THE Commission on Audit (COA) has urged the Department of Public Works and Highways (DPWH) to take legal steps to collect P682 million in unrecouped advances to contractors.
In a 2020 report on the DPWH, the COA recommended that the agency send out demand letter for immediate refund and to initiate legal actions against contractors who refuse to comply.
Likewise, the COA said the DPWH should consider deducting the unrefunded amount from the contractors’ unpaid claims in other projects.
It also pushed for the imposition of administrative sanctions against DPWH personnel who failed to deduct collectible amounts against the contractors’ progress billings or surety bonds.
Republic Act 9184 or the Government Procurement Reform Act authorized the payment of advances to contractors subject to the submission of an irrevocable letter of credit of equivalent value from a commercial bank or a bank guarantee.
Repayment of the advance was supposed to be collected by 15 percent deductions on the progress billings.
However, the audit team noted that as of December 31, 2020, unrecouped balances on advance payments have amounted to P681.952 million involving 414 infrastructure projects that were already completed, rescinded, or terminated.
In its comment, the concerned DPWH said one of the reasons for non-recovery of the advance payments made to contractors was the late submission of final billings by the construction firms even if the agency regional and district offices have not been remiss in sending out written and verbal requests.
For the rescinded or terminated contracts, the agency failed to forfeit the surety bonds of contractors because there is no committee or DPWH official designated for this function.
The COA warned the DPWH that non-collection of the advances will result in loss of resources on the part of the government hence may be issued notices of disallowance.
The DPWH-Office of the Secretary said it has already collected P20.448 million for the contractor of the Surigao-Davao Coastal Road preventive maintenance project as of January 2021 while refund of another advance worth P478,776.97 is also being processed.
