COA calls out Bogo over bonus

CEBU, Philippines — The Commission on Audit (COA) has questioned Bogo City’s ?1,149,500 payment for the charter day bonus in 2025. The city granted ?1,000 each to its regular and job order (JO) personnel under City Ordinance No. 012-2023.

COA said the payment was made during a non-milestone year and lacked the required statutory authority.

The audit cited Section 12 of Republic Act No. 6758, or the Salary Standardization Law, which provides that allowances and additional compensation are generally deemed included in standardized salary rates unless specifically authorized by law or competent authority.

COA also cited Local Budget Circular No. 65, which governs anniversary-related incentives.

Under the circular, an anniversary bonus may be granted only during milestone years, beginning with the 15th anniversary and every fifth year thereafter.

The circular also prohibits the grant of another bonus or allowance of a similar nature in connection with an LGU anniversary.

Bogo City was chartered on June 16, 2007, and celebrated its 15th milestone anniversary in 2022. Thus, COA said the next authorized milestone year is 2027.

The ?1,000 Charter Day Bonus granted in 2025 was therefore made during a non-milestone year. COA also questioned the inclusion of JO personnel in the payment, noting that JO workers do not have an employer-employee relationship with the government and are not entitled to statutory bonuses.

The city previously justified the bonus by citing City Ordinance No. 012-2023 and the principles of local and fiscal autonomy under Republic Act No. 7160, or the Local Government Code.

Management argued that the ordinance had a presumption of validity and that the ?1,000 payment was a modest gesture of appreciation, particularly for JO workers whose daily rates were considered low.

COA rejected the justification, saying the city’s authority to determine compensation remains subject to national laws and regulations.

It stressed that Section 81 of the Local Government Code requires local government compensation to conform with Republic Act No. 6758.

Thus, a local ordinance alone cannot serve as sufficient authority for a personnel incentive that is prohibited or not authorized under national compensation rules.

COA noted that the city had already been warned about the same issue during the 2024 audit through Audit Observation Memorandum No. 2025-011(2024), dated March 13, 2025.

Despite the previous finding, the city again granted the bonus in 2025.

COA said the recurrence indicated continued noncompliance with fiscal regulations and resulted in unnecessary government expenditures that could have been used for other priority projects.

The audit team recommended that the city discontinue the annual Charter Day Bonus and strictly comply with the five-year milestone requirement when granting anniversary-related incentives.

During the exit conference, the City Accountant said the Charter Day Bonus would not be granted in 2026 and would instead be granted in 2027, the next milestone year.

COA noted the commitment but maintained that the bonuses granted in 2024 and 2025 were made during non-milestone years and were therefore outside the conditions prescribed under Local Budget Circular No. 65.

Despite the deficiencies cited in the audit observations, COA issued an unmodified opinion on Bogo City’s 2025 financial statements.

The audit covered the city’s Statement of Financial Position as of Dec. 31, 2025; Statement of Financial Performance; Statement of Changes in Net Assets/Equity; Statement of Cash Flows; Statement of Comparison of Budget and Actual Amounts; and accompanying notes.

COA said the financial statements fairly presented, in all material respects, the city’s financial position and financial performance for the year in accordance with the International Public Sector Accounting Standards.

The audit was conducted in accordance with the International Standards of Supreme Audit Institutions.  (CEBU NEWS)