COA flags P333M in SSS incentives, benefit irregularities

The Commission on Audit (COA) has flagged multiple questionable financial transactions made by the Social Security System (SSS) in 2024, citing contentious cash incentives to thousands of employees, procurement irregularities, benefit underpayments, as well as overpayments to deceased pensioners, which occurred under then-President and CEO Rolando Macasaet.

In its 2024 Annual Audit Report (AAR), COA flagged SSS’s disbursement of cash incentives—up to P50,000 each—to 6,525 employees, totaling P333 million. The payments were made under the agency’s Prestige Award, which, according to internal memos, recognizes employees whose achievements bring further acclaim to the institution.

“The SSS granted the Prestige Award cash incentive of up to P50,000 each to its 6,525 officials and employees totaling P333 million, pursuant to the Program on Awards and Incentives for Service Excellence (PRAISE) under Civil Service Commission (CSC) Memorandum Circular No. 1, s. 2001, without substantiating the savings generated from innovations, superior accomplishments, or other personal efforts,” the AAR stated.

“Moreover, other awards under the program were granted at a fixed amount of cash incentive regardless of the actual savings generated from the personal efforts recognized. These practices resulted in irregular and excessive expenditures, which are not allowed in audit.”

COA clarified that monetary rewards may be granted only when employee accomplishments result in measurable monetary savings, and even then, the award must not exceed 20 percent of the savings generated.

The Commission has since ordered SSS to submit an evaluation report showing how the incentives were justified. Without proper documentation, auditors said the SSS must refund all unsubstantiated cash awards.

The audit further revealed that the SSS purchased 143,424 rolls of tissue paper worth P13.195 million—approximately P91 per roll.

“The supply exceeded the agency’s two-month requirement; and a total of 116,046 rolls remained at the supplier’s custody without any agreement due to lack of policy on procurement of supplies and equipment,” COA added.

According to state auditors, the money spent on the excessive purchase could instead have funded pension benefits for roughly 2,000 SSS retirees or funeral benefits for 650 deceased members—two areas where COA also found deficiencies.

In addition, the AAR revealed nearly P3 million in unpaid funeral benefits due to computational lapses. COA reported P2.833 million in underpayments, noting that 293 of 1,584 sampled claims were incorrectly computed due to incomplete assessment of contributions.

COA also found that SSS continued to remit pensions to deceased beneficiaries, resulting in P24.811 million in overpayments. The audit stressed that this “highlights significant weaknesses in the SSS’ financial safeguards,” contributing to the loss of government funds and risking the long-term viability of the pension system.

COA's 2024 AAR of SSS covered suspicious transactions under the helm of former President and CEO Rolando Macasaet, who resigned as SSS chief on 04 October 2024 to run in the 2025 midterms under the SSS-GSIS Pensyonado Party-list.

In January earlier this year, the current SSS President and CEO addressed another concern from the state auditor—this time regarding uncollected contributions from employers, which COA said amounted to around P89 billion.

“It’s an old COA report that talks about the delinquency of employers from SSS. From that time it was P89 billion. After reconciliation, as of October 2024 that number has gone down to P46 billion, and we are constantly working on trying to assess ibang sources nitong discrepancy na ito,” he said.

SSS also previously came under fire for four of its high-ranking officials profiting off alleged insider trading in 2017.

SSS today disbursed P18.8 million in 13th-month pension to approximately 3.66 million pensioners. The AAR stated SSS handles over P200 billion in assets as of the end of 2024.