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Malampaya Funds
National Housing Authority
Special Audits Office Report No. 2015-04
Sectoral Performance Audit
National Housing
Authority
Republic of the Philippines
Commission on Audit
Special Services Sector
SPECIAL AUDITS OFFICE
Commonwealth Avenue, Quezon City Philippines Tel. No.: (+632) 931-7455 / Telefax No.: (+632) 931-9235
December 15, 2015
Atty. SINFOROSO R. PAGUNSAN
General Manager
National Housing Authority
Elliptical Road, Diliman
Quezon City
Sir:
We are pleased to transmit the report on the sectoral performance audit of
Malampaya Funds released by the Department of Budget and Management to the
National Housing Authority (NHA) covered by four Special Allotment Release Orders
dated November 19, 2009 and December 29, 2009 in the total amount of P1.399
Billion.
The audit was conducted pursuant to COA Office Order No. 2011-715 dated
October 12, 2011 and subsequent issuances to assess the effectiveness of NHA’s
program implementation and propriety of utilization of funds taking into consideration
the contracts, Terms of Reference, and applicable laws, rules and regulations. The
draft report containing the results of audit was forwarded to that Office for comments
on August 26 , 2014. The comments received on November 10, 2014, were evaluated
and incorporated in the report, where appropriate. This report will form part of the
Overall Report on the Sectoral Performance Audit of Malampaya Funds covering
releases to a number of government agencies.
We look forward to the implementation of the audit recommendations
contained therein and would appreciate being informed of the actions taken thereon
within one month from receipt hereof.
We acknowledge the cooperation and assistance extended to the Team by the
officials and employees of the NHA.
Very truly yours,
By Authority of the Chairperson:
Director IV
TABLE OF CONTENTS
Title Page
List of Tables
Part I Executive Summary 1
Introduction 2
Audit Objective 3
Audit Scope and Methodology 3
Audit Conclusion 5
Management’s Comments 5
Team’s Rejoinder 6
Recommendations 6
Part II The Funded Programs 8
Community Initiative Approach Program (CIAP) and Balik-
Probinsya Program 9 - 19
Part III Audit Observations 20
Chapter I - CIAP 21
- On fund utilization and the purpose of providing
permanent residence to qualified beneficiaries not
fully achieved 22
- On projects not totally compliant with the
contract 28
Chapter II - Balik Probinsiya Program 32
- On non-attainment of the number of targeted
family-beneficiaries and expected benefits from
the program not maximized 33
- On funds received for the Program all drawn as
cash advances
Part IV Recommendations 37
LIST OF TABLES
Table
No. Title Page
1 Program Process 10
2 Schedule of Special Allotment Release Orders (SAROs) Released 11
3 Schedule of Notices of Cash Allocations (NCAs) Released 11
4 Purposes of Fund Utilization 11
5 Breakdown of Loans Granted to Qualified Relocatees 12
6 Schedule of Amortization Payments 12
7 Schedule of Implemented Projects 12
8 Schedule of Payments to Developers/Constructors 13
9 Obligations of the Parties to the MOA 13
10 Schedule of Constructed Units and Developed Lots
by Constructors/Developers
18
11 Schedule of Payments to Contractors 19
12 Schedule of Distribution of Developed Lots and Housing Units 20
13 Status of Occupancy 21
14 Samples of Housing Units Used for Other Purposes 22
15 Schedule of Cash Advances Granted to Disbursing Officer 30
16 Schedule of Beneficiaries of Balik-Probinsya Program 31
1
Part I
Executive Summary
EXECUTIVE SUMMARY
2
The policy of the State to hasten the discovery and production of indigenous
petroleum through the utilization of government and/or private resources, local and
foreign was categorically declared under Presidential Decree (PD) No. 87,
otherwise known as “The Oil Exploration and Development Act of 1972,” as
amended. To achieve this objective, embodied in the Act are contractual
arrangements calculated to yield the maximum benefit to the Filipino people and
revenues to the Philippine Government, and at the same time assure just returns to
participating private enterprises, particularly those that will provide the necessary
services, financing, technology and assume in full all exploration risks. The
government may directly undertake exploration and production of indigenous
petroleum or may indirectly undertake the same under service contracts.
For this purpose, the Petroleum Board was created but later abolished under PD 910
promulgated on March 22, 1976 and its powers and functions were transferred to
the Energy Development Board (EDB). Under PD 910, all fees, revenues and
receipts of the EDB from any and all sources including receipts from service
contracts and agreements, all money collected from concessionaires as well as
government share representing royalties, rentals, production share on service
contracts and similar payments, shall form part of a Special Fund to be used to
finance energy resource development and exploration programs and projects of the
government and for such other purposes as may be thereafter directed by the
President. The use of special fund for such other purposes was clarified by the
Supreme Court in GR. No. 208566 promulgated on November 19, 2013 to mean
that “such other purposes refer only to other purposes related to energy resource
development and exploitation programs and projects of the government.” It was,
however, stressed therein that the Court’s pronouncement must be applied
prospectively in view of the operative fact doctrine.
On December 11, 1990, a Service Contract (SC), known as SC 38, and
Memorandum of Clarification were entered into by the government, represented by
then President Corazon C. Aquino, as the first party, with Occidental Philippines,
Inc. and Shell Exploration B.V. as the second party or Contractor, to undertake and
execute petroleum operations under the full control and supervision of the Office of
Energy Affairs (OEA), now Department of Energy (DOE). As reflected in the
Provisional Implementation Agreement entered into by the Department of Budget
and Management (DBM), DOE and Department of Finance (DOF) as the National
Government Agencies (NGAs), with the Province of Palawan on July 25, 2007, the
SC covered the Camago-Malampaya Reservoir, among others, which is referred to
as the “Natural Gas Project.”
