GSIS flagged over P260-M incentives to officials, employees
The Commission on Audit (COA) has directed the Government Service Insurance System (GSIS) to refund a total of P260.530 million in incentives it granted to the agency’s officials and employees last year despite the lack of required approval from the Office of the President (OP).
Based on COA’s annual audit report on the GSIS, 97.25 percent or 2,615 out of the 2,689 employees of the state pension fund were granted the “Galing ng Pagkilala” incentive amounting to P100,000 each or a total of P260.530 million under its Program on Awards and Incentives for Service Excellence or PRAISE.
The COA said that while the Civil Service Commission (CSC), under its Memorandum Circular No. 1 Series of 2001, states that the GSIS, through PRAISE, may provide monetary and non-monetary awards and incentives to outstanding employees in order to recognize their “productive, creative, innovative and ethical behavior,” such grant is still subject to the recommendation of the Department of Budget and Management (DBM) and the approval of the OP.
The audit body pointed out that under Section 5 of Presidential Decree 1597 or the Rationalization of the Compensation and Position in the National Government, all “allowances, honoraria and other fringe benefits which may be granted to government employees shall be subject to the approval of the President upon recommendation of the Commissioner of the Budget.”
The COA told the GSIS to refund the incentive given or to secure the recommendation of the DBM and the approval of the OP, otherwise a notice of disallowance shall be issued to compel the concerned GSIS officials to return the amount.
In a management reply incorporated in the audit report, the GSIS said the grant of incentive was done in “good faith” considering that its PRAISE was submitted to and approved by the CSC.
COA said “the (GSIS) management firmly disagreed to refund the incentives already given in CY 2018 and prior years.”
“However, management committed to review the provisions pertaining to Pagkilala Incentive and strictly comply with our observation on the proper computation of savings to be considered as basis of the grant thereof,” COA said.
COA said Section 6 of the same decree states that all government-owned and controlled corporations, government financial institutions and subsidiaries which are exempted from the official compensation and position classification rules shall report to the OP all their position classifications, compensation plans, policies and rates for its review and approval.
The COA also cited RA 6758 or the Salary Standardization Law (SSL) of 1989, which similarly states that all other allowances and additional compensations not included in the SSL shall be subject to approval of the OP upon the recommendation of DBM.
“Forgoing considered, the grant of Pagkilala Incentive, without the prior recommendation and approval of the DBM and OP, respectively, resulted in illegal expenditure which is not allowed in audit,” the COA report read.
The audit body also noted that the incentive granted by the GSIS to its employees was sourced from the state firm’s Corporate Operating Budget instead of the corresponding savings generated from its supposed superior accomplishments.