THE Commission on Audit has ordered a halt to the National Housing Authority’s (NHA) payment of employer’s share in the provident fund of officials and employees which amounted to P19.05 million in May to December 2022 and P28.74 million in 2023.
For failing to secure prior approval from the Office of the President, the fund releases were considered a violation of the GOCC Governance Act of 2011 or RA No. 10149
The COA noted that from 2005 to 2011, the same fund disbursements were disallowed in audit for the same basis: the absence of OP approval.
“In CY 2012, NHA stopped the granting of PF employer’s share to its officers and employees in compliance with COA audit observations in the AARs. As a result, NHA did not remit PF employer’s share of its officers and employees to PFAI from CY 2012 to April 2022,” the audit team noted.
But in October 2021, the Governance Commission for GOCCs (GCG) approved the Compensation and Position Classification System (CPCS), prompting the NHA Financial Management Department to declare that the employer’s share of the Provident Fund took effect in May 2022.
However, auditors pointed out that the NHA has no existing PF appropriation, hence the NHA Memorandum Circular No. 2022-064 on the grant of PF employer’s share to officers and employees was contrary to the provisions of the CPCS for government-owned or controlled corporations.
“We recommended that Management stop the grant of PF employer’s share to officers and employees until approval from the Office of the President is sought,” auditors said.
The NHA management informed the COA resident auditors that it had submitted a request to the Office of the President to approve the grant of PF employer’s share at the rate of three percent of the employee’s basic salary.
At the same time, it insisted that there was no need for an appropriation for the payment of PFs employer’s share since the NHA has financial capacity within its existing fund.
“While acknowledging the need for prudent fund management and compliance with recommendations to secure presidential approval, the Management requested continued allowance of the grant, citing legal basis, employee entitlement, and the conservative three percent rate,” the NHA told the COA.
The audit team, however, stood firm on its findings.
“We stand by our recommendation that the grant of the PF employer’s share to officers and employees be discontinued until approval from the Office of the President is obtained,” auditors said.
