Title
Audit Rules on Gov't Allowances and Benefits
Law
Coa Circular No. 2013-003
Decision Date
Jan 30, 2013
COA Circular No. 2013-003 mandates that all allowances, incentives, and benefits for government officials and employees must have a legal basis, with strict audit disallowance for any payments lacking proper authorization.
audit disallowance
legal basis
government benefits

Policy: only lawfully authorized benefits

  • The Circular requires that payments of allowances, incentives, and other benefits to government officials and employees shall be based on and conform strictly with laws, rules and regulations that grant or authorize such payments.
  • The Circular reiterates that payments without legal basis shall be disallowed in audit by COA.
  • The Circular limits entitlement: government officials and employees are entitled only to benefits expressly provided by law or other statutory authority, and the rules and regulations issued by competent authority.

Entitlement standard and legal basis

  • Government officials and employees must receive only those allowances, incentives, and other benefits that are expressly provided by law or other statutory authority.
  • Payments must be supported by the applicable statutory authority and the applicable rules and regulations.
  • Payments not meeting this standard shall be disallowed in COA audit.

Allowances commonly under RA 6758 SSL agencies

  • Agencies covered by Republic Act (RA) No. 6758 (the Salary Standardization Law (SSL)) are governed by the listed allowances and their cited legal authorities and rates.

  • The Circular treats the following as examples of commonly granted allowances and benefits, each tied to a legal basis and an amount/rate.

  • Personnel Economic Relief Allowance (PERA) is authorized by Section 39, General Provisions, 2012 and 2013 General Appropriations Acts (GAAs) and corresponding sections of subsequent years, and is set at PHP 2,000.00 per month.

  • Representation Allowance and Transportation Allowance (RATA) is authorized by Section 45, General Provisions, 2012 and 2013 GAAs and corresponding sections of subsequent years; it is paid as indicated in Section 45 and applicable provisions of subsequent years, and LGU rates are provided in Local Budget Circular (LBC) No. 84 (dated April 13, 2007).

  • Extraordinary and Miscellaneous Expenses (EME) is authorized by Section 23, General Provisions, 2012 and 2013 GAAs and corresponding sections of subsequent years; it is paid as indicated in those provisions.

  • Productivity Incentive Benefit (PIB) is authorized by DBM National Compensation Circular (NCC) No. 73 (dated December 27, 1994), DBM NCC No. 73-A (dated March 1, 1995), and DBM Circular Letter Nos. 3-96 (dated January 15, 1996), 2001-6 (dated March 2, 2001), and 2002-3 (dated January 2, 2002); it is paid at PHP 2,500.00 or PHP 2,000.00 depending on the employee’s performance rating.

  • Uniform/Clothing Allowance is authorized by Section 40, General Provisions, 2012 and 2013 GAAs and corresponding sections of subsequent years, and DBM Budget Circular (BC) No. 2012-1 (dated February 23, 2012); it is PHP 5,000.00 per year and may vary.

  • Loyalty Cash Award (LCA) is authorized by Section 7, Rule X, Omnibus Rules of the Civil Service Commission (CSC), DBM Department Order No. 92-10 (dated October 1, 1992), and CSC Memorandum Circular No. 6, s. 2002; it is paid as follows:

    • 10th year: PHP 5,000.00
    • 15th year: PHP 3,000.00
    • 20th year: PHP 3,500.00
    • 25th year: PHP 4,000.00
    • 30th year: PHP 5,000.00
    • 35th year: PHP 7,500.00
    • 40th year: PHP 10,000.00

  • Travelling Allowances for Domestic Travels are authorized by Executive Order (E.O.) Nos. 248 and 248-A (s. 1995) as amended by E.O. No. 298 (s. 2004); the rates are PHP 800.00 per day for travel outside the 50 km. radius from Metropolitan Manila or official station, and PHP 400.00 per day for travel within the 50 km. radius.

  • Travelling Allowances for Foreign Travels are governed by the same E.O. authority cited for domestic travel.

  • Daily Subsistence Allowance is computed using UNDP Index and includes:

    • Pre-Departure Expenses: PHP 1,500.00
    • Clothing Allowance: $400.00, which is suspended under Office of the President Memorandum Circular No. 52 (dated October 2, 2003)
    • Representation Expenses: $1,000.00

  • Costume or Uniform, and Other Expenses Related to Cultural and Athletic Activities are authorized by Section 25, General Provisions, 2012 and 2013 GAAs and corresponding sections of subsequent years; payment is PHP 1,500.00 per employee per participant per year.

  • Magna Carta Benefits for Public Health Workers are governed by RA No. 7305 and its revised IRR, including the following benefit levels:

    • Hazard Allowance: 25% of monthly basic salary for salary grade 19 and below, and 5% for salary grade 20 and above
    • Longevity Pay: 5% of monthly basic pay
    • Subsistence Allowance: three (3) meals a day
    • Laundry Allowance: PHP 150.00 per month
    • Medico-Legal Allowance: PHP 200.00 (slight physical injury), PHP 300.00 (less serious physical injury), PHP 500.00 (serious physical injury), PHP 1,000.00 (necropsy), PHP 1,000.00 (autopsy), PHP 600.00 (per court appearance), and PHP 20,000.00 (one-time relocation allowance)
    • Remote Assignment Allowance: 50% of basic pay

  • Benefits for Science and Technology Personnel are governed by RA No. 8439 and its IRR, as amended, including:

    • Share in Royalties: 60%-40% basis in favor of the Government and the personnel involved in the technology/activity
    • Hazard Allowance: 15% of monthly basic salary for personnel indirectly exposed to hazard and 30% of monthly basic salary for personnel directly exposed to hazard
    • Subsistence Allowance: three (3) meals a day or PHP 150.00 per day
    • Laundry Allowance: PHP 500.00/month

  • Housing and Quarters Allowance and related items in this benefit list include:

    • Longevity Pay: 5% of the monthly basic salary for every five (5) years of continuous and meritorious service

  • Medical Examination is included as an allowance/benefit item in the referenced list for SSL-covered agencies.

