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SSS funds and assets worth P17-B mismanaged - COA report

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Photo from Philippine Star


QUEZON CITY  â€” The management of the Social Security System (SSS) has come under fire from the Commission on Audit (COA) itself for mismanagement of its funds and assets amouonting to several billions of pesos.


The COA released its report on the agency amidst the SSS officials' insistence supporting President Aquino's veto of an approved bill providing P2,000 additional pension to each of all SSS members who are retirees.


Amidst backlash from the SSS members and the people, the SSS management also insisted on plans to increase SSS individual contributions despite of poor collection record.


In its audit report for 2014, COA listed SSS assets which it observed have been mismanaged and have hindered the pension fund agency from putting their money into profitable investments and from improving its pension and services to millions of contributors.


In its annual audit report covering the year 2014 and early part of 2015, COA said the SSS has foregone an estimated rental income of P198.118 million on properties like land, condominium units and buildings valued at P17.956 billion.


COA said these properties are idle but are incurring fixed costs, such as condominium dues and other utility costs.


The report said that under the investment property account or properties held to earn rental and/or capital appreciation, the SSS owns 102 condominium units in seven condominium buildings in Metro Manila; 44,000 square meters of office space, 16 residential houses and 69 parking lots, all valued at P17.956 billion.


The SSS owns 19 condominium units in Bella Villa, 51 units in Pioneer Highlands, one unit in Renaissance Tower, five units in Cyber One, four units in Bayview Tower, 18 units in Pryce Center and four units in EGI Rufino Plaza.


SSS also owns 44,000 square meter of office space in FCA 5 HK Sun Plaza and 16 office units in Philamlife Tower. It also owns 12 houses in Urdaneta Village Casa Real, and four houses in Urdaneta Village Residential.


SSS also acquired 69 parking lot spaces worth more than P37 million.


COA said these assets are idle and have no lessees, thus, “depriving the SSS of an estimated P198.118 million in a year when occupied/rented, computed based on the lowest rental rate of lessees in the condominium units, office/store spaces, houses or parking lots."


Further, COA said, "the idle/unoccupied properties incurred fixed costs such as association dues, electricity and water bills, repairs and maintenance, and manpower without any return on invested capital."


But COA found more SSS assets that were idle in Davao City.


The SSS also owns 15 units in Pryce Tower located in Pryce Business Park, J.P Laurel, Bajada, Davao City. It is a 15-story condominium building located in the Davao City business district. The SSS acquired the units in 2000 through stock to property swap.


The SSS owns three units in the 7th floor, seven units in the 10th floor, four units in the 14th floor and one unit in the 15th floor with a total floor area of 2,524.15 square meters.


COA, following its ocular inspection, said the units are ideally suitable for office spaces. The units are fairly maintained and with the location, SSS could demand high rental rates. However, of the 15 office condominium units owned by SSS, only one unit is being rented out.


SSS also acquired parking slots, located at the basement of Pryce Tower. Two units of parking slots are allocated to each office condominium. Ocular inspection showed 50 parking slots, while the IAD of SSS recorded 60 parking slots at Pryce Tower. The SSS Housing Asset Management Section (HAMS) Davao, however, reported 45 parking slots only.


SSS also owns 663 units of memorial lots in various measurements in Mt. Apo Garden Memorial Lots in Barangay Calinan, Davao.


COA said most of the memorial lots were not sold or occupied. There were few sales since its acquisition in 2000. According to an SSS personnel in Davao, one reason is only single interment is allowed unlike other memorial gardens that allows more than two interments. Another reason is its very far location from the city proper, thus residents would rather buy memorial lots located in the city.


All 663 memorial lots are idle.


COA also reported that SSS' unsettled dishonored checks continued to increase and have reached a total of P107.738 million in 2014, hence, "members/beneficiaries with deducted premium contributions and/or loans are deprived of timely availment of the social security protection and benefits due them, and the SSS of additional funds to be extended as social security protection and benefits for its members/beneficiaries."


Review of the list of dishonored checks as of November 30, 2014 from the Cash Department revealed a cumulative 3,544 unsettled dishonored checks totaling to P107.737 million, the report said.


Ma. Luisa Sebastian, assistant vice president of SSS, denied the COA allegations, saying it is unfair to say that the SSS has mismanaged the funds of the members.


According to Sebastian, their financial status will show that they have protected their assets, investments and members' contribution for the past six years.


"Hindi namin mainitindihan kung saan galing ang alegasyong hindi tama ang pamamahala naming. Kung titingnan po ang aming financial status, mula P8 billion on average revenue ng 2000 hanggang 2009, from 2010 ang average na natin 33B every year. Dito maipapakita namin maayos ang pamamahala ng pondo ng SSS," Sebastian said.


On the issue of dishonored checks, Sebastian said the SSS legal team has been continually pursuing those individuals or companies with dishonored checks.


She said they have also put up a Fraud Department that validates the checks before these are accepted, and reports are done monthly to ensure dishonored checks are replaced immediately for more efficient collection of contribution.


Sebastian also explained that out of some 93,000 delinquent employers, the SSS has already filed cases against 33,000 delinquent employers and has collected some P468 million.

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