Government auditors said they found “dishonesty and falsification” in the financial records of the Philippine Health Insurance Corp. (PhilHealth) that were intended to conceal the true financial condition of the state insurer.
Documents obtained by the Inquirer indicated that PhilHealth Senior Vice President Renato Limsiaco Jr. may have been responsible for the unexplained changes in the financial records uncovered by the Commission on Audit (COA) and in-house auditors.
Limsiaco was also linked to the allegedly irregular release of a special P30-billion reimbursement fund for hospitals taking care of COVID-19 patients.
Among the dubious items that PhilHealth’s own auditors found was the “restatement,” or bump, in its net income in 2018, from P11.6 billion to P21.02 billion, supposedly due to the decrease in the benefit claims of its members. They also saw that PhilHealth’s time deposits ballooned from P1 billion to P70 billion from 2018 to 2019 along with a spike of P35 billion in payable benefit claims for the same period without a clear explanation.
Report to Morales
“A more detailed analysis of the 2019 financial statements reveals more discrepancies amounting to serious dishonesty and falsification,” the resident auditors said in a report submitted to PhilHealth President and CEO Ricardo Morales in early May.
“Financial statements are window-dressed by … Limsiaco in order to mislead the board regarding the real financial state of PhilHealth,” they said.
The explanation given by PhilHealth’s finance officials just “contains a blanket response that everything that is contained in the financial statement” conformed with Philippine financial and accounting standards, they added.
Limsiaco, who heads the PhilHealth Fund Management Sector, declined to comment on the allegations against him.
He told the Inquirer in a text message on Thursday that “as a corporate policy, all media concerns will be referred to PhilHealth’s Corporate Affairs Group.”
The group’s head, PhilHealth spokesperson Shirley Domingo, refused to directly comment on the audit findings.
“We have sufficiently addressed the issues in our statement on this,” she told the Inquirer also in a text message. She was referring to earlier Inquirer reports on alleged irregularities in PhilHealth’s information technology (IT) project and the disbursement of the hospital reimbursement fund.
‘Hard time’
“We will answer any other queries in the proper forum,” Domingo said.
The internal auditors noted various differences between the fiscal documents that a team of COA auditors had examined and the separate financial report that Limsiaco’s office presented to the PhilHealth board.Sen. Panfilo Lacson told the Inquirer that Limsiaco was “the one allegedly manipulating the financial figures.”
“COA had a hard time [auditing PhilHealth] because they doctored the ‘prior year adjustments’ [in their income]. They were doing maneuvers [in the financial records],” he said.
Lacson, citing the COA report, said PhilHealth “has P111 billion in liabilities and P109 billion in equities, or a debt to equity ratio of 1 is to 0.99.”
Investigation results
He and Senate President Vicente Sotto III filed a resolution to open a probe into the latest corruption allegations against PhilHealth by a recently resigned antifraud legal officer of the state insurance company.
The resignation of PhilHealth lawyer Thorrsson Montes Keith last week also prompted Malacañang to open its own investigation of the alleged corruption in PhilHealth.
Greco Belgica, head of the Presidential Anti-Crime Commission, said the results of its investigation “will be released very soon.”
Lacson said Limsiaco was among those invited to the Senate hearing next week to shed light on the disbursement of PhilHealth’s P30-billion Interim Reimbursement Mechanism (IRM) supposed to be used to pay hospitals in the COVID-19 front line.
In their resolution, Lacson and Sotto said Limsiaco’s office had presented financial documents that “purportedly revealed discrepancies in the presentation and disclosure of accounts.”
“[Limsiaco’s office] has been allegedly manipulating the PhilHealth’s financial statement by overstating its income through reduction of the amount of benefit claims,” the resolution said.
The two senators said the disparities and alterations in PhilHealth’s resources could be intended to hide its alarming financial state.
Reacting to the auditors’ report on PhilHealth’s controversial P2.1-billion IT project, the state insurer on Wednesday quoted Morales as saying that the report was meant “to identify discrepancies … so corrections can be done.”
Morales said that because of the “highly technical nature” of the project, PhilHealth’s board needed assistance from a third-party group of experts who would review the “items,” or equipment they were to procure and to help develop their IT road map. “The items as reported in the news are not yet in the stages of procurement but rather are still in the review stages,” Morales said. “The report is intended for internal consumption and will surely result [in] misinformation if disseminated to unintended users,” he added. “The report itself does not contain the words ‘overpriced,’ ‘corrupt’ and ‘syndicate.’”
The COA team said PhilHealth’s board turned down the IT project for “failure to provide specific details” of the new system. A correction of “typographical errors” later reduced the budget to P1.9 billion, the state auditors said.
The project was the subject of a heated argument between Morales and other PhilHealth board members just a day before Keith resigned on Thursday last week. —WITH REPORTS FROM JOVIC YEE AND JULIE M. AURELIO