COA orders PhilHealth to return P163.9M in bonuses, other perks

The Commission on Audit has ordered Philippine Health Insurance Corporation (PhilHealth) to return P163.9 million in bonuses and financial assistance the government corporation gave its officials for three years.

In separate decisions dated Jan. 29, 2018 but released to the media on Thursday, the commission denied PhilHealth’s petition for review and ruled that those perks were illegal.

COA affirmed five notices of disallowance covering P80.79 million in various forms of Christmas packages, anniversary gifts, and performance incentive bonuses the administrator of the National Health Insurance Program gave its personnel in 2009 and 2010.

It also ruled against PhilHealth on the disallowance of P83 million in educational assistance and birthday gifts given to employees at the head office and those assigned at the offices in Rizal and the National Capital Region in 2014.COA’s Corporate Government Sector (CGS) ruled in 2012 that there was no legal basis for these benefits and were not approved by the Office of the President.

In its plea, PhilHealth said the perks were granted in good faith and cited Republic Act No. 7875—or the National Health Insurance Act—which gave its board of directors fiscal autonomy that included the power to fix the compensation of its personnel.

The commissioned agreed that PhilHealth is not covered by the Salary Standardization Law, but argued that its authority under RA 7875 is not absolute. “PhilHealth is still duty-bound to observe the pertinent laws, rules and regulations pertaining to the compensation system and benefits to be granted to its employees.”

The commission emphasized the necessity of presidential approval and its supremacy over the company’s board of directors.

“As such, the BOD of PhilHealth cannot authorize the grant of the subject allowances and benefits without the approval of the President of the Philippines, through the DBM (Department of Budget and Management).”

‘Passive recipients’

COA placed the burden of returning the money on the board of directors who approved the bonuses and financial gifts, noting and citing a Supreme Court ruling that each officer and employee who benefited were passive recipients.

“Clearly, the approving officers and each employee who received the benefits are obligated, jointly and severally, to refund the amount so received,” it said.

“However, the SC has ruled that by way of exception, passive recipients or payees of disallowed salaries, emoluments, benefits, and other allowances need not refund such disallowed amounts if they received the same in good faith.”

“Without their certifications and approvals, the allowances could not have been possibly availed of by the recipients. On the other hand, the officers and employees who merely received the same benefits in the honest belief that the amounts were due them, are passive recipients or payees who need not refund amount they received,” the commission noted.

The commission also ruled against PhilHealth on the disallowance of P83 million in educational assistance and birthday gifts given to employees at the head office and those assigned at the offices in Rizal and the National Capital Region in 2014.

In 2015, the COA-CGS disallowed these benefits which forced then-chief executive officer Ramon Ariztoza Jr. to raise the corporation’s concern to the commission proper.

PhilHealth again tried to argue on the merits of its mandated autonomy over the benefits in favor of employees and also claimed anew that bonuses and other financial perks were given in good.

COA said the financial assistance and birthday gifts PhilHealth employees received were still subject to presidential approval upon recommendation of the Department of Budget and Management.

The commission emphasized the main source of funds for these perks came from the contributions of PhilHealth members and should thus be managed with utmost integrity.

“The resolutions passed by the PhilHealth, in the exercise of its fiscal autonomy, granting the benefits and allowances, no matter how long practiced, if the same were given in violation of existing rules and regulations, are still considered unauthorized and should be disallowed. It has been consistently held that no vested or acquired right can arise from acts or omissions which are against the law,” COA said. —VDS, GMA News