THE Commission on Audit has recommended that the Employees’ Compensation Commission (ECC) terminate its agreement with the Employers’ Confederation of the Philippines (ECOP) allowing the later to use office spaces in the ECC building without paying any rent for the past 24 years.
Government auditors noted that the basis of the ECC-ECOP arrangement was a 1996 directive from former President Fidel V. Ramos that led to the approval of ECC Board Resolution No. 96-06-0291 dated May 9, 1996.
That resolution granted ECOP free use of half of the entire third floor of the ECC building on Gil Puyat Ave. in Makati City.
Responding to the audit observation, the ECC said it has received instructions from the governing board to discuss the issue with the ECOP to look into “other options.”
Auditors acknowledged that the arrangement was anchored on the fact that ECOP is a major contributor to the Employees’ Compensation Program, which provides cash assistance to private sector workers in case of work-related injuries, sickness or death.
The ECP funding is sourced from the State Insurance Fund. This in turn is supported solely by contributions from employers.
“ECOP is one of the biggest employer organizations in the country and a program partner of the ECC in the implementation of the ECP,” the COA noted.
However, the audit team noted that there are other agencies of the government occupying office floor space in the same building that are being charged rent.
“It is worth mentioning that government agencies, such as the Social Security System (SSS) and the DOLE-NCR (Department of Labor and Employment-National Capital Region) among others, are tenants of the ECC who are dutifully monthly rental fees,” it pointed out.
The COA urged the ECC management to “revisit existing policies and strategies” regarding the agreement with ECOP “in pursuance of sound management and fiscal administration” noting that the agency has been losing opportunities to earn potential income from leasing out the space.
“We recommend that management…accordingly terminate the agreement of ECC with ECOP that granted free occupancy of ECC’s office space …and offer the space to tenants through public bidding,” it added.