Wednesday, July 27, 2016

COA red-flags P1.35B AFP pension payments

From Malaya Business Insight (Jul 28): COA red-flags P1.35B AFP pension payments

THE Commission on Audit has raised concerns over possible irregularities in the pension system of retired personnel of the Armed Forces of the Philippines in the second half of 2014 and the whole of 2015 amounting to P1.354 billion.

In the 2015 audit report on the AFP General Headquarters released last July 13, the COA noted “high incidence of overpayment of pension benefits to deceased pensioners” totaling P126.82 million; continuing deposit of benefits to “tagged or doubtful pensioners’ accounts” in the sum of P1.078 billion; and “high occurrence of stale checks” worth P147.51 billion.

Auditors however said the scope of their investigation was limited by the restricted access to the Pension Management Information System (PenMIS) and the Finance Management Information System (FMIS) which are being maintained by the AFP Pension Gratuity and Management Center (PGMC) and the AFP Finance Center (AFPFC).

To test the validity of benefit payments to retired personnel, the audit team randomly selected 18 pensioners including 13 who are recorded as 100 years old and above by sending them confirmation letters and checking their status with the Philippine Statistics Authority.

“Results revealed that the 18 pensioners who were confirmed deceased continue to receive their monthly pension with aggregate amount of P19,770,967.59,” the report noted.

The findings showed two died in 2008; three each for years 2009, 2014, and 2015; one each for years 2010, 2011 and 2013; and four in 2012.

“On top of the 18 deceased pensioners, [an] additional 722 were likewise paid pension benefits CY 2015 and from June to December 2014 amounting to P79,665,689. Hence, overpayments to unreported deceased pensioners mounted to at least P126,834,570,” the COA said.

As of January 31, 2016, only P44.2 million of the said overpayment was recouped and returned to the AFP Pension mother account while auditors said there is little chance the balance would still be retrieved.

“P82,628,918.05 was still unrecovered...the amount is considered leakage costs due to its remote chance of being recovered,” auditors said.

The COA raised questions why the PGMC and the AFPFC failed to track or monitor the status of pensioners as they advanced in age.

“Management is not properly informed of how much pension benefits were paid to unqualified pensioners/beneficiaries in prior years and how much is unrecovered and unrecorded. [It has] inadequate if not nil knowledge on the degree of pervasiveness of the condition observed as this has been happening in previous years,” the commission said.

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