Secret GSIS perks bared

MANILA, Philippines—The board of trustees of the Government Service Insurance System (GSIS) enjoyed excessive benefits in 2009 at a time when the money could have been used for programs to benefit the state-run pension fund’s members, according to the Commission on Audit (COA).

In its 2009 report on the GSIS released recently, the COA said that the GSIS had tried to hide the amount of compensation its officials and directors were receiving by making the records confidential, especially when the benefits appeared to be excessive or unconscionable.

The COA said the eight-member board of trustees received an P88-million compensation package in 2009 (P11 million for each director), which it “considered an excessive spending of the pension fund, which could have been utilized on programs to increase benefits of GSIS members.”

‘Unjustifiable’

The COA also found that the P2.945-billion compensation package of all GSIS personnel (not including the board of trustees), which had not been subjected to administrative review, far exceeded the compensation received by their counterparts in the national government.

The audit agency also found unnecessary and unjustifiable the P135.471 million that the GSIS spent for advertisements and public relations in 2009 since its clients were a captive market.

It also questioned the purchase of P25-million worth of avian flu medicine for GSIS employees.

According to the COA report, the payrolls covering the compensation package of GSIS officials were made confidential in 2008, which was why reports on the board directors’ salaries were not validated earlier.

It said the GSIS had no basis for treating these expenses as confidential.

The audit agency said the GSIS management’s interpretation of its charter, saying it had absolute power to set compensation, gave it the leverage to increase, grant and approve allowances and benefits for themselves “without regard to existing laws, rules and regulations.”

The board directors also received the following benefits: A 13th and 15th month pay, midyear financial assistance, a 45-percent share in the Provident Fund of P293,651 per month for each board member, and a productivity and incentive bonus of four months, amounting to P2.6 million for each director.

The COA questioned the grant of benefits from the Provident Fund to the board members, saying they were not eligible for membership in the fund as they are not organic personnel and do not contribute to the GSIS.

It also questioned using as the basis for computing the amount of these various benefits the monthly salary of the GSIS president and general manager, pegged at P652,558.

It said the proper basis for computation should be the directors’ per diem, which is P2,500 (but not to exceed P10,000 a month) for each board meeting.

Other benefits received by directors in 2009 included a rice allowance, clothing allowance, grocery bonus, anniversary bonus, cash gift, meal allowance, car loan subsidy and a BOT (board of trustees) allowance. They were also paid reimbursements for representation expenses and medical expenses.

The COA found that the board directors had fixed for themselves a monthly representation and transportation allowance of P120,000 and P40,000, respectively. Based on the number of meetings attended, this was equivalent to receiving P80,000 for each board meeting, the COA said.

It also found that six of the board members had reimbursed representation expenses worth P2.157 million in 2009.

The audit agency recommended the suspension of allowances and benefits in violation of existing regulations, and said board directors should refund all disallowed benefits.