COA: PAGCOR under-remitted to gov't by P22.8B, but overcompensated execs

The management of the Philippine Amusement and Gaming Corporation (PAGCOR) under-remitted the government by P22.8 billion in revenues but granted P334.8 million in awards and allowances to its officials in 2017, the Commission on Audit said in its audit report.

COA auditors said PAGCOR has a total accumulated deficiency owed to the Bureau of Treasury of P21.186 billion spanning from 2011 to 2017, or an under-remittance of about P3 billion per year.

This is due to PAGCOR's computing the government's 50-percent share based on its income from its gaming operations, not on its overall income.

The COA reminded PAGCOR in 2016 that Presidential Decree No. 1869 states that the government-owned and -controlled corporation must remit the 50-percent government share from its overall income and not from gaming operations alone.

The total income from PAGCOR's gaming operations reached P57.34 billion last year, P28.67 billion of which has been remitted to the government.

If PAGCOR followed PD 1869, the COA said, the government's share would have reached more than P29.9 billion out of the corporation's total service and business income of P59.892 billion.

However, the COA said PAGCOR management disagreed on this computation and thus maintained the source of income remittance on gaming operations.

"The COA Audit Team continues to hold its stance that the 50-percent government share should be computed based on the entire income of PAGCOR and not only on income from gaming operations," the report read.

PSC share

The COA further said that PAGCOR failed to correctly compute the five-percent share of the Philippine Sports Commission (PSC) pursuant to the PSC Act, thus resulting in a deficiency of P1.631 billion.

The law states PSC must receive five percent of PAGCOR's overall income to finance the country's sports development programs and its participation in international sports competitions.

The COA noted PAGCOR again based its "erroneous computation" on its income from gaming operations.

The COA emphasized that PAGCOR should recompute the income share of the government and seek legislation of a new law if the new computation will deplete PAGCOR earnings.

Gold rings

Despite the deficient remittances, COA said PAGCOR management granted its 20-year loyalty awardees with 18-karat, 10-gram gold memento rings with an aggregate value of P13.02 million.

The purchase of the golds rings is even higher than the total amount of P12.495 million cash awards given to all loyalty awardees regardless of their length of service.

The COA said these awardees also received a cash reward of P10,000 plus one month's basic salary, which is a violation of COA Circular No. 2013-003A dated September 18, 2013 that provides a reward of only around P2,500 to P5,000.

The commission directed PAGCOR to seek presidential approval first before granting additional benefits to its loyalty awardees. It said PAGCOR management agreed to this recommendation.

Allowances

The PAGCOR also gave P58.334 million worth of representation and transportation allowances (RATA) to its officials, half of which, or P29.167 million, went to the same officials with existing car loan plans.

The COA called the RATA excessive, saying PAGCOR used its own rates on RATA instead of adhering to the General Appropriations Act.

The COA said PAGCOR president and chief executive officer Andrea Domingo received a total RATA of P110,000 last year, whereas department secretaries are only eligible to receive a RATA of P28,000 under the national budget.

PAGCOR president and chief operating officer Alfredo Lim also had a higher RATA of P90,000 compared to the P22,000 worth of total allowances given to department undersecretaries.

The COA said permanent and full-time PAGCOR officials with salary rates under Pay Class (PC) 9 and above also availed of car loan plans but still received transportation allowances.

It said this violates Section 54 of the GAA, which states: "transportation allowance, whether in full or partial amounts, shall not be granted to officials who are assigned or actually using government motor transportation."

The COA said PAGCOR management has agreed with its recommendation to ensure that all officials who avail a car loan plan will no longer receive transportation allowances.

Furthermore, COA said PAGCOR officials and employees in Casino Filipino-Davao received Cost of Living Allowances (COLA) totaling P3.113 million.

The COA said this is a double compensation since these officers already have a total Personnel Economic Relief Allowance (PERA) worth P9.977 million.

PAGCOR's vice president for Human Resources told COA that COLAs had been part of the compensation package of its employees, but the commission said PERA already replaced COLA since 1997.

The official also explained that both COLA and PERA are included in the PAGCOR compensation package as stated in a confirmation letter from the Department of Management dated June 9, 1993.

However, COA maintained that this practice is still considered double compensation.

CEO Awards

The PAGCOR, meanwhile, stood defiant that its P643,000 cash benefits given to the awardees of the Circle of Extra-Ordinaire (CEO) Awards is not covered by existing regulations of the Civil Service Commission.

The COA said PAGCOR should have submitted its list of awardees to the CSC for review and approval, but management replied that the CEO Awards is different from the CSC's Program on Awards and Incentives for Service Excellence (PRAISE).

The commission said PD 1869 "merely exempts PAGCOR from personnel management policies and not on the other aspects of civil service" and urged PAGCOR to submit the list of awardees for CSC review.

In response, PAGCOR management told COA it cannot submit the list to the CSC since this "abandons" the authority of its Board of Directors to set personnel management policies.

Car, housing benefits

The COA said PAGCOR management also granted car plans worth P125.954 million and housing benefits worth P121.289 million to its high-ranking officials in 2016 and 2017, respectively, despite having no presidential approval.

Officials with salary rates PC 9 and above can avail of the car plan for every five years. This plan is also a requirement for them to secure the housing benefit.

The PAGCOR will shoulder 45 percent of the cost of the car, while it will subsidize 60 percent of the allocation for the housing benefit.

However, COA said the absence of presidential approval on these employee benefits makes them "questionable due to lack of basis."

"We recommended and management agreed to seek post facto approval from the Office of the President to avoid possible audit suspensions and/or disallowance," COA said. — BM, GMA News