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COMMISSION ON AUDIT CIRCULAR NO.

76-25-B June 30, 1976

TO : All Heads of Departments, Bureaus and Offices of the National Government,


Managing Heads of Government-owned or controlled Corporations, Boards and
Commissions, Provincial Governors, City Mayors, Regional Directors of the COA,
Provincial and City Auditors, Provincial and City Treasurers and Others
Concerned.

SUBJECT : Policies on the payment of additional compensation, such as allowances,


honoraria, incentive fees, service fees, etc. made out of funds of government-
owned or controlled corporations.

PURPOSE : To supplement COA Circulars No. 76-25 and 76-25A dated March 31, 1976 and
June 30, 1976, respectively, so as to include within their coverage, subject to
modifications herein stated, payment of additional/extra compensation to officials
and employees of government-owned and/or controlled corporations and provide
a uniform accounting treatment and prescribe a system of processing the same.

SCOPE : The regulations prescribed in this supplementary Circular shall cover payments
of additional compensations the sources of which are derived from funds of
government-owned or controlled corporations as well as private sources for
service rendered and/or allowances given for activities which are connected with
the regular duties or functions of the official or employee concerned.

In line with the general policies prescribed in COA Circular No. 76-25 dated March 31,
1976, as re-stated/amended by COA Circular No. 76-25A dated June 30, 1976, the following
regulations are hereby prescribed for payment of additional compensation out of the funds of
government-owned or controlled corporations.

1. Additional compensation such as allowances, honoraria, service fees, incentive


fees, etc., shall be subject to the 50% limitation as prescribed in COA Circulars No.
76-25 and 76-25A when the sources thereof are derived from funds of government-
owned or controlled corporations or private sources as authorized by law. The
additional compensation herein treated does not include regular fringe benefits
ordinarily included in or attached to the regular position of the official or employee
concerned such as cost of living allowance, longevity pay, uniform allowances, etc.

2. The provisions of this Circular shall apply to payment of additional compensations


for services rendered which are part of the regular duties and functions of the
officials and employees of government-owned and controlled corporations, self-
governing boards and commissions as well as of the national and local
governments, and shall include service fees, incentive fees or commissions given
by the Government Service Insurance System and other government-owned or
controlled corporations as authorized by the President, for the remittance of
premiums, amortizations, interests, etc., as well as service fees paid by private
firms for services rendered to them.
3. The 50% limitation which is to be reckoned on the basis of the regular or basic
annual salary of the recipient official or employee shall apply only when the law,
presidential decree, presidential order or directive, granting or authorizing the
payment of additional compensation does not specifically fix the amount thereof. It
shall not include additional remunerations of national and local officials who have
been appointed or designated by the President as members of the board of
directors of government-owned or controlled corporations and those ex-officio
officials of said corporations which are explicitly provided by law and specifically
fixed and authorized by presidential directives or orders. However, such
remunerations shall be paid to the official or employee concerned through the
Cashier of his mother agency or office as provided in No. 4 below.

4. The additional compensations herein treated whether or not the same are subject
to the 50% limitation shall be remitted by the paying entity to the office of the
recipient official or employee in line with the procedure prescribed in Items 3 and 4
of the Statement of Policies under COA Circular No. 76-25A dated June 30, 1976.

5. All collections received representing additional or extra compensations of the


officials and employees concerned shall be treated as trust liabilities. Any
unallocated balance of such collections shall continue to be treated as trust
liabilities and shall be used for further strengthening the office of the recipient
official or employee.

6. The extra or additional compensation referred to in this supplementary Circular


shall be paid by payroll or voucher. The provisions of COA Circular No. 76-26
dated April 6, 1976, shall apply in the processing and payment of additional
compensation contemplated herein.

All circulars, orders, memoranda and existing rules and regulations in conflict herewith
are hereby revoked or amended accordingly.

This Circular shall take effect on July 1, 1976. Thus, the honorarium or additional
compensation received from July 1, 1976 to December 31, 1976, shall not exceed the salary for
the same six-months period. However, from January 1, 1977 to December 31, 1977 and
succeeding years, the 50% limitation shall be computed on the basis of the regular annual
salary of the grantee. Strict compliance with this Circular by all concerned is hereby enjoined.

(SGD.) FRANCISCO S. TANTUICO, JR., Acting Chairman