COMMISSION ON AUDIT MEMORANDUM NO.

98-027 August 24, 1998

TO

SUBJECT:

All Directors/Officers-In-Charge, Heads of Auditing Units and All Others

Concerned
Letter dated June 9, 1998 of the Undersecretary of the Department of Budget
and Management (DBM) clarifying the grant to contractual personnel of certain
allowances and per diems pursuant to Section 44 of the General Provisions of
the General Appropriations Act of 1998.

For the information and guidance of all concerned, quoted hereunder is the full text of
the letter dated June 9, 1998 of the Undersecretary of the Department of Budget and
Management (DBM), Manila, addressed to this Commission.
"June 9, 1998
"The Honorable
The Chairman
Commission on Audit (COA)
Don Mariano Marcos Avenue
Diliman, Quezon City
Sir:
This refers to the attached letter of the COA Resident Auditor, BIR Revenue Region No.
13, Cebu City, requesting clarification on whether or not the PERA, additional compensation,
bonus and cash gift pertain to the allowances granted to contractual personnel pursuant to
Section 44 of the General Provisions of the CY 1998 GAA, and also, whether or not claims for
per diem are allowable as said Section 44 already provides 20% premium which cover per
diems.
Under existing guidelines, contractual personnel may be granted the usual personnel
benefits authorized for regular government employees, except leave benefits and step
increments, subject to compliance with eligibility requirements prescribed by laws rules and
regulations, the stipulations in their respective contracts of employment, and the following
conditions:
1.

that they are hired in accordance with the provisions on Employment of

Contractual Personnel under the annual General Appropriations Act (GAA);

2.

that they render full-time service, observe regular office hours; and keep bundy
clock time like regular government employees;

3.

that there is an element of control or an employer-employee relationship

between them and their employer, and

4.

that their salaries do not exceed 120% of the minimum salaries of comparable
regular positions.

Thus, except for leave benefits and step increments, the PERA, additional

compensation, bonus and cash gift may still be granted pursuant to Sections 48, 49 and 38,
respectively, of the CY 1998 GAA, as these compensation are not those contemplated as
allowances authorized under said Section 44 of the General Provisions of the CY 1998 GAA
for contractual personnel.
Allowable travel and related expenses incurred in the course of official travel of
government personnel regardless of rank and position are also authorized under Section 40 of
the General Provisions of CY 1998, GAA subject to the provisions of EO Nos. 248 and 248-A s.
1995. Hence, contractual personnel may still claim travel expenses incurred in connection with
the performance of their duties and responsibilities.
For information and guidance.
Very truly yours,
(SGD.) IRENE G. DALEJA
Undersecretary"
All concerned are hereby advised accordingly.
(SGD.) CELSO D. GAGAN, Chairman