The Commission on Audit (CoA) has confirmed that the board of trustees of the Metropolitan Waterworks and Sewerage System (MWSS) has made the state-owned firm a virtual milking cow as claimed by President Benigno “Noynoy” Aquino III in his first State-of-the-Nation Address (SONA).

The 2008 annual audit report of MWSS showed that government auditors found at least nine irregularities in the disbursement of funds, mostly expenditures covering unauthorized incentives and perks, including expenses  for executive medical check up, for its officials and employees.

The government-run water agency was chaired by lawyer Oscar Garcia during that time while its administrator was Lorenzo Jamora.

Gabriel Claudio, political adviser to former President and now Pampanga Rep. Gloria Macapagal-Arroyo, took over as board chairman only last March, the MWSS board secretariat said.

The 2008 audit findings made by a team of CoA audit examiners led by Auditor IV Divina Alagon showed that the corporate budgets of the MWSS Corporate Office and the MWSS Regulatory Office, totaling P332.79 million and P176.80 million, respectively, were not reviewed and approved by Arroyo, through the Department of Budget and Management (DBM), as required by existing laws and regulations.

“Without the requisite approval, all payments made in 2008 are considered illegal and may be subjected to audit disallowance,” CoA warned.

Government auditors said the P60 million MWSS Car Assistance Program is considered irregular because it had no legal basis and was not approved by the President.

“Consultants’ stated duties duplicate the functions of regular employees and were paid benefits on top of their stipulated compensation,” CoA also noted.

The consultants have also received year-end financial assistance and educational assistance which are both illegal.

State audit examiners also chided the board for authorizing the grant of perks and allowances such as productivity incentive bonus, discretionary allowance, executive check up and uniform allowance.

Extraordinary and miscellaneous expenses (EME) ranging from P300,000 to P1,920,000 annually were likewise granted officials and employees although the practice had been ordered stopped in 2007.

The board of trustees insisted that the EME is legal because the MWSS charter authorized the body to “fix emoluments” of the firm’s employees and officers.

“We do not agree with the management’s contention because the MWSS being a government-owned and -controlled corporation is covered by Republic Act 6758 and follow the compensation and position classification system,” CoA said.

According to CoA, the granting of hazard pay, totaling P1.74 million in 2008, and the continuous distribution of cost of living allowances are both unauthorized acts and should be stopped.

Audit experts said the MWSS board also authorized the payment of P3.97 million in RATA which is without legal basis, saying that those who received transportation allowances must refund the amount to the government.