Landbank clarifies report on allowances

We wish to clarify the article “COA flags P710M given to execs, workers in government firms” (10/31/18).

It reported that the Commission on Audit (COA) questioned Landbank over allowances of P196.25 million, which we deem erroneous and inaccurate.

First, the amount in question was P67.12 million, and not P196.25 million as reported.

Second, Landbank maintains that the COA Audit Observation on the “overpayment of P67.12 million” is not a COA disallowance but an observation, and has been the subject of discussions between Landbank and the COA.

This was duly explained by Landbank to the COA in reply to its Audit Observation Memorandum (AOM) dated May 10, 2018.

In the said AOM, the COA cited that there was an overpayment of the Collective Negotiation Agreement (CNA) Incentive for CY 2016 of P67.12 million, or P8,550 for each Landbank employee.

The COA claimed that the payment of the CNA Incentive for 2016 amounting to P196.25 million was sourced from the savings computed based on the corporate budget approved by the Landbank Board, instead of the budget approved by the Department of Budget and Management (DBM), which resulted to the overpayment.

Since it was an observation, the COA recommended for Landbank to seek clarification from the DBM, which acknowledged that Landbank adhered to the provisions of the DBM Circular for the grant of the CNA Incentive.

Landbank maintains there was no overpayment, because it sourced the CNA Incentives from the allowable Maintenance and Other Operating Expenses (MOOE) allotment in 2016, which, according to the DBM, is within the approved budget for Landbank.

Furthermore, the DBM clarified that government-owned and -controlled corporations are given flexibility in the use of the MOOE budget, provided that “actual expenses incurred on each object of expenditure must be equal to or less than the board’s approval level; and actual total MOOE does not exceed the DBM-approved level.”

Landbank complied with both requirements, hence there was no
overpayment.

Through the years, Landbank has strictly adhered to the COA rules and regulations, and continues to comply with government policies.

CATHERINE ROWENA B. VILLANUEVA,
First Vice President,
Corporate Affairs Department,
Land Bank of the Philippines

REPLY:

Contrary to Ms Villanueva’s letter, the article never mentioned the word “disallowance,” which I am aware specifically refers to the COA’s act of ordering the subject agency to return the unlawfully used public funds to the government.

Figures mentioned in the article are directly lifted from the COA’s annual financial report (Page 264) and were only edited for clarity and style.

VINCE F. NONATO,
Reporter,
Philippine Daily Inquirer