Government agencies will again release the uniform and clothing allowance of civilian government personnel in April so we thought to provide the common COA audit findings on uniform and clothing allowance to guide our colleagues in-charge of releasing or paying said allowance.

These findings are based on available data retrieved from the Commission on Audit official website and other relevant sources.

Audit Findings 1: Improper Recording of Uniform and Clothing Allowance in the books of accounts

In an audit report issued by the Commission on Audit, an LGU inappropriately recorded the grant of uniform and clothing allowance under the Repairs and Maintenance Expenses — Buildings and Other Structures account instead of under the Uniform and Clothing Allowance account.

Under the Revised Chart of Accounts for National Government Agencies, the Uniform and Clothing Allowance is defined as follows:

Uniform and Clothing Allowance
Debit
50102040

This account is used to recognize the fixed amount granted to authorized government officials/employees for the upkeep/replacement of clothing/uniform paid in cash or in kind. This account shall be closed to the Revenue and Expense Summary account.

Revised Chart of Accounts for NGAs

Accordingly, COA recommended to the Management of said LGU to direct its Accountant to make the necessary adjustments in the books of accounts.

On the other hand, you may have observed in the said audit report that the uniform and clothing allowance was granted to job order workers. The legality of the said grant is another matter as there is no information provided in the audit report discussing the context of the said grant.

Nevertheless, we just note that under the guidelines on the grant of uniform and clothing allowance, those whose services are engaged through job orders, contract of service and other similarly situated are not entitled to the uniform and clothing allowance.

Audit Findings 2: Incorrect charging of Uniform and Clothing Allowance

A local government unit (LGU) in Pangasinan was reminded by COA through its audit report to charge its uniform and clothing allowance to its budget (appropriations) for Personnel Services (PS) instead of “Other Supply Expenses” which is under Maintenance and Other Operating Expenses (MOOE).

Under Item No. 11 of Budget Circular No. 2018-1 dated March 8, 2018, the DBM provides that the grant of uniform and clothing allowance in LGUs shall be subject to the Personnel Services limitation in LGU budgets pursuant to Sections 325(a) and 331(b) of R.A. No. 7160 or the “Local Government Code of 1991.”

Audit Findings 3: Irregularities in the Procurement of Uniforms and Disbursement of Funds

In the guidelines issued by the Department of Budget and Management (DBM) on the grant of Uniform and Clothing Allowance, there are three (3) options to which the allowance may be given, namely: 1) through a bidding process, 2) through textile materials and cash; and 3) through cash.

In 2012, the Commission on Audit issued a Notice of Disallowance (ND) to the Subic Bay Metropolitan Authority (SBMA) (GR No. 230566 — SBMA vs. COA) due to the following reasons:

• The uniform requirements of the departments were not included in the 2010 and 2011 Annual Procurement Plans (APP);

• Management failed to post the procurement and the results of bidding and related information in the PhilGEPs bulletin board;

• The procurement process in each department was not conducted by a duly-created Bids and Awards Committee (BAC); and

• Uniforms were procured through negotiated procurement without adhering to the set criteria, terms and conditions for the use of Alternative Methods of Procurement.

COA said, absence of the above requirements/documents constituted irregular transactions as defined under COA Circular No. 85-55A and Section 162 of GAAM Volume I. Pursuant to Section 10 of COA Circular No. 2009-006 dated September 15, 2009, irregular disbursements may be disallowed in audit.

However, in this particular case, the Court ruled that the employees/officials concerned who were involved in the procurement process are not required to refund the amounts disallowed in audit as “the good faith exercised by the petitioners exempt them from liability under the Notice of Disallowance issued to them by the Commission on Audit.”

We recommend that you read the whole proceedings of the case to appreciate and understand the decisions of COA and the Supreme Court. You can read the case here.

Audit Findings 4: Excessive and unauthorized grant of Uniform and Clothing Allowance

In a news by GMA News Online in 2019, it said that “PCSO yet to settle P2.067 billion expenses disallowed by COA” among which is an “P8.897 million worth of excess representation and transportation allowance and clothing allowance”.

It also reported in 2015 that COA tells PCSO to return P286M of unauthorized remunerations for 2014. Among the unauthorized remunerations reported in the said news is an alleged “excess [in] clothing/uniform allowance [of] P3,255,000.

We note that in 2014, the authorized uniform and clothing allowance under the General Appropriations Act was P5,000 per year. At present it is P6,000.00 per year.

Similarly, an LGU in the Province of Negros Oriental was also reminded by COA to comply with the limitations and regulations on the grant of uniform and clothing allowance.

In its audit report in 2014 for the LGU concerned, COA noted that the LGU procured and distributed various shirts amounting to P108,765 to its regular personnel and job order workers in addition to [then] P5,000.00 uniform and clothing allowance.

Point of Discussion (kindly put your insights in the comments section below): 

Agencies sometimes procure shirts for official occasions, events and/or activities; should this be charged against the uniform and clothing allowance?

Audit Findings 5: Granting of Uniform and Clothing Allowance to Unauthorized Employees or Workers

An LGU was directed by COA to refund the uniform and clothing allowance it granted to its job order workers.

In its audit report in 2011 for the said LGU, COA said the LGU spent a total of P85,915.00 for the uniforms of job order personnel in violation of Budget Circular No. 2003-8.

The said circular provides that the grant of uniform and clothing allowance does not apply to those who are hired on job order basis, consultants, experts, student laborers, apprentices, laborers of contracted projects (pakyaw), mail contractors including those paid on piecework basis, and others similarly situated, among others.

Audit Findings 6: Unequal grant of uniform and clothing allowance

Pursuant to Item 6.3 of Budget Circular No. 2018-1 dated March 8, 2018 if funds in GOCC or LGU budgets are not sufficient to implement fully the uniform and clothing allowance authorized for the fiscal year it may be granted at lower but at uniform rates for all qualified personnel.

According to COA, a local water district violated this provision when it granted P6,000.00 and P2,500.00 each of uniform and clothing allowance to its regular and casual employees, respectively.

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