The Commission on Audit (COA) has called out the Department of Public Works and Highways (DPWH) for failing to recover ₱783,529,617.36 in advance payments made to contractors. These payments were for 353 infrastructure projects, including completed, terminated, or pending termination contracts.
COA warned that this practice violates government regulations under RA No. 9184 and puts public funds at risk. The problem lies in the DPWH’s failure to deduct the required 15% from contractor payments until the advances are fully repaid.
Among their key findings are as follows: ₱388 million for 253 completed projects, ₱351.7 million for 94 terminated projects, and ₱43.7 million for six projects awaiting termination.
COA also pointed out issues such as not forfeiting advance payment bonds, poor monitoring, delays in processing claims, and incomplete accounting records.
These unrecovered funds mean less money is available for other important projects.
COA urged the DPWH to demand repayment from contractors or forfeit their posted bonds, take legal action against contractors who refuse to repay, improve monitoring systems and ensure timely deductions from contractor billings, enforce contract provisions to recover advances from other ongoing projects with the same contractors, and recommend imposing sanctions on staff who failed to follow recovery processes.
The DPWH said it addresses the issue by sending demand letters to contractors, working with regional offices to enforce collections, and pursuing legal actions.
Despite these efforts, COA stressed the need for stricter compliance and stronger measures to prevent further financial losses.