COA orders PhilHealth to return P6.35 million in employee cash benefits from 2014

The Commission on Audit (COA) has ordered PhilHealth to return more than P6 million worth of funds distributed to their employees as a “cash birthday gift” in 2014 on grounds of unjust enrichment.

According to a 24 Oras report by Maki Pulido on Thursday, officials and more than 600 employees of the state health insurer received P5,000 cash as birthday gifts from April 2010 until April 2013 due to a collective negotiation agreement between the PhilHealth management and the employees union.

The agreement was reportedly extended until 2016 with the gift being raised to P10,000, leading to the COA issuing a notice of disallowance. It order the return of the funds from the 2014 distribution, amounting to P6.35 million.

An appeal filed by PhilHealth was dismissed by the COA in December 2023, a decision supported by the Supreme Court.

According to COA, the cash birthday gift was not included in the list of exempted allowances under the salary standardization law and may be considered double compensation.

They also added that the PhilHealth officials who allowed the cash birthday gifts did not act “in good faith” as there were already protocols set in place, and that they cannot justify and must be held accountable for illegal actions.

Meanwhile, PhilHealth said that the benefit was only implemented as the law stated they had “fiscal autonomy” and that they immediately stopped when ordered by COA.

“’Yan naman ay nakabase doon sa, una, doon sa Section 16N ng acting batas, yung RA 7875, na nagsasabi na the corporation has the fiscal autonomy,” said PhilHealth spokesperson Israel Francis Pargas.

(That is based on Section 16N from RA 7875, which states that the corporation has fiscal autonomy.)

PhilHealth clarified that they were ready to return funds as soon as the decision was final, and that they were studying how to refund the cash benefits from officials and employees no longer affiliated with PhilHealth.

“The refund will be coming from the employees, not from the fund of PhilHealth,” said Pargas. — Jiselle Anne C. Casucian/BM, GMA Integrated News