COA: PhilHealth abused authority in P87M bonuses

Posted at 01/16/2014 11:31 PM

MANILA -- The Commission on Audit on Thursday said the governing board of the Philippine Health Insurance Corporation (PhilHealth) abused its authority for claiming P87.79 million in funds that were intended for the benefit of contributing members.

The COA, in a ruling, disallowed the bonuses, allowances, and reimbursements that officials and employees of PhilHealth paid themselves in 2003 and 2004.

The 10-page decision signed by COA chairperson Ma. Gracia M. Pulido-Tan and Commissioners Heidi L. Mendoza and Rowena V. Guanzon denied the appeal of PhilHealth and affirmed earlier findings by the agency’s supervising auditor.

“The funds kept by the Petitioner (PhilHealth) are fiduciary in nature; it is a trust fund intended for the welfare and benefit of the members who pay contributions in exchange for the entitlement to health care benefits,” the Commission Proper declared.

“As a trustee, (PhilHealth) is legally bound to manage the fund in a responsible and productive manner, and is under an absolute obligation to act for the benefit of the beneficiaries. Charging the trust fund with illegal and unreasonable fees is a betrayal of that trust and confidence reposed by the members to the petitioner,” the COA added.

The disallowed bonuses and allowances were paid during the administration of PhilHealth president and chief executive officer Francisco T. Duque III, who is now the present chairman of the Civil Service Commission.

The COA ruling specifically rejected the Cost of Living Allowances (COLA) for 1988 to 1995 amounting to P1.281 million; Labor Management Relations Gratuity (LMRG) worth P27.398 million; Welfare Support Assistance (WESA) totaling P54.9 million; Collective Negotiation Agreement (CAN) signing bonus of P4.12 million; and reimbursements of seminar/conference fees in the sum of P64,490 and excessive fuel consumption for service vehicles amounting to P18,383.55.

While acknowledging that Philhealth is authorized to fix the compensation of its personnel under the principle of fiscal autonomy, COA said such power is “not all-encompassing” and must not be construed as an “unbridled discretion to determine compensation of its officers and employees.”

“Petitioner’s payment of COLA back pay to its personnel covering the period July 1, 1988 to January 1995 prior to the creation of PhilHealth in February 1995 is an act constituting grave abuse of authority,” COA said.