COA affirms P2 million disallowance vs GSIS

MANILA, Philippines — The Commission on Audit (COA) has affirmed a notice of disallowance (ND) against the Government Service Insurance System (GSIS) over the unauthorized payment of P2.125 million in consultancy fees to four private lawyers in 2014.

In a decision dated Jan. 24, 2022 but uploaded on the COA website only recently, the COA denied the petition for review of the GSIS and its concerned officials seeking to nullify the disallowance notice issued by the audit team on Sept. 23, 2015.

The ND covers the payments of consultancy fees amounting to P2.125 million to four private lawyers in 2014 without the written conformity and acquiescence of the Office of the Government Corporate Counsel (OGCC).

The audit team said the hiring of the private consultants also did not have the written concurrence of the COA, in violation of COA Circular 95-011 dated Dec. 4, 1995, Circular 86-255 dated April 2, 1986, and Section 3 of Memorandum Circular (MC) No. 9, Series of 1998 of the Office of the President.

The COA said that its Circular 95-011 and Circular 86-255 as well as MC No. 9 all explicitly state that government-owned and controlled corporations (GOCCs) like the GSIS “are prohibited from hiring private lawyers to handle their cases and legal matters, save for exceptional cases, which require the approval of the OGCC and the COA.”

The COA gave no merit to the GSIS’s argument that the requirements of written conformity and acquiescence of the OGCC and concurrence of COA apply only in the hiring of private lawyers who will represent the corporation before the courts and render legal services, but not to consultancy services for the individual members of the GSIS Board of Trustees (BOT).

The commission, however, modified the ND to exclude the four private lawyers – retired justices Conrado Vasquez Jr. and Josefina Salonga, and lawyers Waldo Flores and Elmer Lopez – as among those liable for the return of the disallowed amount.

Among the GSIS officials identified in the ND as liable for the approval and release of the payments were president and general manager Robert Vergara, BOT chairman Daniel Lacson Jr., BOT members Geraldine Marie Berberabe-Martinez and Romeo Alip and Officers V Josefina Maitim, Dickson Berberabe and Elmer Lagasca.

Meanwhile, the COA directed the audit team leader and supervising auditor to determine the extent of possible participation of other members of GSIS BOT in the approval of Board Resolution No. 135 dated Oct. 28, 2010, which became the source of authority in the hiring the consultants, “and the issuance of a supplemental ND, if warranted.”