CEBU, Philippines - The Commission on Audit (COA) has taken notice of a water project in Danao City that reportedly costs millions yet has not materialized.
In her annual audit report for the city’s 2013 operations, Cymbeline Celia Uy said that while the city continues to pay for the interest amounting to P16 million for the Bulk Water Project, the same has not been used reportedly due to “poor monitoring.”
COA said this deprives the city and its constituents of the benefits expected from the project and the “irregular use of government funds.”
In June 2010, the city took on a loan with the Land Bank of the Philippines amounting to P64 million, the first release for the P430-million total loan package.
Wiik & Hoeglund Public Co., Ltd., a Thailand-based company, won the award for the project. COA said the company received the notice to proceed with the project the following year.
The city subsequently issued P62 million to the company, which was equivalent to 15 percent advance payment. The money was reportedly taken from the first tranche of the P64-million loan from LBP.
“However, management has not recouped the advances it granted to the contractor while the city has been paying its loan with LBP,” COA said.
COA said that as of December 2013, Wiik & Hoeglund has not started the project thereby its advances from the city was still at P64 million, while the city has paid the interest and principal amounting to P28 million to LBP.
COA said the transaction is considered “irregular expenditures” as cited in COA Circular Number 2012-003.
A notice of disallowance has been issued for the return of the down payment and city officials have been informed to monitor their projects to maximize the use of public funds and “to avoid wastage of government funds.”
Meanwhile, six infrastructure projects of Danao amounting to P6.9 million which were accepted as 100 percent complete were actually not, COA said, “thereby resulting in the irregular disbursement of government funds.”
COA told the city government to advise the contractor “to act immediately on the deficiencies,” otherwise payments for the projects shall be disallowed.
“We also recommend that management require city engineer to closely monitor infrastructure projects and to refrain from certifying projects which are not yet 100% complete as fully completed to avoid disallowances,” COA said. — (FREEMAN)