Ramon R. Yap is the holder of a regular position of Department Manager of the National Development Company (NDC), a government-owned and controlled corporation with the original charter. He was appointed by the Board of Directors Manila Gas Corporation (MGC), a subsidiary of NDC, Vice-President for Finance, while remaining as a regular employee of NDC. The additional employment entitled him to honoraria equivalent to 50% of his basic salary at NDC and various allowances attached to the office. In the course of the regular audit, the Corporate Auditor, MGC issued the following notices of disallowances against Mr. Ramon R. Yap: Notice of Disallowance Date Amount Nature ND 99- 03(98) MGC 03/26 P3,330.00 Subscription to National Geographic and Reader's Digest ND 99-10(98) MGC 04/12 2,848.00 Car maintenance allowance 1,500.00 Annual fee of VISA card ND 99-12(98) MGC 04/12 789.00 Representation expense on a Sunday ND 99-16(98) MGC 09/09 4,180.56 Fellowship with other PCA club Members on Sunday ND 99-07(98) IIGSI 08/28 11,500.00 Car maintenance allowance ND 99-14(98) IIGSI 08/31 7,000.00 Executive check-up ND 99-09(99) MGC 05/26 119,508.90 Monthly allowance Mr. Yap appealed the Auditor's disallowances, primarily contending that the questioned benefits were all approved by the MGC Board of Directors. Questions: 1. Discuss the possible reason why the Commission on Audit disallowed the above transactions. Justify your answer 2. , discuss the fundamental principle “Government funds or property shall be spent or used solely for public purposes.”
. Ramon R. Yap is the holder of a regular position of Department Manager of the National Development
Company (NDC), a government-owned and controlled corporation with the original charter. He was
appointed by the Board of Directors Manila Gas Corporation (MGC), a subsidiary of NDC, Vice-President
for Finance, while remaining as a regular employee of NDC. The additional employment entitled him to
honoraria equivalent to 50% of his basic salary at NDC and various allowances attached to the office.
In the course of the regular audit, the Corporate Auditor, MGC issued the following notices of disallowances
against Mr. Ramon R. Yap:
Notice of
Disallowance
Date Amount Nature
ND 99- 03(98) MGC 03/26 P3,330.00 Subscription to National Geographic and Reader's
Digest
ND 99-10(98) MGC 04/12 2,848.00 Car maintenance allowance
1,500.00 Annual fee of VISA card
ND 99-12(98) MGC 04/12 789.00 Representation expense on a Sunday
ND 99-16(98) MGC 09/09 4,180.56 Fellowship with other PCA club Members on Sunday
ND 99-07(98) IIGSI 08/28 11,500.00 Car maintenance allowance
ND 99-14(98) IIGSI 08/31 7,000.00 Executive check-up
ND 99-09(99) MGC 05/26 119,508.90 Monthly allowance
Mr. Yap appealed the Auditor's disallowances, primarily contending that the questioned benefits were all
approved by the MGC Board of Directors.
Questions:
1. Discuss the possible reason why the Commission on Audit disallowed the above transactions. Justify
your answer
2. , discuss the fundamental principle “Government funds or property
shall be spent or used solely for public purposes.”
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