Republic of the Philippines

BATANES STATE COLLEGE

San Antonio, Basco, Batanes
 www.bscbatanes.edu.ph  batanes_bsat@yahoo.com  09057867863

ADMINISTRATIVE AND FINANCE DIVISION

November 28, 2019

SILVESTRA M. MALAKI
OIC-Supervising Auditor
State Universities and Colleges and other Stand-alone Agencies
COA, Basco , Batanes

THRU: EMMA B. ABAD

Audit Team Leader- R2-01

Dear Madam:

This is in reference to Audit Observation Memorandum (AOM) No. 2019-27 received by the
undersigned today, the subject of which is the grant of Mid-year and Year-end Bonus to BSC
employees who are on study leave in the aggregate amount of PhP819,013.61.

DBM Budget Circular Numbers 2019-4 was issued to clarify the grant of mid-year bonus to
government employees on scholarship relative to the rules and regulations on its grant as
provided under DBM Budget Circular Numbers 2016-3 and 2017-2 for FYs 2016, 2017 and
years thereafter. These circulars were issued by DBM to provide rules and regulations and
clarifications on the grant of MID-YEAR BONUS only and NOT covered the grant of year-end
bonus and cash gift.

Executive Order (EO) No. 201, s 2016 was issued modifying the salary schedule for civilian
government personnel and authorizing the grant of additional benefits for both civilian and
military and uniformed personnel. Section 4 of the EO completely states the following:

4.0 Mid-Year Bonus. Beginning FY 2016, a Mid-Year Bonus equivalent to one (1)
month basic salary as of May 15, shall be granted to those who have rendered at least four
(4) months of satisfactory service and are still in the service as of same date, to be given not
earlier than May 15 of every year. This shall be in addition to the Standard Allowances and
Benefits under the Total Compensation Framework embodied in the Congress Joint
Resolution No. 4 (s. 2009). The existing Year-end bonus equivalent to one (1) month basic
salary and Cash Gift at prescribed rates shall be given in November of every year.

Clearly, the preceding provision of EO No. 201 do not prohibit the grant of Year-end Bonus
and Cash Gift.

Let us share to you Republic Act No. 6686 as amended by Republic Act No. 8441, Department
of Budget and Management Budget Circular Nos. 2010-1, 2015-1 and 2016-4 that provided
guidelines for the grant of the year-end bonus and cash gift.

Importantly, the clause, “who have rendered at least four months of service from January 1 to
October 31 of each year and who are employed in the government service as of October 31
of the same year[,]” was maintained. The BSC scholars are still in government service as of
the period covered.
 Republic of the Philippines
BATANES STATE COLLEGE
San Antonio, Basco, Batanes
 www.bscbatanes.edu.ph  batanes_bsat@yahoo.com  09057867863

ADMINISTRATIVE AND FINANCE DIVISION

Also, the total or aggregate service requirement as defined in BC 2016-4 shall include all
actual services rendered while occupying a regular, contractual, or casual position in the
national and/or local government, INCLUDING LEAVES OF ABSENCES WITH PAY
(Emphasis Supplied). The BSC scholars are on study leave as approved by the BSC Board
of Trustees.

It bears emphasis, at this juncture, that the inclusion of these scholars as covered and not
excluded reflects the clear intent of the preceding laws and circulars to grant the year-end
bonus and cash gift therein to BSC employees under study leave.

Going back to the grant of Mid-Year bonus, as can be interpreted in Section 4.3 guideline of
BC 2019-4 which states that:

4.3 A scholar with less than four (4) months of actual performance of duties for the
period of July 1 of the immediately preceding year to May 15 of the current year, and
is still in the service as of May 15 of the current year may be entitled to the Mid-Year
Bonus, subject to the successful completion of the course program and fulfillment of
the conditions stipulated in the scholarship contract.

BSC scholars have rendered less than four months actual performance and still in the service
san Ms. Telmo. The management released their mid-year bonus based on this provision with
the caveat that they shall complete their scholarship program and have fulfilled the pertinent
provisions of their scholarship contract.

It has been a well settled principle in law that benefits are liberally construed in favor of the
employees. In government, benefits are used as an incentive mechanism to encourage
competent individuals to have careers in government. It is often stated that benefits receivable
by public employees are valuable parts of the consideration for entrance into and continuation
in public office or employment. They serve a public purpose and a primary objective in
establishing them is to induce competent persons to enter and remain in public employment
and render faithful and efficient service while so employed.

Dios Mamajes!

Sincerely,

DJOVI R. DURANTE
Chief Administrative Officer