Improper handling of retention money and warranty securities
Department of Public Works and Highways · 2023
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What Happened?
Category: Financial ManagementIssue: Non-complianceThe agency kept some contractor deposits that should have been returned, and also gave back other retention money too early, before projects were properly finished, violating procurement rules.
Why It Matters
Recommended Actions
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Original Audit Finding Excerpt
"Retention money, warranty securities, and excavation/restoration deposits totaling P67,510,480.26 collected and retained by DPWH Offices as guaranty security/deposits were unreleased or unclaimed by the contractors despite the lapse of the warranty period and/or completion of its intended purpose, contrary to item 6, Annex “E” and Section 62.1 of the Revised IRR of RA No. 9184. On the other hand, retention money aggregating P1,360,849,819.89 pertaining to 182 infrastructure projects were released to contractors prior to the completion and/or final acceptance of the projects that were not implemented/completed on schedule or satisfactorily undertaken contrary to item 6, Annex “E” of the same Revised IRR."