COA flags San Fernando over hiring irregularities

CEBU, Philippines — The Commission on Audit (COA) has cited the Municipality of San Fernando for irregularities in its hiring of job order (JO) workers, noting the absence of formal procedures, lack of written contracts, and the payment of wages below the prescribed minimum.

In its 2024 Annual Audit Report, COA said the local government unit (LGU) employed 466 of its 550 workers—or about 85 percent of its total workforce—under job order arrangements despite having no internal policies or guidelines governing recruitment, wage setting, and employment conditions. Only 84 workers held permanent or co-terminus plantilla positions.

While Daily Time Records (DTRs) and accomplishment reports were submitted to support payroll processing, auditors found that no formal job order contracts were executed between the municipality and its JO workers.

Instead, the LGU relied on memorandum orders signed by the mayor and the workers, which officials believed were sufficient to justify employment and compensation, COA said.

The audit also found that the municipality had no internal policy specifying qualifications, hiring procedures, or standardized wage rates for job order workers. Municipal officials told auditors that hiring is based on department requests that include project proposals and suggested pay rates, subject to approval by the Office of the Mayor.

COA further reported wide disparities in daily wages, ranging from P400 to P1,459.78. Of the total, 374 workers, or about 80 percent, were paid below the minimum wage of P501 per day for Class A areas in Central Visayas, including San Fernando, as prescribed by the Department of Labor and Employment (DOLE).

The audit said this practice violates Republic Act No. 7160, or the Local Government Code, as well as DOLE Wage Order No. ROVII-25, which took effect on October 2, 2024.

During an inspection on February 18, 2025, COA also observed discrepancies in assignment records, with some JO workers reporting to offices different from those indicated in their documents. Some workers were not wearing official identification cards or uniforms, while others on official travel failed to leave approved pass slips, making verification difficult.

COA emphasized the need for clear internal guidelines to ensure standardized hiring practices, transparency, and the protection of workers’ rights. It stressed that written job order contracts are essential to clearly define the scope of work, compensation, duration of engagement, and benefits.

The audit report also cited constitutional provisions on labor protection and a Supreme Court ruling affirming that labor laws apply to government workers, including those engaged under job order arrangements.

The findings were raised despite earlier reminders from the Provincial Finance Committee for the municipality to strictly comply with guidelines on employment under institutional contracts and job orders, pursuant to COA-DBM Joint Circular No. 2, Series of 2020, as amended in 2022.

COA concluded that the absence of policies, contracts, proper documentation, and compliance with wage regulations casts doubt on the propriety and regularity of the municipality’s personnel expenditures.

The audit agency recommended that the municipal government immediately establish standardized hiring procedures and wage policies. — /FPL (FREEMAN)