circular 85-25-E in April 1985, which limits the amount that can be accepted to 50% of their basic annual salary.

“Laws,rules and regulations need to be harmonized in their implementation. While the RA No. 9417 granted authority to OSG lawyers to receive honorarium, CoA Circular 85-25-E puts limitation in receipt thereof,” the agency said.

According to CoA, Mr. Hilbay received an excess allowance of P4.66 million in 2016, while Mr. Calida’s excess allowance in the same year was P1.12 million.

CoA said that it has previously issued a Notice of Disallowance on February 2014 and August 2016, on which the OSG filed appeals.

“Pending the 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% of the basic salary,” CoA said.

It also cited that under OSG Office Order No. D-188 series of 2009, OSG lawyers are required to report to the Financial Management System (FMS) their allowances, but of the P8,555,767.80 alleged excess payment last year, P2,747,250 was not reported to the FMS.

“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 no taxes were withheld at all,” CoA said.

NO AUTHORITY
For its part, the OSG said in its comment that the CoA circular does not apply to its lawyers, invoking Presidential Decree No. 478 and Section 35 (9), Chapter 12, Title II, Book IV of the Executive Order 292, which authorizes their lawyers to receive allowance and honoraria “for the legal services they render without qualification as to the number of agreements” that can be entered into by the OSG lawyers with client agencies.

The OSG added that the CoA circular issued in 1985 was already repealed by EO 292 and RA 9417, which were issued in 1987 and 2007, respectively, adding that the state audit agency has no authority to set a ceiling on the allowance that the OSG lawyers may receive.

“It is not authorized to issue rules and regulations prescribing a ceiling on the allowance to be received by government employees. The CoA, therefore, exceeded its authority when it promulgated CoA Circular 85-25-E and set a 50% cap on the annual basic salary on the allowances to be receive by government employees,” the OSG commented.

In a statement, OSG spokesperson Erik Dy reiterated that under their charter, “OSG lawyers are authorized to receive allowances and honoraria for legal services rendered to client agencies.”

“This is due to the government’s intention to attract the best the brightest lawyers to work and build a career at the OSG,” he added.

Mr. Dy noted that the issue of allowances between the OSG and CoA is nothing new, pointing out that previous Solicitors General have been the subject of these kinds of audit findings.

“The OSG is steadfast in its position that a CoA administrative circular cannot abrogate a substantive law such as the OSG Charter,” he said.

For his part, Mr. Hilbay said that the issue on the allowances has been an “old” and “recurring” matter between OSG and CoA, but noted that the allowances of OSG lawyers are allowed under Section 8 of the RA 9417.

“Obviously, the CoA doesn’t have the authority to countermand an act of [C]ongress,” Mr. Hilbay said in a text message to reporters.

“It’s basic. 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.