Wages of CH staff budget exceeded by P192 million

MANILA, Philippines - The Department of Budget and Management (DBM) said that Cebu City’s budget for the salaries and other benefits of its about 5,000 officials and employees for this current year has exceeded its limits by over P192 million.

DBM-7 regional director Carmela Fernan informed the members of the Cebu City Council that after reviewing the city’s 2011 Annual Budget amounting to P4,133,558,195 for the General Fund and the P825,817,224 budget for the Special Accounts, it was discovered that the allocation for personal services has exceeded by P145,136,450.

For the general fund, the total allocation for personal services is P844,160,990 while another P290,294,890 are set aside from the special accounts for a total of P1,134,455,880.

What is only allowable is P989,319,430, which represents 45 percent of the income from the preceding year, which is P2.198 billion.

The DBM also questioned the approval of the P47 million Supplemental Budget No. 1 for this year under the General Fund, which was solely used to fund the granting of incentives to all employees of the city during the 74th Founding Anniversary last February 24 increasing the amount of excess budget for personal services to P192,136,450.

If the city cannot justify the excess, those who received the money will all be asked to reimburse the amount to the government.

“Personal Services” refers to appropriations for the payment of salaries, wages and other compensation of permanent, temporary, contractual, and casual employees of the Local Government Unit (LGU).

The personal services for local government units categorized as first to third class province, city or municipalities, shall not exceed 45 percent of its regular income in the preceding year.

Section 327 of the Local Government Code provides that “items for appropriation contrary to limitations as prescribed by law or in excess of the amounts prescribed shall be disallowed or reduced accordingly.”

When that Supplemental Budget was endorsed by Mayor Michael Rama and approved by the Cebu City Council early this year under Appropriation Ordinance 2266, the city had 4,700 officials and employees. Each was granted P10,000 as productivity enhancement incentive.

The Program on Awards, Incentives for Service Excellence (Praise) Committee earlier recommended full implementation of the Productivity Enhancement Incentive (PEI) of P10,000 for all officials and employees.

Fernan sent a letter dated August 10 for the Cebu City Council through the mayor, but although the mayor’s office had received the letter, it was not endorsed to the council.

Councilor Margarita “Margot” Osmeña, chairperson of the council committee on budget and finance, said she only got a copy of Fernan’s letter when she requested for it from the DBM-7 regional office.

Osmeña has asked the personnel at the Office of the Mayor to explain in writing why the letter was not forwarded to the city council so that the city legislators will know of the DBM’s comment.

Fernan said the appropriation for sanitation allowance to some of the workers under the Department of Public Services (DPS), specifically the street cleaners and garbage collectors, shall be disallowed since it is not among the allowances authorized to be granted to government employees.

The allowances that are allowed to the employees under the so-called statutory and contractual obligations are the health insurance contributions, employees compensation insurance premiums, Pag-IBIG contributions, life and retirement insurance contributions and retirement gratuity and terminal leave.

Other allowances or benefits allowed are personnel economic relief allowance, uniform or clothing allowance, year-end benefits, step increments for length of service, per diem of LGU officials and employees.

But the personal service limitation shall be waived on the following items and activities mandated by law like the absorption of national government personnel transferred on account of devolution, absorption of the cost of devolved hospital services transferred from the province, in the case of newly-created cities; creation of mandatory positions specified under the Local Government Code.

When asked by the reporters yesterday, Rama did not give a categorical explanation, but he assured that the city will really answer the letter through the city budget officer. –/NLQ (FREEMAN)