The Commission on Audit. INQUIRER FILE PHOTO
MANILA, Philippines—Unlike the bettors, the employees of the Philippine Charity Sweepstakes Office (PCSO) need not play the lottery to rake in a windfall.
In a report, the Commission on Audit (COA) said the state-run lottery firm failed to remit to the National Treasury P959.5 million of its earnings in 2012.
In its scrutiny of the PCSO’s financial transactions, the COA found out the lottery management gave out P202 million in bonuses and allowances to its officials and employees in 2013 without a legal basis.
In addition, the state auditors found the government-owned agency released more than P232 million in the last nine years for projects that had yet to be completed.
Not approved by President
“The grant of allowances, bonuses and other benefits to the officials and employees of PCSO… were either in excess of those authorized under existing compensation laws, rules and regulations, without sufficient legal basis, or without approval from the Office of the President,” said the COA audit report posted on its web site on Thursday.
The COA directed the PCSO to pay back in full the financial benefits it illegally gave its employees.
It said the additional benefits included a clothing and uniform allowance, staple food and medicine allowance, hazard pay, Christmas bonus, Christmas grocery bonus and performance bonus paid to PCSO officers, regular employees and contractual workers.
“It can be ascertained… the grant of the allowances, bonuses and other benefits significantly deviated from the rules and regulations framed by compensation laws and other legal issuances,” the COA said.
“Moreover, the PCSO was not able to present applicable authority to justify and validate such deviation. Hence, the audit team considered the incentives to be without legal basis and were not proper under the circumstances,” it said.
In its reply to the audit, the PCSO management said the bonuses were actually “approved/confirmed” by President Aquino in a letter issued by Executive Secretary Paquito Ochoa Jr. on May 19, 2011.
2012 income not remitted
But the COA said Ochoa’s letter specifically stated the grant of bonuses was approved only for those given out before Sept. 8, 2010.
“Thus, the justification presented by the [PCSO] is not applicable under the circumstances and insufficient to validate the grant of the allowances, bonuses and other benefits under audit,” the COA said.
The COA found the PCSO did not remit to the national government half of its P1.919-billion income in 2012 in violation of Section 3 of Republic Act No. 7656, which clearly states that government-owned and -controlled corporations (GOCCs) must “declare and remit at least 50 percent of their annual net earnings as cash, stock or property dividends to the national government.”
In justifying its action, the PCSO said it did not post any income since the savings from its bet collections were deposited to the PCSO Charity Fund which finances its health programs, medical assistance and other charity projects.
It said it was merely an “administrator or fiduciary of the fund” because the use of the money required the approval of the President.
It said that 55 percent of its collections from bets was allocated to its prize fund, 30 percent to its charity fund, and the remainder for operational expenses.
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