COA flags ‘overpriced’ PhilHealth IT challenge

COA flags ‘overpriced’ PhilHealth IT project

MANILA, Philippines — A proposed P2.1-billion info technology (IT) task of Philippine Wellbeing Insurance plan Corp. (PhilHealth), supposedly designed to stem fraud and cons devised by some corrupt personnel, was itself fraught with irregularities, government auditors have observed.

One particular component of the venture flagged as “anomalous” by the Commission on Audit (COA) and PhilHealth’s resident auditors in 3 individual experiences was the prepared procurement of several tools worth P734 million, which was not contained in the original spending budget proposal submitted by the point out insurer.

In their report in May perhaps, 1 group of COA auditors found that the finances for 5 “ICT (data and communications technological know-how) resources”—computers, scanners and other items—was overpriced by P98 million.

The inner auditors, who explained that a “syndicate” was running in the condition-run corporation, found that some of the devices and personal computer applications PhilHealth was preparing to invest in were remarkably overpriced.

Lawyer’s gripes

An Adobe software program, which charge P168,000 for every device, was outlined as P21 million every in the proposed spending plan submitted by PhilHealth’s IT sector, a whopping 12,400-per cent boost from its first rate, the auditors reported in their report also in May.

The value of things underneath “application servers and licenses” was increased to P40 million from its preliminary spending budget of P25 million, the internal auditors claimed.

Resources common with the studies reported the allegedly irregular IT challenge was one particular of the factors attorney Thorrsson Montes Keith stop his put up as PhilHealth antifraud officer. The undertaking sparked a “shouting match” among PhilHealth executives through an on the net meeting on July 22, a day ahead of Keith submitted his resignation letter.

In his letter to PhilHealth president and CEO Ricardo Morales, Keith cited “widespread corruption” as one of the explanations he was leaving PhilHealth. He did not elaborate.

The most current corruption scandal came a 12 months just after the Inquirer printed a series of investigative stories about how the point out-owned insurance plan enterprise shed P154 billion by way of numerous kinds of fraud, such as reimbursements for “ghost dialysis,” overpayments, untrue statements and “upcasing” of typical conditions.

In his Condition of the Nation Tackle in 2019, President Duterte claimed he was “grossly disappointed” that the authorities experienced been “conned of thousands and thousands of pesos, which could be used to address sicknesses and quite possibly help you save the life of numerous.”


“The modern uncovering of the huge fraud perpetrated versus the public health insurance coverage process proves that corruption is pervasive,” mentioned Mr. Duterte, who had promised to stop corruption in the 1st six months of his presidency.

He sacked major officials of PhilHealth and appointed Morales, a retired military common, to head the point out insurance company, describing him as “a male of integrity.” The President gave him “marching orders to prioritize ridding the agency of corruption.”

A further SCANDAL Health and fitness personnel protesting fraudulent statements compensated by the Philippine Wellbeing Insurance policy Corp. in this June 19, 2019, photo may possibly yet again be outraged by a achievable new scandal pursuing the resignation of an antifraud officer at the condition insurance company who cited prevalent corruption for quitting. (Photograph by GRIG C. MONTEGRANDE / Philippine Day-to-day Inquirer)

Transform has not come

A 12 months later on, even so, modify has not yet appear to PhilHealth, which is generally tasked to present well being protection for about 100 million Filipinos, a mission that has turn into extra essential amid the COVID-19 pandemic.

Morales did not straight away answer to the Inquirer’s phone calls and text messages to request his comment.

In a person of the stories, the authorities auditors explained lots of products that PhilHealth required to buy had been not provided in its Details Systems Strategic Plan (ISSP) for 2018 to 2020, which the Department of Information and facts and Communications Technological innovation (DICT) experienced already accepted.

The audit commenced in February and lined PhilHealth’s prepared bills for its IT method as reflected in its corporate running price range for this 12 months.

The contents of the report were being introduced to officials of PhilHealth’s Information Technologies Management Division, Physical Resource and Infrastructure Office and Comptrollership Office in a conference at the close of the audit on Could 6.

An Inquirer source, who asked not to be recognized because of to the sensitivity of the subject, claimed the studies were being submitted to Morales and Health Secretary Francisco Duque III, chair of the PhilHealth board.

“The audit produced resulted in the recognized discrepancies and inconsistencies, which could be connected with the gaps and/or weaknesses in the units, guidelines and procedures,” a single of the experiences browse in aspect.

Vision, mission

The govt auditors stated the ICT equipment ended up “important tools in the accomplishment of the corporation’s eyesight, mission and goals.”

“To safeguard the assets of the corporation, it is needed that procurement of the ICT sources should really be managed and properly accounted for,” they stressed. &#13

In their report, PhilHealth’s in-home auditors emphasised the great importance of owning an built-in IT method as it would serve as “the backbone of a seem health and fitness stability software.”

“For quite a few several years now, PhilHealth’s membership, collection and claims databases continue being fragmented even with spending billions [of pesos] for IT hardware and software,” the PhilHealth auditors said.

“This condition clarifies why the syndicate can manipulate PhilHealth’s serious economic standing and several moneymaking techniques, in guise of community company, have been executed of late,” they added.

It did not establish users of the “syndicate,” but a PhilHealth insider experienced told the Inquirer that a “mafia” allegedly composed of senior officers, had been lording it around the point out insurance provider and “ensures that there is no overview of the costs and overpayments” and other “rackets” perpetrated by its customers.

Delayed delivery

In an audit question memorandum dated Jan. 31, a different group of COA auditors described that the winning bidders for the P29-million “production database server” and “online services” of PhilHealth in 2016 experienced unsuccessful to comply with the necessities set by the point out insurance provider.

“The agency demands were being observed to be imprecise. [This] would give the provider an option to deliver items other than what is expected,” said the report signed by supervising auditor Reynaldo Darang.

The COA auditors pointed out that shipping and delivery of the machines was delayed by 118 times and no certification was issued that PhilHealth staff had gained ample schooling in operating the technique.

They explained PhilHealth’s IT unit originally asked for P2.1 billion for the ISSP, but the board turned it down for “failure to deliver particular details” of the new procedure. A correction of “typographical errors” afterwards reduced the spending budget to P1.9 billion, the state auditors said.

“The budget remain unapproved by the board preserve for all over P25 million, which was wanted to renew a line subscription,” PhilHealth’s interior auditors claimed in their report. The report did not define “line membership.”

‘System collapse’

“However, by March 15, 2020, the board was constrained to approve P328 million [for] IT supplemental spending budget usually, they have been informed ‘the overall PhilHealth technique will collapse,’” they extra. &#13

In all, PhilHealth had released P352 million for IT products and services even before the total proposal was authorised by the board.

Past April, PhilHealth senior vice president and chief info officer Jovita Aragona moved for the procurement of P750 million really worth of IT devices.

A couple weeks later on, she once again requested for the launch of another P215 million.

However, PhilHealth’s resident auditors reported users of the board demanded an interior audit report on the present “software and hardware” prior to approving the proposal.

Aragona did not current the interior audit report, arguing that the products in her proposal had been not covered by the evaluate carried out by PhilHealth’s in-home auditors.

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