1.0 In a Circular Letter No. 94-8, dated July 22, 1994, issued by this Department, which was also circularized by the Commission on Audit (COA) through COA Circular No. 011, dated September 13, 1994, the governing Boards and Heads of GOCCs/GFIs were enjoined to strictly observed the rules and regulations issued by the Department of Budget and Management (DBM) pertaining to organization structure/staffing pattern, position classification and grant of compensation.

2.0 The CSC had reaffirmed the validity of said DBM and COA Circulars through its Resolution No. 94-6347, in the Case of the Philippine Deposit Insurance Corporation (PDIC), wherein it stated that:

"The Commission agrees with the Director, CPCB, that RA 7400 only gives the PDIC Board of Directors the power to appoint PDIC officials and employees and fix their remuneration. It does not mention the exemption of the PDIC from RA 6758, the Salary Standardization Law, which the DBM is tasked to implement. The requirement that agencies of the government must submit their Position Allocation List (PAL) to the DBM for approval is part of the latter's undertaking to monitor the implementation of RA 6758, hence, one cannot claim exemption therefrom absent any clear provision of law to that effect.

x - x - x

WHEREFORE, foregoing premises considered, the Commission hereby resolves to rule that PDIC is not exempt from the requirements of submitting their Position Allocation List to DBM for approval."

and Resolution No. 95-3507 wherein it maintains CSC position on the issues as manifested under its Resolution Nos. 94-0673, dated February 3, 1994 and 94-2422, dated April 26, 1994, which was accordingly clarified under said Resolution No. 94-2422, as follows:

"The said Resolution (Res. 94-0673) simply means that the appointments issued by these GFIs will be processed by the Commission even if the PAL approved by the DBM is not submitted. The Resolution did not diminish the power of DBM over those GFIs insofar as use of funds is concerned. It did not exempt GFIs from DBM rules and regulations, hence, DBM can still exercise its regulatory powers over these GFIs. However, the issue of whether the GFIs violated DBM rules and regulations, is not a question which the Civil Service Commission is in a position to resolve. It must be resolved by the DBM itself or by a tribunal of competent jurisdiction."

3.0 With this Circular, compliance of all concerned with the mandates of said DBM and COA Circulars is reiterated.

4.0 Any payment of compensation referred to in said DBM and COA Circulars in violation of R.A. 6758 and other pertinent compensation and budgetary laws, rules and regulations shall subject the officials and employees that authorized/caused such payment to appropriate administrative and criminal sanction, as the circumstances may warrant.

5.0 This Circular shall take effect immediately.

Adopted: 5 Sept. 1995

(SGD.) SALVADOR M. ENRIQUEZ, JR.
Secretary