NHA spent P48.9 million on a failed joint venture. The partner backed out, but NHA waited years and did not take legal action or sell/lease the equipment, so the assets deteriorated and the money was not recovered. Management now plans to appraise and dispose of the equipment, but needs to act quickly and hold responsible officials accountable.

Why It Matters

Recommended Actions

• Identify the responsible officers/employees and hold them liable for the loss or wastage of public funds, the lack of maintenance, oversight to claim insurance, and accountability for the missing parts and items

Original Audit Finding Excerpt

"Based on a review of the latest AAPSI, the NHA neither filed a case against the Co-Venturer nor undertook substantial efforts to recover its P48.933 million investment in the terminated joint venture. Despite OGCC’s 2006 recommendation, the NHA delayed or neglected to pursue legal action against the Co-Venturer, potentially allowing the statute of limitations to lapse and severely limiting avenues for legal recourse. Moreover, the NHA was not able to enforce the safeguard provisions of the agreement, such as the forfeiture of the Performance Bond and the proper disposal of joint venture assets. Valuable machinery and equipment deteriorated without being utilized or disposed of, representing missed opportunities to recover public funds."

Source Document