Top court absolves Philhealth officials in fund anomaly

The Supreme Court (SC) cleared the officers, employees and contractors of the Philippine Health Insurance Corp’s (Philhealth) Regional Office in the Caraga Region from refunding the amounts they received which were part of more than P49mn in various benefits state auditors previously disallowed.

In a full court ruling penned by Associate Justice Noel Tijam, the high court partly granted Philhealth Caraga’s petition as it affirmed with modification the decision dated Sept. 11, 2014 and resolution dated Nov 17, 2016 of the Commission on Audit (CoA) which affirmed the decision of the CoA regional director dated Feb 21, 2011.

The court found that CoA failed to show bad faith on the part of the Philhealth Caraga approving officers in disbursing the disallowed benefits and allowances.

In 2008, Philhealth Caraga granted its officers, employees and contractors various benefits that included contractor’s gift, special events gifts, project completion incentive, nominal gift and birthday gifts, amounting to more than P49.8mn. In 2009, the Philhealth Caraga Audit Team Leader (ATL) issued notices of disallowance on the payments for lack of approval from the Office of the President (OP).

The ATL ruled that although Philhealth Caraga was exempted from the coverage of Republic Act 6758, or the “Compensation and Position Classification Act of 1989,” and Philhealth Caraga Board of Directors members acted within their powers to fix the compensation of its personnel, the additional compensation package should have been reviewed and approved by the OP through the Department of Budget and Management.

But PhilHealth Caraga officers challenged the constitutionality and applicability of the laws.

They averred that the laws the ATL cited divested the Philhealth Caraga Board of Directors of its prerogative to fix compensation as granted by its charter.

In its Aug 14, 2018 verdict but released only recently, the high court held that Philhealth Caraga manifested due diligence and good faith in granting the various benefits and allowances.

“(They) are presumed to have acted in good faith when they allowed and/or received the said benefits, in the honest belief that there was legal basis for such grant as cited above.”