Negative Fund Balance and Allotment Overdraft Due to Premature Contract Execution
National Housing Authority · 2024
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What Happened?
Category: Financial ManagementIssue: Non-complianceThe agency spent money it did not have yet. It signed contracts and made promises before the funds were actually received, leading to a negative balance of over P3 billion and a deficit of over P19 billion.
Why It Matters
Recommended Actions
No recommendations are available for this finding yet.
Original Audit Finding Excerpt
"The Authority entered into various housing contracts/utilized funds for the following projects prior to the release of NCA from the DBM, contrary to Section 5.6 of DBM CL No. 2010-9 dated December 30, 2010, which prohibits incurring obligations without the corresponding allotment, and EO No. 292, s.1987, which mandates that no contract involving the expenditure of public funds shall be entered into unless funds have been duly appropriated, thereby incurring a negative fund balance totaling P3.155 billion."