SSS returns to Bureau of Treasury P5.7B unused funds for Small Business Wage Subsidy Program during Covid-19 pandemic

The Social Security System (SSS) has returned to the Bureau of Treasury (BTr) P5.7 billion unutilized fund for the Small Business Wage Subsidy (SBWS) Program of the Department of Finance (DOF) to help small business employers and employees during the Covid-19 pandemic.

In its Peformance Audit Report on the SBWS program, the Commission on Audit (COA) said that a total of P51 billion was allocated for the program on June 25, 2020, which should have helped approximately 3.4 million employees. The DOF spearheaded the program through the Bureau of Internal Revenue (BIR) and SSS.

In its report, COA said that implementing the SBWS Program necessitates "meticulous planning," given its scope. But "because of the speed with which it was implemented, there was insufficient data entry and acceptance of erroneous and/or incorrect beneficiary information, which resulted in the inability to distribute P6.7 billion in wage subsidies and the subsequent return of P5.7 billion to the BTr," it said.

The COA reported that as of Feb. 15, 2022, SSS had returned to the BTr unutilized SBWS Program funds totalling P5.7 billion, including interest earnings totaling P2.8 million.

The DOF explained that the program was not extended nor reopened, and the P5.7 billion was returned because the program's aim was to provide "immediate relief" to affected small business owners and their employees during the government-imposed lockdowns.

When the COA reviewed the program guidelines, the audit team deduced that there was an assumption made that the SSS and employers would communicate effectively. It was assumed that SSS will notify employers of any problems identified with the credentials of beneficiaries, while employers will notify SSS if wage subsidies are being claimed incorrectly.

However, SSS had difficulty contacting employers and responding to questions and concerns, it said.

The COA said that there was still a "timely release" of wage subsidies amounting to P45.1 billion, which makes up for 89 percent of the allocated budget of P51 billion.

"Out of the 3.4 million target number of employees, a total of 3.1 million or 91 percent received wage subsidies from April 29, 2020, to June 25, 2020. Nevertheless, critical challenges in the program implementation affected the efficiency and effectiveness of the program," COA's report stated.

The COA cautioned that a similar situation might occur in the future, so the SSS, in coordination with the DOF and BIR, should conduct a "risk assessment" to identify potential problems and develop appropriate strategies and mitigating measures to address them.

It also asked SSS, DOF and BIR to revisit and improve the identification process of target beneficiaries to ensure that all affected employees receive equal opportunity to apply to the program, and enhance the system used in SBWS Program.