G.R. No. 244816 - MELPIN A. GONZAGA, FOR HIMSELF, AND ON BEHALF OF ELOISA A. LIM, SHIRLEY S. ONG, SOCORRO R. QUIRINO, ARACELI E. VILLANUEVA, RUBY C. TUASON, VICTORIA C. BERCILES AND ANTONIO A. BERNARDO, VS. COMMISSION ON AUDIT.

Ruling

WHEREFORE , premises considered, the instant appeal is hereby DENIED . Accordingly, the subject Notices of Disallowance on the grant of additional compensation to the members of the Board of Directors of PICCI, in the total amount of P882,902.06, are hereby AFFIRMED . [47] Dissatisfied, petitioners elevated the case to the COA-CP. [48] Ruling of the COA-CP As aforementioned, the COA-CP affirmed the ruling of the COA Director. [49] It explained that PICCI is a subsidiary corporation organized by the BSP, pursuant to Section 2 of P.D. No. 520 dated July 23, 1974, as amended. [50] For this reason, PICCI is a GOCC owned by the government through the BSP. [51] Thus, like the BSP, the operating funds of PICCI are public in character and must be spent pursuant to applicable laws and regulations governing the disbursement of public funds. [52] In this regard, Section 6 of P.D. No. 520 expressly provides for the suppletory application of the Corporation Code to PICCI, [53] especially on the matter of compensation of the members of its Board of Directors. [54] Along this line, Section 30 of the same law provides that members of the Board of Directors are entitled only to the following compensation: a) reasonable per diem , and b) other compensation may be paid provided that the corporation earned a net income before income tax during the year preceding the payment. [55] Pertinently, Section 8, Article III of the Amended By-Laws of the PICCI specifically restricts the compensation of the members of the Board of Directors to only per diems , [56] which the COA-CP took cognizance in its Decision No. 2002-081 dated April 23, 2002, and which this Court affirmed in Singson v. Commission on Audit ( Singson ). [57] Notably, PICCI incurred net losses in CYs 2009 and 2010, yet it paid petitioners additional compensation which cannot be given at such time that required more prudence in disbursing public funds. [58] Thus, the payment of the subject benefits to them is an irregular transaction, which is proscribed under COA Circular No. 2012-003 dated October 29, 2012. [59] In the same vein, PICCI's budget is subject to existing DBM rules and regulations, particularly DBM Circular Letter No. 2002-02, because it is a subsidiary of BSP, which is under the jurisdiction of the DBM, per Inter-Agency Task Force Memorandum Circular No. 2012-1 dated August 13, 2012. [60] DBM Circular Letter No. 2002-02 explicitly provides that members of the Board of Directors are not salaried officials of the government, which disqualify them from receiving personnel benefits usually granted to salaried employees, such as the subject Medical Reimbursement, Christmas and Anniversary Bonuses. [61] On the payment of Representation Allowance, it bears stressing that this allowance is a form of compensation intended to defray expenses deemed unavoidable in the discharge of office, hence, its payment should be supported by receipts and invoices as proof that the funds were indeed expended in the pe