Findings No.3 COA Annual Audit Report 2005

July 26, 2008

3. Contributions due to GSIS, PAG-IBIG and Philhealth of all officials and employees of the Province of Misamis Oriental amounting to P14,328,494.81 covering the months of October, November and December 2005 were not remitted on time in violation to RA 8291.

Section 69 (1) of PD 1445 states that public officers authorized to receive and collect moneys arising from taxes, revenues, or receipts of any kind shall remit of deposit intact the full amounts so received and collected by them to the treasury of the agency concerned and credited to the particular accounts to which the said moneys belong. The amount of the collections ultimately payable to other agencies of the government shall thereafter be remitted to the respective treasuries of these agencies, under regulations on which the Commission and the Department of Finance shall prescribe.

In conjunction with the above regulation, Sections 3.3.1; 3.4 and 3.6.1 of RA 8291, the GSIS Act of 1997, provides that it shall be compulsory upon the employer to deduct and withhold each month from the monthly compensation of each employee his contributions as specified under Section 3.1. Each employer shall remit directly to the GSIS, the employees’ contributions within the first ten (10) days of the calendar month following the month to which the contribution apply. The remittance by the employer of the contributions shall take priority over and above the payment of any and all obligations, except salaries and wages of its employees.

Review of the year-end trial balance revealed that a total of P14,328,494.81 representing contributions withheld from the salaries of all officers and employees of the Province were not remitted on time. (ANNEX B). These contributions consist of withholding taxes, optional life insurance premiums, pre-need monthly installments, loan amortization and other such amount due to GSIS, PAG-IBIG and Philhealth for the months of October, November and December 2005.

It was learned from the Provincial Accountant that the Province is strictly following a payment scheme due to their huge monthly long-term loan amortization. As such, despite the remittance lists were long been ready and completed, the corresponding checks for its remittances were not yet prepared.

Under such circumstances, corporate agencies concerned were deprived of their additional income generation. Moreover, officers and employees of the Province encountered inconvenience in the processing of their loan applications and other claims, and more particularly, suffered the burden of paying unsolicited penalties and surcharges aside from being deprived of the benefits they can derived out from those contributions.

Recommendation:

Prompt, regular and monthly remittances of withheld contributions are strictly enjoined for the benefits of the government-owned and controlled corporations concerned and the general welfare of the officers and employees as well.

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Written by admin · Filed Under Commission on Audit, Misamis Oriental