Republic of the Philippines

General Santos City

City Legal Office

April 14, 2016

MEMORANDUM
NO. LO. 16- 035

FOR: HON. RONNEL C. RIVERA

City Mayor

RE: Draft Comment on the Audit Observation Memorandum (AOM)

pertaining to the payment of monthly allowance to judges, city
prosecutors and PAO lawyers and other government officials

On the honoraria for Judges, Prosecutors,

PAO lawyers and other national
Government Officials

The local governments’ grant of monthly allowance to Judges,

Prosecutors and other national government officials has long been
permitted by the Supreme Court.

In the case of Dadole vs COA, G.R. No. 125350, December 3, 2002, the
Supreme Court ruled that limitations prescribed by the Department of
Budget and Management in granting monthly allowances to judges,
through Local Budget Circular 55, is null and void for being violative of
the local autonomy of local governments and of no legal basis, to wit;

“Setting a uniform amount for the grant of additional allowances is

an inappropriate way of enforcing the criterion found in Section 458,
par. (a)(1)(xi), of RA 7160. The DBM over-stepped its power of
supervision over local government units by imposing a prohibition that
did not correspond with the law it sought to implement. In other words,
the prohibitory nature of the circular had no legal basis.” (Emphasis
supplied)

Considering that LBC 62 is similar to LBC 55, as it imposed limitation to

the power of the local government units in granting monthly allowance under
Section 458, par. (a)(1)(xi), of RA 71601, which the Supreme Court declared null
and void, it would be appropriate to say that LBC 62 cannot bind the autonomy
of the local government units regarding the grant of monthly allowances to
judges, prosecutors and other national government officials under RA 7160.

Further, LBC 62 was already repealed by succeeding circulars issued by

the Department of Budget and Management. The requirement however, that the
rate of honorarium given to judges shall not exceed the rate of RATA authorized
for department heads in the city government was already made functus officio by
the pronouncement of the Supreme Court in the above case.

1 (xi) When the finances of the city government allow, provide for additional allowances and other benefits
to judges, prosecutors, public elementary and high school teachers, and other national government officials
stationed in or assigned to the city;

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 Republic of the Philippines
General Santos City
City Legal Office

As regards the honoraria received by the Public Attorney’s Office,

Section 16-E of Republic Act No. 9406 [An Act Reorganizing and
Strengthening The Public Attorney’s Office (PAO), Amending For The Purpose
Pertinent Provisions Of Executive Order No. 292, Otherwise Known As The
“Administrative Code of 1987”, As Amended, Granting Special Allowance to
PAO Officials and Lawyers, And Providing Funds Therefor)], provides:

“SEC. 16-E. Local Government Support. - Local government units,

subject to their capabilities, are authorized to extend financial and other
support in the form of honoraria, free office space, equipment,
furniture, stationery, and manpower to the PAO.”(Underscoring
supplied)

On the other hand, with respect to the honoraria/allowances

received by the prosecutors, paragraph 9 of Section 16, Republic Act No.
10071 (Prosecution Service Act of 2010), provides:

“Subject to Section 20 hereof, the salaries and allowances of

regional, provincial and city prosecutors and their assistants, and the
members of the prosecution staff, including the prosecution attorneys,
shall be paid entirely out of national funds and included in the annual
appropriations of the DOJ: Provided, however, That this provision is
without prejudice to the grant of allowances to the above-mentioned
prosecutors by their respective local governments in amounts not
exceeding fifty percent (50%) of their basic salaries; Provided,
further, That the whole of the allowances or portion thereof, whether
granted by the national or local government shall be exempt from the
income tax.” (Underscoring supplied)

On the honoraria of various City Officials and

Employees

Honoraria is a form of compensation granted to individuals for the

performance of tasks or involvement in activities beyond their regular functions
(DBM Budget Circular 2004-5a). As such, it is intrinsically entwined in the
complexity of the mandate and functions of the individual employee and not of
the overall mandate of the local government unit. Thus, if an employee exercises
a function that is so removed from his mandate as an official of the city
government, equity demands that he or she shall be compensated.

Though membership or acting as an officer or secretariat of a committee

or special body of the city government is not considered in Budget Circular 2007-
2 as an undertaking in a special project, it is submitted that the same should be
given a token of appreciation of the city government.

Section 2.2 of Budget Circular No. 2007-2 dated October 1, 2007

(Guidelines on the Grant of Honoraria Due to Assignment in Government Special
Projects), provides:

“2.2 A special project is a duly authorized inter-office or intra-office

undertaking of a composite group of government officials and
employees which is not among the regular and permanent functions of
their respective agencies. Such undertaking may be locally-funded or

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 Republic of the Philippines
General Santos City
City Legal Office

foreign-assisted, is reform-oriented or developmental in nature, and

is contributory to the improvement of service delivery and enhancement
of the performance of the core functions of an agency or member
agencies.”

It is submitted that circulars cannot possibly comprehend the myriad

functions of the offices of the city government. Thus, the city government would
like to invoke its autonomy to adjust timely to the demands of the complexities
of its many functions, including recognition of the contribution of the members,
officers and secretariat of its many special bodies.

Section 22 (d), Republic Act No. 7160 (Local Government Code of 1991),
provides:

“(d) Local government units shall enjoy full autonomy in the

exercise of their proprietary functions and in the limitations provided in
this Code and other applicable laws.”(Underscoring supplied)

It is noteworthy that special bodies/committees had been exercising

myriad functions on top of their mandated powers and functions as the city
government during these challenging modern times is called upon to act
multifarious functions that it would take the lawmakers time to craft laws to
adjust to each one of these.

We submit however to the authority of the COA in determining IIUUEE

transactions. Thus, if the COA has other interpretation, it is recommended that
the city undertakes the following necessary measures:

a) Honoraria of members, secretariat of special committees/special

bodies of city government shall be determined based on the
complexity of their functions and that members of the committees
who are exercising functions not found in their mandate shall be
entitled to receive honorarium.

For your guidance.

ARMANDO T. CLARIN
City Legal Officer

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