MANILA -- The Commission on Audit has ordered a refund of some P260.5 million in incentives given by the Government Service Insurance System management to its employees, as these were "illegal expenditures."
The P100,000 given to a each of 2,615 employees for service excellence under the GSIS Galing ng Pagkilala incentive were released without authority from President Rodrigo Duterte and the budget department, COA said in its 2018 annual audit of the state-run corporation.
The money required prior approval from Duterte as it was not among the allowable incentives under the Compensation and Position Classification Act of 1989, auditors noted.
“Foregoing considered, the grant of Pagkilala incentive, without the prior recommendation and approval of the DBM and Office of the President, respectively, resulted in illegal expenditure which is not allowed in audit,” the COA said.
The computation of the incentives was “erroneous” because it should have been based on savings generated from “superior accomplishment of being an outstanding institution” which the GSIS management supposedly failed to quantify, added COA.
The audit team said there must be a refund if GSIS failed to secure approval from the DBM and the President.
The GSIS management disagreed with the refund, saying it invoked good faith considering the program was submitted to and approved by the Civil Service Commission.
“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,” the COA report read.
GSIS President and General Manager Jesus Clint Aranas received a copy of the report last June 24.
The full audit report can be downloaded from the COA website.