Per Diem vs Honoraria: Defining Compensation Limits for Government Board Members

The Supreme Court recently settled a recurring question in government compensation: when may members of a collegial body receive honoraria on top of their per diem? In Abejo v. Commission on Audit (G.R. No. 251967, June 14, 2022), the Court affirmed that compensation for board members is strictly limited by law, but also clarified when approving officers may be absolved from liability.

The case involved the Inter-Country Adoption Board (ICAB), created under Republic Act No. 8043. The ICAB is composed of the DSWD Secretary as ex-officio Chairman and six members appointed by the President. Under the law, each member receives a per diem of P1,500 per meeting, with compensation for no more than four meetings a month.

The Disallowed Additional Remuneration

From 2008 to 2010, the ICAB faced a heavy volume of adoption applications. To cope with the workload, the board members were asked to help review the dossiers of prospective adoptive parents—a task normally performed by the Inter-Country Adoption Placement Committee.

To compensate this extra work, the ICAB issued memoranda granting members an additional P250 per application reviewed, later increased to P500. The Commission on Audit (COA) disallowed the total amount of P162,855.00, ruling that the grant had no legal basis.

The Legal Limits on Compensation

The Supreme Court agreed with the COA. While additional work outside a government official's regular functions may be compensated, the grant must comply with applicable laws and rules.

Two provisions barred the payment:

• Section 5 of RA 8043 sets the limit: ICAB members receive only the per diem of P1,500 per meeting, for no more than four meetings a month.
• Item 4.3 of DBM Budget Circular No. 2003-5 prohibits the payment of honoraria to officers who already receive per diem.

The Court also rejected the argument that the work constituted a "special project" under the General Appropriations Act. Citing Ngalob v. Commission on Audit, the Court explained that a special project requires an approved project plan with specific deliverables, timetables, and cost estimates—none of which existed here.

When Approving Officers Are Not Liable

Despite affirming the disallowance, the Court absolved petitioner Bernadette Lourdes Abejo from returning the amount. Applying the Madera rules, the Court found that Abejo acted in good faith.

The Court cited several "badges of good faith": no prior disallowance had been issued against ICAB for the same benefit, and no jurisprudence had previously disallowed a similar case. The presumption of regularity in the performance of official functions therefore stood in her favor.

The Court also noted that the ICAB members who received the payments were not held liable in the notice of disallowance, and this exoneration had attained finality.

Practical Takeaways

• Per diem is a ceiling, not a floor. Government board members cannot receive honoraria on top of their per diem unless a specific law or rule expressly allows it.
• Check DBM issuances first. Before granting any compensation, verify compliance with applicable DBM Budget Circulars. The word "shall" in these issuances is mandatory.
• Special projects require paperwork. To claim honoraria for special projects, there must be an approved project plan with defined deliverables, timetables, and costs—bare allegations of extra work will not suffice.
• Good faith protects approving officers. Officers who approve disallowed benefits may avoid liability if they acted in good faith, with no prior disallowance or precedent against the practice.
• Manuals cannot override law. An agency manual or internal issuance cannot defeat an express provision of law or a DBM rule.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.