THE Commission on Audit (COA) has denied a motion for reconsideration filed by the Government Service Insurance System (GSIS) on its 2022 decision that upheld the disallowance on the payment of consultancy fees totaling P4.81 million to private lawyers.
In its 11-page resolution, the COA Commission Proper maintained its stand that the consultancy payment for the private lawyers did not comply with the requirements set under COA Circulars Nos. 2021-003 and 86-255, which required prior approval of the Office of the Government Corporate Counsel (OGCC) and that such fees should not exceed the maximum monthly limit of P50,000.
According to the disclosure in the COA ruling, one lawyer received P60,000 per month; three were paid P50,000 monthly fees; one was retained at P40,000 each month, and the last collected P15,000 per month.
“In this case, movants engaged the legal services of private lawyers without complying with the requirements set forth under the abovementioned circular. The disbursements or payments made by the movants for the professional fees are therefore irregular expenditures, thus, properly disallowed,” the commission said.
Auditors said the six private lawyers were assigned to the offices of the Board of Trustees (BOT) and the office of the President and General Manager as legal consultants for advice on legal matters.
They added that the appointments and hiring did not have the written conformity of the OGCC or the concurrence of COA.
Held liable were GSIS president Robert Vergara, BOT chairman Daniel Lacson Jr., BOT members Geraldine Marie Martinez, Mario Ramirez, and Mario Aguja; Officers IV Elmer Lagasca, Josefina Maitim, Dickson Beberabe, Margie Jorillo, and Rosalyn Ramos Mendez; and chief of staff Gloria Georgina Jota.
The COA pointed out that since GSIS is a government-owned or controlled corporation, it required the approval of the OGCC before it could engage private legal consultants. It noted that the same rule was cited by the Supreme Court in its 2009 ruling in the case of Power Sector Assets and Liabilities Management Corp (PSALM) vs. COA.
“The contentions of the movants that the said circulars do not apply to GSIS and that the prohibition does not cover the hiring of private lawyers who only provide individual consultancy services to the individual members of BOT, are without merit,” the Commission declared.
However, the COA agreed with the GSIS that a refund of the fees paid to the private lawyers is no longer required since they represent compensation for services rendered as sustained by the SC in the 2020 case of Madera vs. COA.
It explained that to compel the approving GSIS officials to pay back the fees they received despite having rendered work would be inequitable since it would amount to unjust enrichment of the government at their expense.
“Therefore, notwithstanding affirmance of the disallowance, this Commission finds the propriety of allowing the payees to retain all the payments made to them for their services. The approving and certifying officers cannot be made accountable for the refund of the disallowed amount,” the COA added.
