Dureza to return PhP 977,000 of disallowed fund release while MEDCo chair

DAVAO CITY (MindaNews/22 January) — Presidential Adviser on the Peace Process Jesus Dureza will return nearly a million pesos to the national treasury after the Commission on Audit (COA) ruled with finality that he and other officials of the defunct Mindanao Economic Development Council (MEDCo) are liable for authorizing what turned out to be an “illegal release” of  P996,000 for staple food assistance and amelioration allowance of its employees and officials from 2001 to 2004.

Presidential Adviser on the Peace Process Jesus Dureza on his way to the airport in Rome for his flight to New York Saturday, 21 January 2017. Photo courtesy of OPAPP

“Although I already returned what I personally received myself while still at MEDCo years ago, I will promptly return the remaining total amount due from my own personal funds immediately upon my return to the country,” Dureza said in his January 20 statement sent from Rome, where he attended the opening rites of the third round of formal peace talks between government and the National Democratic Front.

Dureza’s statement did not say how much money he returned. But on Sunday, Dureza who proceeded to New York from Rome, told MindaNews: “1 returned P19,000 so minus that amount (from P996,000).”

That leaves a balance of P977,000 which Dureza vowed to return when he is back in the country.

But Dureza told MindaNews he would request that he be allowed to refund the amount “by ‘gives’ or by installment.”

“I take full responsibility”

In his January 20 statement, Dureza said he was informed that “COA with finality, denied Medco’s appeal and ruled that I together with other MEDCo officials are liable for the illegal release.”

“I take full responsibility for COA-disallowed payments to MEDCo employees some 10 years ago,” said Dureza, a lawyer and former congressman.

He explained that while serving as  MEDCo chair from 2001 to 2004, “the finance department recommended to me to release P456,000 as staple food assistance and P540,000 as amelioration allowance to officials and employees during the Christmas season or year-end, (if my memory is correct). This was to augment their meager pay and to give them incentives for a year’s good performance.”

“I now clearly recall I asked then finance division head (now retired) Ms. Perla Pandan and the executive committee officials as to whether this was allowed under the rules and they assured me this was okay,” he wrote.

He said he asked them on the consequences if COA disallowed the release of funds and was told that all the recipients will have to return what they received.

“I was told this was communicated to the whole staff,” Dureza said, adding he even directed the finance division to “get a written undertaking from the employees that they would return the amount they received if later on required to do so.”

Dureza said that while still at Medco, he was informed that the COA disallowed the fund release. “I promptly returned the amount I personally received. I even wrote an official letter in doing so and I received an official receipt acknowledging the return of the amount,” he said.

Award and Incentives

The COA decision dated December 27, 2016 and signed by chair Michael Aguinaldo, and Commissioners Jose Fabia and Isabel Agito, cited records showing that pursuant to Civil Service Commission (CSC) Memorandum Circular No. 1, series of 2001 and the Program on Award and Incentives for Service Excellence (PRAISE), as approved by the CSC, Regional Office No. XI, Davao City, MEDCo granted Staple Food Assistance and Amelioration Allowance to its officials and employees for a period of three years from 2001 to 2004.

On post-audit, however, the MEDCo Audit Team Leader  issued Audit Observation Memorandum No. 2005-001 dated July 28, 2005 and AOM No. 2005-002 dated February 8, 2005, finding the grant “without authority from the Office of the President or the Department of Budget and Management …  and in violation of Republic Act (RA) No. 6758 or the Salary Standardization Law.”

The decision was affirmed by the Regional Cluster Director,  Legal and Adjudication Sector on October 14, 2005 and November 21, 2005.

Dureza said he authorized the move to seek reconsideration of the COA ruling “to further protect the employees and the staff who would find it difficult to return theirs.”

Dureza stressed that as sole approving authority then, “I personally take FULL responsibility and spare the other employees/officials from liability as ruled by COA.”

The December 27, 2016 COA decision ruled that petitioners who are rank-and-file employees of MEDCo “need not refund the disallowed amounts.”

Citing a Supreme Court decision, the COA ruled that “government officials and employees who unwittingly received disallowed benefits or allowances are not liable for their reimbursement if there is no finding of bad faith” but “public officials who are directly responsible for, or participated in making the illegal expenditures, shall be solidarily liable for their reimbursement.”

The COA ruling said Dureza as MEDCo chair and  Assistant Secretary Eufemia O. Calderon, MEDCo Vice-Chair as approving officers; and Corazon T. Ginete, Director V, Administration and Finance, and Perla R. Pandan, Administrative Officer V as certifying officers as to the necessity and legality of the expenditures, “are solidarily liable to refund the disallowed amounts.”

MEDCo was replaced by the Mindanao Development Authority (MinDA) in 2010. (Carolyn O. Arguillas / MindaNews)