COA: Red flags in AFP pension payments in 2014, 2015

Rappler.com
COA: Red flags in AFP pension payments in 2014, 2015
State auditors say overpayments amounting to over P126 million were made to 'unreported' dead pensioners from the second half of 2014 to 2015, apparently due to the AFP's poor monitoring system

MANILA, Philippines – State auditors have raised red flags in the pension system of the Armed Forces of the Philippines, involving P1.345 billion in the second semester of 2014 and in 2015.

In its audit report on the AFP General Headquarters released on July 13, the Commission on Audit noted the “high incidence” of pension overpayment to dead pensioners amounting to P126.82 million.

COA also noted continued deposits to “tagged or doubtful pensioners’ accounts” totaling P1.078 billion, and the “high occurrence” of stale checks amounting to P147.51 billion.

COA noted, however, that the scope the investigation was limited by the restricted access to the Pension Management Information System (PenMIS) and the Finance Management Information System (FMIS). 

The PenMIS and the FMIS are maintained by the AFP Pension Gratuity and Management Center (PGMC) and the AFP Finance Center (AFPFC).

The audit team randomly selected 18 pensioners – 13 of whom are a hundred years old and above, based on their records – by sending them confirmation letters and checking their status with the Philippine Statistics Authority. This is to test the validity of the payment of benefits.

The COA report said that the results of the validity test showed that “the 18 pensioners who were confirmed deceased continue to receive their monthly pension with aggregate amount of P19,770,967.59.”

“On top of the 18 deceased pensioners, additional 722 were likewise paid pension benefits CY 2015 and from June to December 2014 amounting to P79,665,689. Hence, overpayments to unreported deceased pensioners mounted to at least P126,834,570,” it said.

Of this amount, only P44.2 million had been returned to the AFP pension fund as of January 31, 2016, while the remaining P82,628,918.05 is unlikely to be recovered, state auditors said.

“The amount is considered leakage costs due to its remote chance of being recovered,” COA said.

Failure to monitor pensioners

The COA questioned the failure of the PGMC and the AFPFC to monitor ageing pensioners.

“Management is not properly informed of how much pension benefits were paid to unqualified pensioners/beneficiaries in prior years and how much is unrecovered and unrecorded. [It has] inadequate if not nil knowledge on the degree of pervasiveness of the condition observed as this has been happening in previous years,” it said.

COA also cited its finding that 14,378 “tagged or doubtful” pensioners’ accounts continued to get benefits through their automated teller machine (ATM) accounts for a total payment of P1.078 billion during the audit period.

The PGMC tags or withholds the pension account when the pensioner fails to comply with the rules, such as updating his or her status, responding to confirmation letters, among others.

COA noted, however, that the investigation of a tagged pensioner, is not bound by a “set timeline.” 

State auditors discovered that the suspension of benefits stretched from 3 to 17 months.

They said that “P1,078,118,605.36 currently floats in the ATM accounts of the tagged pensioners” at the time they made the report but there is no monitoring mechanism in place to check whether the amounts deposited remain intact.

COA also raised concern over the its discovery of 19,480 stale checks for  3,482 pensioners totaling P147.508 million. 

“The stale checks could have been a major source of concern for PGMC officials to pinpoint, assess and address the root cause of the problem since the stale checks tend to signify doubt on the liability to the pensioners,” it said.

COA said that during the exit conference, the AFP said it is upgrading its automation system so it can better monitor its pensioners. The AFP also said 585 pensioners have updated their records and begun claiming their benefits again. – Rappler.com

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