THE Commission on Audit has directed the Philippine Health Insurance Corp. to turn to the national coffers P147.735 million in unauthorized allowances and cash benefits paid to company officials in 2012.
In a separate decision, the CoA’s Commission Proper ordered PhilHealth to reimburse the agency of P63.57 million in illegal bonuses received by its personnel in 2011.
Audit Chairman Michael Aguinaldo and Commissioner Jose Fabia signed all three rulings that junked petitions for review filed by PhilHealth officials who sought the lifting of the notices of disallowance.
PhilHealth president and chief executive officer Alexander Padilla filed the first petition for review on the notices of disallowances on hazard pay of P58.839 million and subsistence and laundry allowances of P32.318 million.
The second petition was filed by PhilHealth-Region 8 vice president Walter Bacareza seeking recall of the notice of disallowance issued on May 13, 2013 covering “various allowances and benefits” for personnel of the regional office at P56.577 million. Based on the 2012 audit report of CoA, PhilHealth granted P1.448 billion in “benefits and allowances without legal basis” that were all disallowed by government auditors.
Of the said total, P384.663 million went to PhilHealth personnel and executives in the head office, while P1.063 billion to various regional offices.
Included in the disallowances were 13 different kinds of bonuses, incentives, allowances, cash gifts or rewards to regular personnel; other nine kinds of cash gifts and allowances, and monetary assistance to “contract employees.”
The Commission disallowed such disbursements by PhilHealth, but the management ignored its rulings and continued with the payment of unauthorized benefits.
PhilHealth claimed it had the power to fix the compensation of its personnel under Republic Act 7875, the law that created PhilHealth.
CoA, however, said the Supreme Court, in a 1999 ruling in the case of Intia vs. CoA, affirmed its stance that the discretion of the governing board of a government-owned or -controlled corporation on the matter of setting the compensation of its employees was not absolute.
The high court agreed with CoA that the compensation system must conform with the same rate implemented in other government agencies and any board resolution adjusting the rate must have the prior approval of the Department of Budget and Management.
In its decisions, the Commission Proper noted that Padilla and Bacareza’s petitions for review had both failed to comply with the recommended period for appeal.
“The petition(s) for review [were] filed out of time and this Commission had lost jurisdiction to act thereon. Thus the said decision [affirming the notices of disallowance] became final and executory,” CoA said.