Deviant Billing Methods and Premature Testing in DEOs
Department of Public Works and Highways · 2024
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What Happened?
Category: Financial ManagementIssue: Non-complianceSome district engineering offices are charging flat rates per project instead of billing each test separately, and they run tests before getting paid. This breaks the rules and leads to lost income for the government.
Why It Matters
Recommended Actions
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Original Audit Finding Excerpt
"38.10 DEOs in Regions I, II, V, IX , and XII have adopted billing methods that deviate from the guidelines set under the DPWH DO No. 32, s. 2017. Instead of billing per individual testing service, these DEOs apply lump -sum charges per project. Compounding this issue is the widespread practice of performing material tests before assessing and collecting fees contrary to the revenue recognition principles in the GAM for NGAs. 38.11 This sequence of actions delays revenue realization and causes inconsistencies between project and actual collections. For instance, the Isabel 2 nd and Nueva Vizcaya 2nd DEOs did not collect P278,110.00 and P2,033,110.00, respectively, in potential income."