Delay or Non-Imposition of Liquidated Damages
National Housing Authority · 2023
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What Happened?
Category: Financial ManagementIssue: Non-complianceMany housing projects were finished late, but the agency did not charge the contractors the penalty fees for being late, so the government lost money.
Why It Matters
Recommended Actions
- Ensure diligent supervision of project completion timelines by contractors though continuous communication with the Central Office and Regional and District Offices and strengthening the relevant internal controls;
Original Audit Finding Excerpt
"Examination of the status and implementation of projects funded by the Calamity Funds as at December 31, 2023, disclosed that a minimum of 50 housing projects, amounting to at least P10.787 billion, had incurred delays ranging from 35 to 2,367 days beyond their target completion dates, as follows: Table 14.1 – Delayed Implementation of Projects under Calamity Funds As shown in the table, a total of 50 projects funded by calamity funds were terminated for an extended duration and were not charged with any liquidated damages from payments owed, or potentially owed, to the contractor under the contract, as outlined in Paragraph 9, Annex “E” of the RIRR of RA No. 9184."