Fund recovers $228K in overpaid, underpaid benefits

NMI Retirement Fund internal auditor Rima Yamagishi reported yesterday that the agency successfully collected $228,000 from its members who received overpayments and underpayments of benefits from February 2010 to February 2012.

She revealed that $433,000 more could be potentially recouped by the cash-strapped agency once the internal desk audit is completed.

Board trustee chair Sixto K. Igisomar said that since the internal audit began more than a year ago, it has helped boost the Fund’s revenue collection following the discovery of improper payouts and refunds to members and beneficiaries.

With only two members on the auditing team, he instructed the possible hiring of additional personnel to expedite the review of all necessary files and documents and boost the recovery of funds.

On top of the collection for underpayment and overpayment of benefits, some $78,000 was also recouped from the single audits conducted by the team in other areas, said Yamagishi.

One of the biggest potential recoveries she cited was the audit for overtime computation on employees where the team had already completed phase 1.

“We determined that if pensions [of affected employees are] adjusted, it will yield an annual cash flow saving of $300,000 for the Fund,” she told the board, recommending that since the amounts involved in this area are “big,” a collection agency may be tapped to do the work for the agency.

Yamagishi said that 120 overtime computation files have been reviewed and more are up for review, which will take time. She revealed that the team initially came across over a thousand files in its initial assessment.

Yamigishi disclosed findings of two individuals who refunded their contributions but did not separate from government service, a violation of the law that requires 60-day separation from government.

She said the Fund had advised these persons to return the refunds they got. One of the two was reportedly ordered to repay $19,944.

Igisomar instructed Fund administrator Richard Villagomez to give these persons a deadline to meet the one-time lump sum repayment.

According to Villagomez, the Fund has no other way of knowing if a member who refunded their contributions is still in government service other than to check if they continue to pay their employee contributions.

According to Yamagishi, “we started to see scenarios where we completed the separation but there is a new contract the following day. So there’s really no separation.”

The auditor also discovered that there are some surviving children with disabilities who are receiving annuity beyond the age set by regulation. Of the 14 files reviewed so far, one was found improperly receiving this benefit. As single and group audits are ongoing, additional cases and potential recoveries are expected.