GSIS officers, staff ordered to refund almost P7-B illegal pay raise

MANILA, Philippines – The Commission on Audit (COA) has ordered officials and employees of the Government Service Insurance System (GSIS) to refund P6.98 billion in illegal pay increases over a 12-year period from March 1988 to December 2010.

The COA in two separate decisions affirmed the notice of disallowance of the pay increases. Held liable for approving the Board of Trustees’ resolutions granting a pay increase for all personnel were GSIS executives Bernardino Abes, Winston Garcia, Jesse 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.

Isabellita Irlandez, Lea Mendiola, and Marilyn Concepcion were also liable for approving the payments for the pay increases from GSIS funds.

Rank-and-file employees, who had no say in approving or processing the wage hikes, were also ordered to refund the increases since they had benefited from these.

When the GSIS officials petitioned for a review, they claimed that its charter exempted it from the coverage of the Salary Standardization Law, as well as the requirement for presidential approval.

They also argued that since the GSIS personnel were already enjoying the increased wages, having to refund the value would violate the principle of non-diminution of benefits.

But the COA held that the Board of Trustees (BOT) was not exempted from the requirement of having wage increases approved by the president. The commission acknowledged that the GSIS Charter was a law, but it was not above presidential oversight over all executive departments, bureaus, and offices.

They also reminded the petitioners that the requirement for presidential approval was a safeguard against misuse of funds.

“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President is self-executing and does not require statutory implementation, nor may its exercise be limited, much less withdrawn, by the legislature,” the COA said.

“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,” the commission added.

The COA also rejected the petitioners’ argument that those who accepted the wage increases in good faith be allowed to keep the payments, since officials intentionally ignored several admonitions about the salary increases’ lack of legal basis.

“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. – Rappler.com