Construction and Monitoring Issues in Calamity Victim Projects with Inactive Performance Bonds
National Housing Authority · 2024
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What Happened?
Category: Contract ManagementIssue: Non-complianceHousing projects for calamity victims in the Bicol Region that were officially suspended were still under construction, creating unreliable reports and questionable progress payments. Additionally, expired or inactive performance bonds left the agency unprotected against project defaults or terminations, violating procurement rules.
Why It Matters
Recommended Actions
- Immediately evaluate the status of all resettlement projects currently under prolonged suspension, particularly the Virac and Malilipot Resettlement Project Phase
- A formal directive must be issued either approving the continuation of the projects, with revised timelines and funding schedules, or officially terminating the contracts, if resumption is no longer feasible, to allow for proper closure and liquidation of obligations
Original Audit Finding Excerpt
"Despite being classified as suspended in the RPPPAs, several projects for calamity victims in the Bicol Region continue to be under construction, prompting concerns regarding the veracity of management's reports and the validity of progress payments in acc ordance with NHA Memorandum dated August 21, 2024. Moreover, inactive or expired performance bonds expose the Authority to risks and violate the RIRR of RA No. 9184."