Non-imposition and incorrect computation of liquidated damages
National Housing Authority · 2023
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What Happened?
Category: Financial ManagementIssue: Non-complianceThe agency failed to charge contractors for delays as required by rules, and also made errors in calculating the charges, which could cost the government 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
"Liquidated damages (LD) were not applied, recovered, or deducted from the payments to contractors who incurred delays ranging from 35 to 2,367 days, with a total contract value of P10.787 billion, contrary to Item 9, Annex “E” of the RIRR of RA No. 9184. Additionally, LD amounting to P208.578 million was incorrectly imposed due to computation inconsistent with the provisions of the RIRR."