WHEREAS, water districts have been granting allowances and benefits in the form of Representation Allowance and Transportation Allowance (RATA), Emergency and Miscellaneous Expenses (EME), Christmas cash gift/bonus, rice allowances, extraordinary allowances and other similar allowances to members of the Board of Directors and their organic personnel;

WHEREAS, these benefits and allowances were granted pursuant to Resolution No. 313 series of 1995 and Resolution No. 39 series of 1996 of the Local Water Utilities Administration (LWUA) Board of Trustees;

WHEREAS, this Commission has consistently disallowed these benefits on the ground that water district directors are prohibited from receiving compensation other than the per diems mandated under Section 13 of P.D.198 while organic personnel who were not receiving these benefits as of July 1, 1989 were held to be not entitled thereto under Section 12 of R.A. 6758 and Corporate Compensation Circular No. 10;

WHEREAS, the Supreme Court in G.R. No. 147248-49 entitled Baybay Water District vs. COA dated January 23, 2002 had affirmed the disallowances holding that the law quite clearly indicates that directors of water districts are authorized to receive only the per diem authorized by the law and no other compensation or allowance in whatever form;

WHEREAS, in a subsequent case entitled Rodolfo de Jesus et al. vs. COA, G.R. No. 149154 dated June 10, 2003, the Supreme Court nevertheless declared that since these Directors and organic personnel have received the additional allowances and bonuses in good faith under the honest belief that LWUA Board Resolution 313 authorized such payment and that at the time they received the same, the court had not yet decided the Baybay Water District case, they need not refund the allowances and bonuses they received earlier disallowed by this Commission;

WHEREAS, numerous cases involving the same cause of action as those previously decided by this Commission and the Supreme Court and in some cases involve the same parties themselves are pending before this Commission;

WHEREAS, to put an end to separate and piecemeal resolution on requests for the lifting of similar disallowances on matters previously decided with finality, it has become imperative for the Commission to adhere to the doctrinal maxim on res judicata, for the guidance of all concerned water districts and their respective auditors.

NOW THEREFORE, in consideration of the foregoing premises, this Commission hereby resolves to prescribe the following guidelines on the matter of allowances and benefits granted by the water district to the members of the Board of Directors and their organic personnel, viz:

1. The disallowances of allowances/benefits received by all members of the Board of Directors of water districts pursuant to LWUA Resolution No. 313 s. 1995 and No. 39 s. 1996 prior to the promulgation of the Baybay Water District case on January 23, 2002 are hereby affirmed but the recipients thereof are not obliged to refund the same pursuant to the ruling of the Supreme Court in de Jesus vs. COA, G.R. No. 149154;

2. Allowances and benefits of organic personnel of water districts who were incumbents as of July 1, 1989 and were receiving such allowances and benefits shall be allowed in audit. Conversely, those hired after that date including those hired to the positions vacated by the said incumbents shall not be entitled to the said allowances and benefits;

3. Allowances and benefits granted after January 23, 2002 other than those allowed under the Salary Standardization Law as implemented by DBM Corporate Compensation Circular No. 10 shall be disallowed in audit; and

4. Water districts shall comply strictly with the parameters laid down by the Department of Budget and Management for the continued receipt of allowances and benefits enjoyed as of July 1, 1989 embodied in two (2) separate letters of the Secretary of the Department of Budget and Management addressed to the General Manager, Davao City Water District and the President, Philippine Association of Water Districts (PAWD) dated November 9, 2002 and April 27, 2001, respectively, which letters shall be denominated as Annexes "A" and "B" and form integral part of this Resolution.

This Resolution takes effect immediately and covers all pending appeals and motions which are hereby deemed resolved, closed and terminated.

Quezon City, Philippines.