COA chides PhilHealth officials for delaying audit of P62 billion in transactions

By Ben Rosario

The Commission on Audit (COA) chided officials of Philippine Health Insurance Corporation (PhilHealth) for delaying full access to government auditors on its New Claims (NClaims) system that prevented the conduct of substantive testing on All Case Rates (ACRs) transactions amounting to P62.693 billion.

Commission on Audit (MANILA BULLETIN)
Commission on Audit (MANILA BULLETIN)

In the recently-released 2018 Philhealth annual audit report, COA also warned Philhealth against lapses in the selection of corporate bond investment totaling P14.345 billion, stressing that this could expose government funds to “undue risk or loss.”

COA disclosed that its auditors have not been given access to PhilHealth’s eClaims Systems, an interconnected modular information system on claims and benefit payments. The implementation of eClaims was aimed at reducing the turnaround time, and hasten payments to claims made by Health Care Institutions (HCIs).

In 2018, benefit claims paid out by Philhealth totaled P121.041 billion, it was gathered.

“The faithful representation of the Benefit Claims expenses account totaling P121.041 billion for Calendar Year 2018 was not established due to the delay in the grant of full access to PhilHealth New Claims (Nclaims) System which precluded the audit teams to conduct substantive testing on All Case Rates (ACRs) transactions amounting to P62.93 bilion or 51.79 percent,” COA said.

The state audit agency decried the failure of the PhilHealth to grant auditors access to the System notwithstanding several verbal and writte requests made by auditors.

“The delayed grant of access to Nclaims System limited the scope of the audit done by the audit Teams at the PROs (Philhealth Regional Offices) particularly in determining the correctness and completeness of the recorded eClaims processed and paid which ttotaled P62.6934 billion.

As a result of the delay in the grant of access, auditors said under and over payments of actual hospitalization expenses incurred were not established.

The completeness of supporting documents was not determined, the COA added.

Auditors warned that the failure of Philhealth to grant full and continuous access to its systems and programs needed for the conduct of audit is a violation of Presidential Decree 1445.

In its audit of the corporate bond investment, COA noted various lapses that included the non-notarization of seven out of 124 Prospectuses and the unaudited financial statements of one of the bond issuers in the evaluation of financial status and its credit worthiness.

Further, audit inspectors said the computation of the 1.25 per cent net earnings available for recurring expenses of the issuing institution, net earnings were “inconsistently considered.”

“We recommended that Management, henceforth, undertake due diligence analysis in evaluating the creditworthiness and consider internal analyses, third party research and analytics and other sources of information appropriate for the particular security and its compliance with the laws and regulations governing the Corporation’s mandate to invest in Debt Securities and Corporate Bonds issuances,” the audit reported stated.