THE Commission on Audit (COA) is urging the Social Security System (SSS) to take legal actions against a collecting agent (CA) for delays of up to 189 days in remitting collections totaling P156.37 million.
State auditors said P151.54 million or 96.91 percent of the unremitted sum “pertains to contributions of Overseas Filipino Workers (OFWs),” while the remaining 3.09 percent pertain to loan repayments by members.
The audit report released on the COA website on December 1, 2024, did not identify the collecting agent.
The audit team questioned the failure of the SSS to impose suspension against the collections company even if according to the Remittance Transfer Agreement, the collector/agent was supposed to turnover the consolidated collections to the SSS in Philippine currency not later than two banking days by depositing the amount to the SSS designated bank account.
Ironically, the SSS signed up the collection company for e-collection system for the purpose of expediting the processing of member and employer payment, ensuring efficient remittance, and facilitating posting and accounting.
Auditors said the collecting agent was required by the rules to transmit the daily Remittance Report and Collection File within two banking days through the SSS Secure File Transfer Protocol (SFTP) facility. It was also supposed to submit a monthly Summary of Collections and Deposits Report (SCDR).
“Examination of the RRs and SCDRs of the CA covering its remittances from June to December 2023 disclosed delayed remittances ranging from 1 to 189 days, totaling P156.366 million. Further verification showed that P151.541 million or 96.91 per cent of the total delayed remittances as of December 31, 2023, pertains to contributions of Overseas Filipino Workers,” the audit team said.
Based on records obtained by auditors, the collection agent only remitted P78.227 million as of December 31, 2023, while the balance of P73.314 million was received by SSS only on the first quarter of 2024.
Overall, the COA said the loan accounts of 4,824,669 members were affected.
Records showed the SSS Cash Management Department (CMD) notified the collecting agent in June 2023 about its failure to submit the Remittance Reports.
The company cited “system upgrades and integration testing” as the reasons for the delay. However, after a series of meetings with SSS officials, it admitted responsibility for the penalties resulting from delays at their end.
On January 11, 2024, the Treasury Division (TD) advised the collecting agent to immediately deposit the US Dollar equivalent of the undeposited collections as of December 31, 2023.
In its reply dated January 17, 2024, the CA gave a commitment to settle the outstanding 2023 collections on staggered dates. However, the Investments Sector rejected this request to pay in tranches warning that failure to settle would result in the suspension of collection activities.
The agent was officially suspended from collecting payments on behalf of SSS on January 24, 2024.
On February 29, 2024, the SSS president and chief operating officer issued a memorandum for the termination of the SSS agreement with the collecting agent.
However, the COA said the SSS took too long to act despite the violations by the collecting agent.
“It is necessary to emphasize that SSS suspended the CA on January 24, 2024, which is 232 days after the first instance of delay in the remittance of collections in June 2023. Additionally, TD did not send the initial demand letter until January 11, 2024,” the commission pointed out.
Likewise, it questioned the SSS why the three percent penalty for the delayed remittance was based only on P14.8 million instead of the entire amount of P156.366 million. Because of the minuscule amount on which the penalty was based, only P1.45 million was imposed instead of P16.93 million based on the audit team’s computations.
“We recommended that Management, through CLSD (Corporate Legal Services Division), enforce appropriate legal actions on recovery of any unremitted collections and associated penalties from the concerned CA,” the audit team said.
The SSS management said its CLSD has sent the final demand letter to the collecting agent dated February 15, 2024 to settle their total obligation amounting to $8.175 million, exclusive of the three percent penalty.
