Improper Application and Computation of Liquidated Damages
National Housing Authority · 2024
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What Happened?
Category: Financial ManagementIssue: Non-complianceThe agency did not charge contractors for delays as required, and when it did, the amounts were often wrong.
Why It Matters
Recommended Actions
- Reassess the computation of LD for the delays incurred by the concerned contractors to ensure compliance with the prescribed provisions of the RIRR and verify that the correct amounts are collected from their claims
- And
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."