COA upholds decision directing SSS to return P6.1 M in incentives

MANILA, Philippines - Affirming its initial decision issued in 2010, the Commission on Audit (COA) has directed Social Security System officials and personnel to refund more than P6.1 million in unauthorized incentives granted to them in 2005.

“High-level employees who are not considered party-in-interest to the Collective Negotiation Agreement (CNA) are not entitled thereto,” the latest ruling dated May 8, 2014 read.

COA Chairman Ma. Gracia Pulido-Tan and Commissioner Heidi Mendoza denied the petition filed by the SSS seeking a reversal of the audit agency’s earlier findings.

The amount that is being ordered refunded forms part of disbursements that was subject of a notice of disallowance on the pensions fund’s payment of counterpart CNA.

Such perks were granted based on SSS Resolution No. 259 passed on July 6, 2005 granting P20,000 CNA incentives to all regular rank-and-file employees, including those who were already working for at least three months at the time of the approval.

And for those who were not covered by the employment period cut-off, SSS paid counterpart CNA benefits to them, including “confidential, co-terminus and contractual employees, lawyers and executives.”

Defending itself, the SSS argued that the payment of counterpart CNA incentives was not covered by EO 180 and Admin Order 103 or the laws or rules limiting payment of CNA incentives only to rank-and-file personnel since it was not exactly CNA.

The COA, however, rejected such explanation, saying the change of name was simply used as a ruse to get around the restrictions.

“Notwithstanding the nomenclature given to the incentive, it is the purpose/source of the grant which will determine its very nature. Indeed, the nomenclature appears to be merely a design to circumvent existing rules governing CNA and the same should not be countenanced,” the decision read.