COA questions CPA's P14 million hazard pay for workers

CEBU, Philippines —  The Commission on Audit questioned why the Cebu Port Authority paid hazard pay totaling P14.020 million to its outsourced workers engaged institutional contract of service because it allegedly violated certain administrative circulars.

According to government auditors, workers under the institutional contract of service remain to be employees of the contractor or service provider, which is the one responsible for providing the benefit to them.

Among the contract workers whose hazard pays were flagged by COA are those rendering catering, janitorial, security and other support services to the CPA.

The payment of hazard pay to these workers, COA added, is not covered under Joint Circular No. 1, series of 2017, issued by the Civil Services Commission, COA, and Department of Budget and Management. It is also reportedly violative of COA-DBM Joint Circular No. 1 dated March 19, 2020.

Due to the payments, COA said that CPA incurred irregular expenditure as the disbursement deviates from the joint circulars. Hence, the state auditor demanded that the amount paid be refunded.

Explanation

CPA, in its reply, said the person who should be liable for the payment of services is ordinarily the one who benefited from it. In this case, it said, since the outsourced workers worked for the CPA -- although they are employees of the contractor or service provider, it CPA that should pay for their compensation and benefits.

COA maintained, though, no law has made mandatory the grant of hazard pay in relation to COVID-19 for employees in the private sector.

It also said that the personnel under institutional contracts of service are still employees of the contractor or service provider, or the private entity, despite being contracted by a government agency.

“This is in contrast to the COS workers or job order workers who are directly hired by government or its agencies and were covered by the entitlement of hazard pay,” COA explained.

Not supported

Meanwhile, COA also took notice of the grant of COVID-19 hazard pay totaling P2.288 million, which was not supported with clear authority from the head of CPA to physically report for work during the implementation of the enhanced community quarantine.

Some inconsistencies were also noted in the documents supporting the payment of hazard pay.

To this, CPA explained that the authority to physically report for work during ECQ was delegated by the Cebu Port Commission, being the governing body of the authority, to the general manager. It added that the general manager, in turn, is also empowered to delegate and cascade instructions and/or issue necessary orders to the department head for implementation within his or her area of responsibility.

During the exit conference, COA and CPA agreed to submit to the audit team the certification duly signed by the head of agency and other pertinent documents to attest that those who were paid with hazard pay during the period of ECQ were authorized to receive so, especially those who were initially set or scheduled to work from home but reported to their station or office. — JMD (FREEMAN)