Agent delays OFWs’ SSS contributions worth P151-M up to 189 days – COA

MANILA, Philippines – The Commission on Audit (COA) has urged the Social Security System (SSS) to take legal action against a collecting agent (CA) for delaying, up to 189 days, the remittance of collections from overseas Filipino workers (OFWs) worth P151.54 million.

The P151.54 million accounts for 96.91% of the delayed collections. The remaining 3.09% of the total P156.37 million represented loan repayments by members.

“Examination of the RRs (Remittance Reports) and SCDRs (Summary of Collections and Deposits Reports) of the CA covering its remittances from June to December 2023, disclosed delayed remittances ranging from 1 to 189 days, totaling P156.366 million. Further verification showed that P151.541 million or 96.91% of the total delayed remittances as at December 31, 2023, pertains to contributions of overseas Filipino workers,” the COA wrote in its report released December 1, 2024.

The COA did not identify the collecting agent.

State auditors questioned why the SSS failed to impose a suspension against the collecting agent even if, according to the Remittance Transfer Agreement, the agent was supposed to turn over the consolidated collections to the SSS designated bank account within two banking days.

Audit rules required the agent to transmit the daily RR and Collection File through the SSS Secure File Transfer Protocol facility, and submit a monthly SCDR.

The severe delays occurred even as the SSS tapped the company to expedite the collection process through electronic collection.

Notified in 2023

In June 2023, the SSS Cash Management Department had notified the CA about its failure to submit Remittance Reports.

The company cited “system upgrades and integration testing” as reasons for the delay. But after a series of meetings with SSS officials, the CA eventually admitted responsibility for the penalties resulting from delays on their end.

Based on state auditors’ records, just P78.227 million was remitted as of December 31, 2023. The SSS received the balance of P73.314 million in the first quarter of 2024.

Over 4.8 million member loan accounts were affected.

In January 2024, the Treasury Division (TD) advised the agent to immediately deposit the US dollar equivalent of the undeposited collections as of December 31, 2023.

In its reply to the division, the agent requested to settle the outstanding 2023 collections on staggered dates. However, the investments sector rejected this request, and said failure to settle would result in suspension of collection activities.

The agent was then suspended from collecting SSS payments from January 24.

The following month, the SSS issued a memorandum for the termination of its agreement with the agent. Still, the COA said the state insurer took too long to act despite the agent’s violations.

“It is necessary to emphasize that SSS suspended the CA on January 24, 2024, which is 232 days after the first instance of delay in the remittance of collections in June 2023. Additionally, TD did not send the initial demand letter until January 11, 2024,” the COA said.

The COA also flagged why the 3% penalty was based only on P14.8 million instead of the entire amount of P156.36 million. The penalty imposed came out as just P1.45 million, a long way from the COA’s computation of P16.93 million.

“We recommended that Management, through CLSD (Corporate Legal Services Division), enforce appropriate legal actions on recovery of any unremitted collections and associated penalties from the concerned CA,” the COA said.

The SSS has said its CLSD sent the final demand letter to the CA dated February 15, 2024, to settle the total obligation amounting to $8.175 million, which did not include the 3%-penalty. – Rappler.com