Cited Laws
accordingly excluding those created, maintained or acquired in pursuance of a policy of the state, enunciated in the constitution or by law, and those whose officers and employees are covered by the Civil Service. (Emphasis supplied.) On November 29, 1996, the grant of productivity incentive bonus to the HDMF personnel in the total amount of P5,136,710.91 was disallowed in audit under Notice of Disallowance No. 96-006-101 (91). [4] The disallowance was based on COA Decision No. 96-288, dated June 4, 1996, stating that Republic Act No. 6971 does not apply to government-owned or controlled corporations or to government financial institutions with original charters performing proprietary functions, such as the HDMF. [5] In a letter-request dated May 28, 1997, HDMF, through its President and Chief Executive Officer, Zorayda Amelia C. Alonzo, requested for the lifting of the disallowance. [6] Alonzo argued that Republic Act No. 6971 applies to the employees of HDMF since the coverage of the said law includes government-owned and controlled corporations performing proprietary functions, and the supplemental rules excluding it from coverage was issued after the HDMF had already granted the productivity incentive bonus to its employees. In its Decision No. 98-245 [7] dated June 16, 1998, the Commission on Audit affirmed the audit disallowance. It ruled, thus: x x x x x x x x x Appellant (petitioner herein) further averred that while the Supplemental Rules Implementing R.A. No. 6971 issued by the Department of Labor and Employment and the Department of Finance dated December 27, 1991, exclude from the coverage of R.A. No. 6971 GOCCs whose officers and employees are covered by the Civil Service Law (like the HDMF), payment of the incentive bonus have been effected prior to the issuance of the said supplemental rules. Simply stated, it is the position of the appellant that the supplemental rules should not be given retroactive effect. The Commission finds the appellants arguments untenable. It must be noted that the grant of the Productivity Incentive Bonus was made on November 21, 1991 or after receipt of the advice of the Department of Budget and Management Undersecretary dated August 26, 1991 to defer payment of Productivity Incentive Bonus to all GOCCs/GFIs with original charters performing proprietary functions, pending definite ruling of the Office of the President. Despite the said notice, management proceeded with the payment. Likewise, the issue as to whether or not GOCCs/GFIs with original charters which are performing proprietary functions are covered by R.A. No. 6971 had been resolved by the Secretary of Justice in his letter dated November 8, 1995, stating that GOCCs with original charter, being covered by the Civil Service Law, and not by the labor laws, are clearly outside the ambit of R.A. No. 6971. Verily, the grant of the incentive bonus is contrary to the Supplemental Rules Implementing R.A. No. 6971 issued by the Department of Labor and