The Commission on Audit has flagged the Government Service Insurance System, directing it to return P260.5 million in incentives it earlier granted to its employees.
State auditors said the incentives were considered “illegal expenditures.”
In a 2018 audit report, 2,615 employees got P100,000 each for service excellence under the GSIS Galing ng Pagkilala incentive without approval from President Rodrigo Duterte as well as from the Budget department.
COA said the incentive grant needed a presidential approval since such was not an allowable incentive under the Compensation and Position Classification Act of 1989.
“Foregoing considered, the grant of Pagkilala incentive, without the prior recommendation and approval of the Department of Budget and Management, and Office of the President, respectively, resulted in illegal expenditure which is not allowed in audit,” its findings read.
“The grant of the aforesaid incentive, which is of significant amount… constitutes a new incentive to the System’s employees which requires approval by the President, upon recommendation of the DBM,” the commission said.
The computation of the incentives was “erroneous” since it should have been based on savings generated from “superior accomplishment of being an outstanding institution,” it added.
The GSIS management was not able to quantify such, it noted.
“The P100,000 for each qualified employee totaling to P260.53 million is substantial/significant that run beyond the recognition and reward for collective group efforts of officials and employees which is not consistent with the intention of the CSC,” the COA said.
It ordered GSIS to return the money.
The GSIS, however, did not agree with the recommendation of COA, saying the grant of the incentives was done in 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 report stated.
On June 24, COA sent a copy of the report to GSIS president and general manager Jesus Clint Aranas.
