REPUBLIC OF THE PHILIPPINES

COMMISSION ON AUDIT
Commonwealth Avenue, Quezon City, Philippines

RESOLUTION No. : 2005-001

Date : February 3, 2005

SUBJECT : Prohibition from Securing Health Care Insurance from Private

Insurance Agencies.

WHEREAS, under existing Civil Service Law, rules and regulations, it is prescribed
that there shall be a health program in the government aimed at improving the working
conditions of the employees;

WHEREAS, such program is provided thru the Philippine Health Insurance

Corporation which is the government arm for insuring the availability of funds to extend
hospitalization and sickness benefits to public officials and employees;

WHEREAS, the government already provides for the health insurance of its
employees by appropriating funds therefor in the General Appropriations Act;

WHEREAS, procurement of another health insurance by government agencies

from private health insurance companies is a disbursement of public funds for the same
purpose and must be viewed as a form of additional allowance and compensation;

WHEREAS, by constitutional mandate, no elective or appointive public officer or

employee shall receive additional, double, or indirect compensation, unless specifically
authorized by law (Section 8, Article IX-B, 1987 Constitution);

WHEREAS, this Commission is constitutionally authorized to promulgate

accounting and auditing rules and regulations for the prevention and disallowance of
irregular, unnecessary, excessive, extravagant or unconscionable expenditures, or uses
of government funds;

NOW, THEREFORE, BE IT RESOLVED as it is, hereby RESOLVED, that the

procurement of private health insurance by any agency or instrumentality of the
government is an irregular expenditure and constitutes unnecessary use of public funds
which cannot be countenanced by this Commission;

BE IT FURTHER RESOLVED that violation of this Resolution shall cause the

disallowance of the corressponding disbursement of funds and the heads of the
agencies or instrumentalities involved including government owned and/or controlled
corporations and those officials participating therein shall be held personally liable
therefor.

This Resolution takes effect immediately.

Quezon City, February 3, 2005.