The Commission on Audit (CoA) has affirmed its decision ordering the Philippine Health Insurance Corporation (PhilHealth) to refund the government P56.58 million representing various allowances and benefits of PhilHealth employees for 2012.
In a decision dated 19 September 2019, the CoA proper denied the motion for reconsideration filed by Philhealth Eastern Visayas and its concerned employees through Regional Vice President Walter Bacareza.
In their motion, the PhilHealth officials asked for the CoA decision dated 28 December 2015 to be reversed and set aside.
The CoA in its assailed ruling said PhilHealth unlawfully disbursed P56.58 million in benefits to employees in Eastern Visayas. The allocations were broken down to productivity incentive allowance, P10.97 million; educational assistance, P10.71 million; Christmas package, P9.544 million; welfare support allowance, P7.245 million; and shuttle service allowance, P5.591 million.
The PhilHealth officials also asked that the amount be declared as a lawful expense and that the recipients of the questioned benefits and the officers responsible for approving and authorizing the same should not be held liable and not refund the same.
They argued that by virtue of its charter under Section 16 Republic Act (RA) 7875, its Board of Directors (BoD) has the power to fix the compensation of its personnel even without prior approval of the Office of the President.
“This contention is misplaced,” the CoA said in its ruling.
It said Section 16 of RA 7875 does not show any grant of fiscal autonomy to PhilHealth.
“The Board of Directors may have authority to determine and fix their own compensation and classification system, but such authority is not absolute and is at all times subject to existing rules and regulations,” it said.
The CoA also said the main source of PhilHealth’s operating budget comes from the contributions of its member and like any other social insurance, the members’ contributions are treated as a trust fund, and thus, “should be managed and protected with utmost integrity.”
“Since the funds are imbued with public interest, the formulation of PhilHealth’s operating budget should strictly conform to laws and regulations governing public expenditures.”
Likewise, the CoA said the argument that the BoD’s authority to fix the compensation framework of PhilHealth was confirmed twice by President Gloria Macapagal Arroyo in her letters dated 18 September and 7 March is “untenable.”
“What were approved in those letters were only the PhilHealth Rationalization Plan or Reengineered Organization and its corresponding specific plantilla positions. Nowhere in those letters did it provide the specific approval of the subject benefits,” the commission said.
The commission also hit PhilHealth and said previous disallowances issued against the agency should have made it “more mindful” in disbursing funds.
“Anent the issue of good faith, the same cannot be granted. The officials who authorized/approved/certified the grant or payments and the recipient-employees cannot be deemed in good faith, as the laws and rules requiring prior approval from the OP and the DBM was already existent prior to their issuances of the subject allowances and benefits.”
“More importantly, several disallowances have also been previously issued against PhilHealth. This alone, should have made movants more mindful in disbursing funds for allowances and benefits,” said CoA.
The CoA decision was signed by its chairpersonn Michael Aguinaldo and commissioners Jose Fabia and Roland Pondoc.
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