Allotment Overdraft Due to Contracts Without Sufficient Funds
National Housing Authority · 2023
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What Happened?
Category: Financial ManagementIssue: Non-complianceThe agency signed contracts even though it did not have the money to pay for them, leading to a budget overspend of over 18 billion pesos, which is against government rules.
Why It Matters
Recommended Actions
- Ensure that all contracts to be awarded to contractors for the proposed housing projects have sufficient funds, pursuant to Item 5.7 of DBM Circular No. 2010-9 dated December 30, 2010, by requiring Certificate of Budget Allocation prior to the awarding of contracts.
Original Audit Finding Excerpt
"The Authority entered into various contracts pending the release of funds from the National Government, resulting in allotment overdraft amounting to P18.163 billion, contrary to the related provisions of DBM Circular No. 2010-9 dated December 30, 2010 and EO No. 292, s.1987 or the Administrative Code of the Philippines."