  • Special Counsel Allowance is authorized by Section 42, Special Provisions, 2012 and 2013 GAAs and applicable provisions of subsequent years; it is paid at:

    • PHP 1,000.00 (2012 GAA) and PHP 1,250.00 (2013 GAA) per appearance or attendance of hearing
    • Not exceeding PHP 4,000.00 (2012 GAA) and PHP 5,000.00 (2013 GAA) per month

  • Hazard Duty Pay is authorized by Section 43, General Provisions, 2012 and 2013 GAAs and applicable provisions of subsequent years, and DBM Budget Circular (BC) No. 2005-4 (dated July 13, 2005); it is paid as:

    • 1 to 7 days: PHP 400.00
    • 8 to 14 days: PHP 500.00
    • 15 or more days: PHP 600.00

  • Honorarium is governed by Section 44, General Provisions, 2012 and 2013 GAAs and applicable provisions of subsequent years, and is computed using the applicable DBM guidelines, depending on the assignment:

    • Government special projects: computed based on guidelines in DBM BC No. 2007-2 (dated October 1, 2007)
    • Lecturers, resource persons, coordinators and facilitators: computed based on formula in DBM BC No. 2007-1 (dated April 23, 2007)
    • Ex-officio chairs, vicechairs, and members, and private sector representatives of governing boards of commissions, boards, councils and similar entities of NGAs and GOCCs: computed based on guidelines in DBM National Budget Circular (NBC) No. 2007-510 (dated May 8, 2007)

  • Mid-Year and Year-End Bonus and Cash Gift are governed by RA No. 6686, as amended by RA No. 8441; payment includes one month basic salary and an additional Cash Gift of PHP 5,000.00.

  • Collective Negotiation Agreement (CNA) is governed by Administrative Order No. 135 (dated December 27, 2005) and Section 3(b), Public Sector Labor-Management Council (PSLMC) Resolution No. 4, s. 2002; the benefit is variable, depending on savings generated by cost-saving measures introduced by the CNA.

  • Allowances and benefits not listed in the enumerated list are recognized if they are government-wide or specific to certain government agencies and there is sufficient legal basis.

Non-SSL agencies: approval for extra benefits

  • Officials and employees of agencies exempt from the SSL may receive other allowances and benefits if payment is subject to prior approval by the Office of the President.
  • Prior approval is required under Presidential Decree (P.D.) No. 1597, titled “Further Rationalizing the System of Compensation and Position Classification in the National Government.”
  • The Office of the President grants approval upon recommendation of the Secretary of the Department of Budget and Management, covering allowances, honoraria, and other fringe benefits including honoraria for participation in authorized projects that may pay additional compensation.
  • Agencies are required to observe guidelines and policies issued by the President for position classification, salary rates, levels of allowances, project and other honoraria, overtime rates, and other forms of compensation and fringe benefits for positions or groups exempted by law from OCPC coverage, and they must report to the President through DBM on their position classification and compensation plans, policies, rates, and related details following presidential specifications.

GOCC governance limits and conditions

  • GOCCs and their subsidiaries covered by Republic Act (RA) No. 10149, the GOCC Governance Act of 2011, must strictly comply with Sections 10 and 23 on additional incentives and compensation-related limits.
  • Section 10 (Additional Incentives) provides that the Governance Commission for Government-Owned or -Controlled Corporations (GCG) may recommend incentives for certain position titles for good performance, but no incentives shall be granted unless the GOCC:
    • has fully paid all taxes for which it is liable; and
    • has declared and paid all dividends required under its charter or any other laws.
  • Section 23 (Limits to Compensation, Per Diems, Allowances and Incentives) provides that, despite contrary GOCC charters, the compensation, per diems, allowances, and incentives of Board members shall be determined by the GCG, using Executive Order No. 24 (dated February 10, 2011) as a reference, among others.
  • Section 23 also provides that Directors/Trustees shall not be entitled to retirement benefits as directors/trustees.
  • For GOCCs organized solely for promotion of social welfare and the common good without regard to profit, the total yearly per diems and incentives in aggregate for Board members shall be determined by the President upon recommendation of the GCG based on achievement of performance targets.
  • Additional incentives and per diems are conditioned on the existence of specific authority from the agency charter or other statutory provisions.

COA audit disallowance mandate

  • All COA Auditors are directed to disallow in audit payments of allowances, incentives, and other fringe benefits made to government officials and employees that have no legal basis.
  • COA Auditors must also disallow payments that do not conform strictly with the laws, rules, and regulations granting or authorizing the payment.

Repeal and effectivity

  • All issuances inconsistent with COA Circular No. 2013-003 are repealed or amended accordingly.
  • The Circular takes effect fifteen (15) days after publication in newspapers of general circulation.

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