[Bawal Yan!] — Uninsured Properties under the GSIS

State auditors caution that in the absence of sufficient insurance coverage, there would be no compensation available for the government in case its assets were lost or damaged due to accidents or disasters.

The Audit Findings

The Commission on Audit (COA) discovered that properties valued at P2.58 billion in a local government unit (LGU) in Isabela are lacking coverage under GSIS insurance in violation of Republic Act No. 656 or the Property Insurance Law, which requires LGUs concerned to have their properties insured.

The said law provides that:

Every government, except a municipal government below first class, is hereby required to insure its properties, with the Fund against any insurable risk herein provided and pay the premiums thereon, [xxx] Provided, further, That such property or part thereof as may not be insurable or acceptable for insurance may be insured with any private insurance company. A municipal government below first class may upon application insure its properties in the Fund under such rules and regulations as the System may prescribe.

Section 5, RA No. 656

The COA cautioned that in the absence of sufficient insurance coverage, there would be no compensation available if any of the LGU’s assets were lost or damaged due to accidents or calamities.

“This insurance covered only some of the motor vehicles, equipment and other properties owned by the City. Review of the Financial Statements and other pertinent reports as of December 31, 2023 showed that several PPE items with total book value of P2,577,898,273.63 were not covered by insurance,” state auditors said.

State auditors suggested that the Inventory Committee of the LGU work with the Property Officer to finalize the LGU’s Property Inventory Form.

In response, the LGU’s General Services Office informed the auditors that it is currently completing the list of insurable properties for coverage under the Government Service Insurance System (GSIS) General Insurance Fund.

Source: Rappler