THE SUPREME Court (SC) has dismissed the petition of Hagonoy Water District (HWD), a government-owned and controlled corporation, to allow its disbursement of rice allowances to employees and directors in 2012 amounting to P558,000.   

In the High Court’s decision dated March 2 and made public on Sept. 17, it held that the board members of HWD who approved the release of the bonuses “fell short of the standard of good faith and diligence required in the discharge of their duties” as they relied merely on the basis of a 1992 board resolution.   

The water district’s board of directors released Resolution 16 in 1992 to give rice allowances to its employees, but the high court held that under Republic Act 6758 that took effect July 1, 1989, “all allowances of government officials and employees, including those in the GOCCs, are deemed included in the standardized salary rates.”   

The Supreme Court invalidated the claim of HWD officers that the grant of rice allowances “had long been an established practice in HWD,” and asserted that a “practice, no matter how long continued, cannot give rise to any vested right if it is contrary to law.”   

As such, the SC affirmed with modification the decision of the Commission on Audit (CoA) in 2014 to disallow the rice allowances totaling P408,000 to employees hired after July 1, 1989 and the additional allowances awarded to HWD’s board of directors totaling P150,000.   

The SC explained that under Republic Act 9286, additional allowances to board directors must first be approved by the Local Water Utilities Administration before disbursement, which the HWD directors failed to do.  

The CoA earlier held the HWD directors solely liable to refund the disallowed amounts, but the SC ruled that the employees must also return what they received.  

The CoA’s 2014 ruling also disallowed the excess disbursement of anniversary bonuses to employees totaling P174,000. It held that Administrative Order 263 limits the amount of anniversary bonuses to only P3,000 per employee, but HWD disbursed P5,000. — Bianca Angelica D. Añago  

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