COA report on excessive honoraria, allowances baseless: OSG

The Office of the Solicitor General said Friday there is no basis for the Commission on Audit (COA) 2017 report that found Solicitor General Jose Calida and 15 other OSG lawyers as having received “excessive allowances and honoraria.” (PNA photo)

MANILA — The Office of the Solicitor General said Friday there is no basis for the Commission on Audit (COA) 2017 report that found Solicitor General Jose Calida and 15 other OSG lawyers as having received “excessive allowances and honoraria.”

The 2017 COA audit of the OSG noted that its lawyers were allegedly paid PHP10.77 million in honoraria and allowances for services rendered to their client government agencies.

In a statement from the agency’s spokesperson, Hector Calilung, the OSG said COA relied upon a circular that limits an OSG lawyer to receiving honoraria and allowances amounting to 50 percent of his or her salary.
“But this circular — No. 85-25-E — cannot prevail over laws, such as Republic Act (RA) No. 9417, or the law strengthening the OSG, which states OSG lawyers may receive honoraria and allowances without a cap to the amount,” the statement reads.

“There is therefore no basis for the reported COA finding of alleged payment of ‘excessive honoraria and allowances’. This issue is not new. It has been ongoing for the past five years since the time of Solicitor General Florin Hilbay,” it added.

The OSG maintained that it has consistently acted within the confines set by law, noting that the honoraria and allowances were paid in accordance with the law, citing Section 1(i) of Presidential Decree No. 478 (Defining the Powers and Functions of the Office of the Solicitor General) and Section 35(9), Chapter 12, Title III, Book IV of Executive Order No. 292 (Administrative Code).

“These provisions authorize the OSG lawyers to receive allowances and honoraria for the legal services they render without qualification as to the number of agreements with client agencies, and without limitation/cap as to the amount. The authority of these agencies to pay OSG lawyers honoraria and allowances for services rendered is restated in Section 8 of RA No. 9417 (An Act to Strengthen the Office of the Solicitor General),” the OSG said.

COA, however, said these allowances were not taxed properly, “thus, the benefits received were not properly monitored for taxation purposes.”

The commission recommended that the OSG should refund the excess amount and deposit it in its trust fund.

Calida, who earns PHP1.827 million annually, was reported to have received PHP8.376 million in honoraria and allowances last year. Given his salary, he was only provided under the circular a maximum allowable allowance of PHP913,950.

State auditors had flagged Calida over the same issue in 2016.

The computation was based on RA 9417 or the OSG law that allows officials of the office to receive honoraria and allowances but a COA circular limits the allowances to just 50 percent of their respective basic annual salary.

“Laws, rules and regulations need to be harmonized in their implementation. While RA No. 9417 granted authority to OSG lawyers to receive honorarium, COA Circular No. 85-25-E puts limitation in the receipt thereof,” the COA report reads.

The OSG, however, said that it is a settled rule that an administrative circular cannot amend or repeal a provision of law.

“Moreover, COA Circular No. 85-25-E was issued on April 25, 1985. RA No. 9417, which does not limit the authority of the agencies to pay OSG lawyers for their services, was passed on March 30, 2007,” it stated.

“The client agencies of the OSG executed contracts for the payment of OSG allowances. COA certainly cannot render these contracts ineffective by a mere administrative circular. To allow COA Circular No. 85-25-E to prevail would violate the constitutional prohibition against impairment of contracts,” it added.

On the COA observation that 39 units of network switch cabinets were procured for PHP18 million and delivered on Feb. 10, 2017, the OSG said these remain non-utilized.

The OSG Case Management Service had already prepared for the installation of these units prior to delivery but due to various factors, including space constraints and the insufficient number of personnel, the OSG said it was constrained to temporarily suspend the installation in some legal divisions and the full installation of the cabinets is expected to be completed this month.

Meanwhile, on the COA observation on excessive claims for local and foreign travel allowances amounting to PHP53,796 and PHP78,096.64, respectively, the OSG said these amounts are un-utilized cash advances for travel expenses issued to its officers and employees in 2017, and had already been refunded upon liquidation within the first quarter of 2018.

“We must also remember that the OSG, in its capacity-building seminars abroad, was granted exemption from Administrative Order 103 series of 2004 in an Office of the President Memorandum dated 16 January 2017,” the OSG said.