Amid allegations that lawmakers connived with the Department of Public Works and Highways (DPWH) in projects with irregularities, the Commission on Audit (COA) said in a report that the agency lost some P1.331 billion in government funds because it failed to recover advance payments for completed, rescinded or terminated projects.
The COA released the audit report after Presidential Anti-Corruption Commission (PACC) Commissioner Greco Belgica accused some lawmakers of “bullying” DPWH district officials over the implementation of local projects and the movement of district engineers.
“You know there are 250 districts, so each one talks to a congressman. It’s not centralized, so there are problems in monitoring,” Belgica said in an interview on Oct. 22.
But Belgica did not identify the lawmakers allegedly conniving with DPWH officials, prompting Anakalusugan Rep. Mike Defensor, House public accounts committee chair, to demand that Belgica name names as it was unfair to drag the House through blanket accusations.
Defensor said he was open to have his committee to investigate the allegation, but said a third-party probe might be more appropriate because the accusation involves congressmen.
Two days after Belgica made his accusation, the COA reported another irregularity in the DPWH, which President Duterte himself admitted to having a “grave” issue with corruption.
Advance payments
The COA said the DPWH failed to recover from contractors advance payments and penalties that amounted to P1,330,740,655.06 for 551 infrastructure projects in 2019 that were already completed, rescinded or terminated.
The COA audit showed that 530 were completed projects with advance payments worth P1.15 billion, while 21 were rescinded or terminated projects with advance payments worth P177.26 million.
The DPWH Region 9 office had the highest sum of unrecovered advances to contractors for 81 completed projects at P330.34 million, while the Laguna 1st District Engineering Office had the highest unrecouped advances for seven rescinded or terminated projects at P41.13 million.
The COA noted that “one of the reasons for the nonrecoupment of advance payments made to contractors was the late/nonsubmission of final billings with the corresponding required documents by the concerned contractors, despite written/verbal requests” from the DPWH.
State auditors made the same observation in 2018, but the DPWH did not act on the matter.
The COA also found out that there were P14.37 million in unrecouped balances which were outstanding for more than 10 years already.
The DPWH cited difficulty retrieving documents or records to establish the account balance’s accuracy and validity since there was no proper turnover of documents from past and present accounting employees.
Unrecovered advances
Aside from demanding the immediate refund of unrecovered advances, the COA recommended the forfeiture of the letters of credit or guarantee payment bonds of the contractors, or to deduct the amount from any unpaid claims and other projects undertaken by the same contractors.
In response, the flagged offices said they would comply with the recommendations, and that they were trying to send demand letters and notices for contractors to refund the appropriate sums.
In addition, the COA also called out the DPWH for 461 infrastructure projects which were discovered to have technical defects and deficiencies worth P376.138 million.
Most of the flagged projects were for the construction of school buildings, classrooms and multipurpose buildings, as well as flood-control projects, road widening and upgrading, and construction, maintenance or improvement of bridges.
State auditors warned that a notice of suspension/notice of disallowance/notice of charge will be issued by the COA if corrections or rectifications are not made.
The COA also recommended that the DPWH “consider blacklisting the concerned contractors who refuse to [implement] the necessary corrections.”