SC affirms COA disallowance of P204-M PhilHealth benefits

The Supreme Court has affirmed the findings of the Commission on Audit (COA) against P204.07 million in birthday gifts and other benefits granted to Philippine Heath Insurance (PhilHealth) personnel from 2007 to 2008.

In a 17-page unanimous decision penned by Associate Justice Henri Jean Paul Inting, the Court affirmed COA’s notices of disallowance (ND) on the following gifts and benefits approved by the PhilHealth board during the covered period:

• Efficiency gift – P16.2 million
• Birthday gift – P5.97 million
• Special event – P8.7 million
• Nominal gift – P29.5 million
• Education assistance – P49.28 million
• Project completion benefit – P4.98 million
• Payment of liability insurance premium for PhilHealth board of directors and officers – P638,000
• Corporate transition and achievement premium – P81.05 million
• Medical mission critical allowance – P7.91 million

The resident auditor issued the notice of disallowance against the payment of insurance premium for PhilHealth executives as this violated Section 73 of Republic No. Act 9184 or the Government Procurement Reform Act, and Government Procurement Policy Board Resolution No. 21-05.

The other notices of disallowance were issued as the benefits were released without prior approval of the Office of the President (OP) – in violation of Memorandum Order No. 20 of June 2001, and Administrative Order No. 103 of August 31, 2004.

Return ‘efficiency gift’

The High Court directed PhilHealth “the payees or recipients of the efficiency gift must return the amount they received since it was erroneously given to and received by them.”

If they fail to return the P16.2 million, “unjust enrichment on the part of the payee will arise,” the Court said.

In 2012, the COA-Corporate Government Sector junked PhilHealth’s appeals in relation to the notices of disallowance. In 2016, COA dismissed PhilHealth’s petition for review for lack of merit and for late filing.

COA also said that the actions of PhilHealth officials who authorized, approved, or certified the benefits could not be deemed done in good faith as these had no prior OP approval, as required under the law.

PhilHealth has tried to counter the notices of disallowances by saying that it has autonomy to grant benefits without getting approval from the OP.

The Court said, however, that the grant of benefits must be in accordance with the law or specifically authorized by a Department of Budget Management issuance.

“Considering that the ruling of the Court on the need for approval from the OP has long been existing, the Court cannot allow PHIC to feign ignorance to the pronouncement,” the High Court said.

“Given the foregoing, the Court is unconvinced that the officers of PHIC who approved the benefits in question acted in good faith when they approved and granted these benefits,” it added.

The state insurer came under intense congressional scrutiny last year, when a whistleblower exposed the alleged misappropriation of P2 billion in Interim Reimbursement Mechanism (IRM) funds of PhilHealth. – Rappler.com