The Commission on Audit questioned why the Home Development Mutual Fund (HDMF or Pag-IBIG Fund) bought 21 cars for its officials in 2020 without the approval of the Office of the President (OP).

All in all 21 HDMF officials benefitted from the purchase worth P36.355 million.

The state auditors and HDMF, a government-owned or controlled corporations (GOCC), differed in their interpretation of rules governing such purchases.

In COA’s 2020 Annual Audit report, which red-flagged the purchases, the government auditors said transactions of these nature required prior clearance as ordered by Presidential Decree No. 1597, OP Memorandum Order No. 20 s. 2001, and OP Executive Order No. 7 s. 2010.

Specifically, Sections 5 and 6 of PD 1597 stipulated that granting of fringe benefits by GOCCs must first be approved by the President.

While Section 1 of Memo Order No. 20 suspended the grant of any kind of extra compensation or benefits for GOCC officials in the senior level positions including members of the Board of Directors or Trustees but allowed exemptions subject to prior clearance with the OP.

EO No. 7 s. 2010 imposed a moratorium in salary increases, incentives, and benefits in all government agencies unless “specifically authorized by the President.”

That was not how HDMF management saw it.

The AAR cited Pag-IBIG Fund management’s claim that since the transaction did not involve an increase in benefits, it did not require the green light of President Duterte.

HDMF also said that the purchase of all 21 cars was made under their 2015 Car Plan. They said the benefit has been carried over from 1983 when this was first approved by the Board of Trustees.

COA maintained that the purchases needed Malacañang’s approval. The state auditors stood pat that HDMF must still get the President’s approval even if only after the fact.

Pag-IBIG Fund’s policy said it would pay for the full cost of the cars, but in this particular case, the officials would pay half of the vehicle’s cost. The report though did not mention the term of payment.

The audit report said those who received the vehicles were a senior vice president, four vice presidents, two section heads, 11 department managers, and three area heads.

Except for one area head who got a car worth P800,000 only,

The values of the vehicles ranged from P1.3 to P1.8 million. However, one area head got a car worth P800,000 only. – Rappler.com