Cebu City Proposes Installment Plan for Employee Bonus Repayments to COA
Cebu City employees could soon benefit from a more manageable repayment process for bonuses or allowances disallowed by the Commission on Audit (COA). A newly proposed ordinance aims to allow these repayments to be made in installments, reducing potential financial hardship while ensuring the city recovers public funds efficiently.
12-Month Repayment Cap and Employee Protections
Councilor Alvin Arcilla has filed an ordinance that permits the Cebu City Government to deduct disallowed amounts from employees' salaries over a period not exceeding 12 months. This measure includes safeguards to protect workers: monthly deductions cannot reduce take-home pay below legally mandated minimums, ensuring basic financial stability.
Arcilla emphasized that sudden refund requirements can cause significant financial distress for employees and lead to adverse administrative consequences for officials. The deductions will only take effect after a COA Notice of Disallowance becomes final and executory. Employees must receive written notice detailing the total amount to be refunded and the corresponding repayment schedule, promoting transparency and fairness.
Liability of Officials and Implementation Oversight
The ordinance clarifies that approving or certifying officials remain fully liable under COA rules, civil service laws, and the Anti-Graft and Corrupt Practices Act. This ensures accountability while the repayment plan is in place. Implementation will be overseen by key city offices, including the City Treasurer's Office, City Accounting Office, Human Resource Management Office, and City Legal Office, to ensure proper execution and compliance.
Arcilla stated that the measure aims to create a fair and humane process that balances regulatory compliance with employee welfare. It prevents sudden lump-sum deductions that could disrupt household finances, acknowledging that many benefits were granted in good faith but later flagged due to technical or legal deficiencies.
Fiscal Pressures and Background Context
The proposed measure emerges amid growing fiscal and legal pressures in Cebu City. Notably, the non-allocation of the 2026 Charter Day Bonus for City Hall employees has heightened concerns. Councilor Dave Tumulak, chair of the Committee on Budget and Finance, explained that funding for additional bonuses was cut after COA flagged the city's 2023 and 2024 payouts through audit observation memoranda and notices of suspension.
Mayor Nestor Archival had previously warned that releasing more bonuses under these conditions could trigger formal disallowances, forcing employees to return payments and exposing approving officials to administrative liability. The financial strain is further compounded by Cebu City reportedly posting a P91-million deficit from January to December 2025, which limits funds for new expenditures.
Arcilla noted that the City Government often grants bonuses, allowances, or financial assistance out of generosity, for humanitarian considerations, or in response to calamities and extraordinary circumstances. COA typically disallows expenditures that lack legal basis or violate accounting rules, making this ordinance a proactive step to address such issues.
The proposed ordinance has been referred to the Committee on Laws, Styling, and Ordinances for further review. It seeks to streamline the recovery process while protecting employees from undue hardship, reflecting a balanced approach to municipal governance.
