G.R. NO. 156537 - PUBLIC ESTATES AUTHORITY, VS. COMMISSION ON AUDIT.

Ruling

Accordingly, the statute provides for the repeal of all laws, decrees, executive orders, corporate charters and other issuances, or parts thereof, that exempt agencies from the coverage of the System, or that authorize and fix position classification, salaries, pay rates or allowances of specified positions, or groups of officials and employees or of agencies, which are inconsistent with the System. [6] However, the principle of non-diminution of pay is observed as the law authorizes incumbents as of July 1, 1989 to receive salaries and/or allowances over and above those authorized under R.A. No. 6758. [7] Sometime in January 1999, petitioner granted its employees 191 sacks of rice with a total cost of P219,650.90. On post-audit, the COA resident auditor disallowed 130 sacks amounting to P149,500.00 under Notice of Disallowance No. 99-012D-99 dated May 4, 1999. [8] The resident auditor ruled that the grant of rice allowance to 130 personnel hired after July 1, 1989 has no legal basis. He relied on Section 12 of R.A. No. 6758 providing that only incumbent personnel as of July 1, 1989 are entitled to receive additional allowances. In a letter dated July 16, 1999, petitioner sought a reconsideration of the disallowance invoking, among others, De Jesus v. Commission on Audit [9] holding that the DBM Corporate Compensation Circular No. 10 discontinuing without qualification all allowances and fringe benefits granted to personnel on top of their basic salaries effective November 1, 1989 tends to deprive government workers of their allowances and additional compensation needed to keep body and soul together. Petitioner filed with the office of its resident auditor a request for reconsideration but it was denied. Hence, petitioner interposed an appeal to the Director of the then Corporate Audit Office (CAO II). However, in its 1 st Indorsement dated April 5, 2000, petitioners appeal was denied. On May 10, 2000, petitioner filed with the COA a petition for review, followed by a supplemental petition dated December 6, 2000. Petitioner alleged that Section 12 of R.A. No. 6758 allows its employees hired after July 1, 1989 to receive the benefits granted to incumbents as of that date. On December 29, 2000, the COA rendered its assailed Decision denying the petition. The COA ruled that the rice subsidy granted to petitioners employees may not be given to employees hired after July 1, 1989. Only incumbents as of July 1, 1989 are entitled thereto, thus: Section 12 specifically enumerates the allowances and benefits which are not integrated into the standardized salary rates. Other than those enumerated and those that may be determined by the DBM, such other additional compensation whether in cash or in kind, which are not integrated into the prescribed salary rates shall continue to be authorized only for incumbents . The law is clear in itself. Petitioner filed a motion for reconsideration, but the COA denied the same in its Resolution dated August 20, 20