THE Commission on Audit (COA) has issued two separate decisions affirming the Notice of Disallowance (ND) and ordering a refund of P6.98 billion illegal pay increases received by officials and employees of the Government Service Insurance System (GSIS) over a 12-year period from March 1998 to December 2010.
Held liable for approving the resolutions of the Board of Trustees to pad up the pay envelopes of all personnel were GSIS executives Bernardino Abes, Winston Garcia, Jesse H. T. Andres, Esperanza Ocampo, Reynaldo Palmiery, Raymundo Lapating, Alejandro Roces, Jesus Santos, Mario Ramirez, Hermogenes Concepcion, Federico Pascual, Leovegildo Arellano, Elmer Bautista, Leonora de Jesus, Fulgencio Factoran, Florino Ibañes, and Aida Nocete.
Likewise included were Isabellita Irlandez, Lea Mendiola, and Marilyn Concepcion for approving the payment of the pay increases out of the appropriations of GSIS.
The COA held that even rank and file employees who had no role in approving or processing the higher pay but only benefited from it are required to return the sum that they received in excess of their valid salaries.
In their petitions for review, the officials of the GSIS claimed its charter exempts the agency from the coverage of the Salary Standardization Law and even the requirement for presidential approval when its Board of Trustees want to adjust personnel compensation.
They likewise argued that since the officials and employees of GSIS are already enjoying the higher pay, it would violate the principle of non-diminution of benefits if the disallowance was upheld and the refund is enforced.
In both decisions released only this week, COA Commissioners Roland Café Pondoc and Mario G. Lipana held that the GSIS Board of Trustees is not exempt from the requirement of presidential imprimatur for any adjustment in compensation rates. COA chairperson Gamaliel Cordoba inhibited on both instances.
The COA said the GSIS Charter (RA 8291), which is an action of the legislature, cannot divest the President of his power or control over all executive departments, bureaus, and offices.
“The constitutional vesture of this power of control in the President is self-executing and does not require statutory implementation, nor may its exercise be limited, much less withdrawn, by the legislature,” the COA ruled.
It reminded the GSIS executives that the requirement for prior presidential approval was a safeguard against any abuse or misuse of funds by agencies and government entities excluded from the coverage of the Salary Standardization Law.
“The fact that the requirement of prior presidential approval in fixing the compensation and benefits of GSIS officials and employees was not reproduced in the new GSIS Charter does not mean that GSIS is now outside the control of the President, much less that such approval is no longer necessary,” it pointed out.
The COA also rejected the argument that those who received the higher pay in good faith should be allowed to keep the money, as it noted that the GSIS officials intentionally ignored several admonitions about the lack of legal basis for the salary increase.
“It is highly improbable that the BOT and other officers of the GSIS had no knowledge that the law requires prior approval from the President before salary increases may be given to their officers and employees. Verily, their utter disregard of the law is an act of bad faith,” the COA said.