INTRODUCTION
EXECUTIVE SUMMARY
3
The SC provides that the DOE shall be entitled to receive in kind, petroleum equal
in value to 60 percent of net proceeds, while the Contractor will retain an amount
equal to its fee of 40 percent of the net proceeds from the Petroleum Operations. In
each year, Contractor will recover from the gross proceeds resulting from the sale of
all petroleum produced under the SC an amount equal to all operating expenses;
provided, that the amount so recovered shall not exceed 70 percent of the gross
proceeds from production in any year. Provided further, that if in any year, the
operating costs exceed 70 percent of the gross proceeds from the production, or
there are no gross proceeds, then the unrecovered expenses shall be recovered from
the gross proceeds of succeeding year.
Based on the records of the DOE, for the period January 1, 2002 to June 30, 2013,
the Contractor remitted to the government a total of P173.280 Billion as share from
the net proceeds from petroleum operations. These receipts are accounted for as
Malampaya Funds. Of the total receipts, P38.830 Billion had been released to
various NGAs and Government-Owned and Controlled Corporations (GOCCs),
including the National Housing Authority (NHA) for the implementation of various
programs and projects.
Releases by the DBM to NHA were covered by four Special Allotment Release
Orders (SAROs), dated November 19 and December 29,2009 in the total amount of
P1.399 Billion for the implementation of two projects, the Community Initiative
Approach Program (CIAP) with allocation of P1.392 Billion and the Balik-
Probinsya Program with an allocation of P6.900 Million.
The audit was conducted to assess the effectiveness of NHA’s program
implementation and propriety of utilization of funds, taking into consideration the
contracts, Terms of Reference, and applicable laws, rules and regulations.
Scope
The sectoral performance audit of Malampaya Funds covered collection, allocation
and utilization of releases to a number of implementing agencies (IAs). However,
this Report covered only the results of audit of P1.399 Billion fund released to the
NHA. The results of audit discussed in this Report will be incorporated in the
AUDIT OBJECTIVE
AUDIT SCOPE AND METHODOLOGY
EXECUTIVE SUMMARY
4
Overall Report on the Sectoral Performance Audit of Malampaya Funds covering a
number of government agencies.
Methodology
To achieve the audit objectives, the Team performed the following audit techniques,
among others:
- Obtained copies of and studied relevant laws, rules, regulations,
policies, procedures, and guidelines pertinent to the utilization of funds
and implementation of the programs;
- Gathered and analyzed Memoranda of Agreement (MOA), contracts
(such as Loan Agreements) and Terms of Reference (TOR);
- Obtained and reviewed documents on related transactions and assessed
whether funds were used for the purpose intended and disbursed in
accordance with existing laws, rules and regulations;
- Interviewed selected beneficiaries to confirm receipt of benefits from
NHA, either in the form of developed lots or housing units under the
CIAP, or financial assistance under the Balik-Probinsya Program;
- Inspected/validated the physical existence and condition of the sampled
developed lots and constructed housing units;
- Confirmed with the Philippine Contractors Accreditation Board
(PCAB) as to issuance of license to contractors; and
- Analyzed and evaluated all documents and information gathered to
assess the effectiveness of the implementation of the programs.
The Audit Team
The sectoral performance audit of Malampaya Funds is being conducted by a Team
composed of 24 Members from the Special Audits Office (SAO), Special Services
Sector (SSS) and 4 Members from the Technical Services Office (TSO), Systems
and Technical Services Sector (STSS), Commission on Audit (COA), pursuant to
COA Office Order No. 2011-715 dated October 12, 2011 and subsequent issuances.
Of the 28 personnel, 5 were involved in the Audit of the NHA which was conducted
simultaneously with the audit of other agencies implementing projects out of
Malampaya Funds. The sectoral performance audit started in November 2011 and
is still on-going, with the audit of the NHA as one of those already completed.
EXECUTIVE SUMMARY
5
The intended purpose under the CIAP of providing permanent residence or
relocation to qualified beneficiaries by constructing housing units or developing
lots was not fully realized. Of the 1,037 sampled housing units within the ten (10)
resettlement sites inspected by the Team, only 788, representing 75.99 percent,
were still being occupied by the original beneficiaries. The rest were either already
sold or being rented to others, or remained unused, or only used occasionally which
is not in accordance with the conditions set forth under the agreement between the
NHA and beneficiaries.
A number of units as accepted from the constructors/developers, were not totally
compliant with the requirements under the contract with one of the
constructors/developers found to be not registered with PCAB.
On the other hand, out of the 300 families that were selected to receive financial
assistance under the Balik-Probinsya Program (BPP), only 169 families or 56.33
percent actually availed of the assistance due to failure of the others to comply with
the requirements, leaving the fund balance of P3.013 Million unutilized.
Moreover, the amount of P6.90 Million allocated for the BPP was all drawn as cash
advances covered by 13 checks on August 2 and 3, 2010 without first determining
the needs. Of the total cash advances, only P2.438 Million was used from August
to November 5, 2010, while the balance of P4.462 Million was returned on
November 15, 2010.
The Audit Highlights summarizing the deficiencies noted during the Audit were
forwarded to the General Manager on August 26, 2014. Their comments, requested
to be submitted not later than September 8, 2014, which was extended until
November 7, 2014, were received by the Office on November 10, 2014.
Management claimed that immediate repairs/corrective works have been undertaken
by Goldenville Realty Development Corporation for its project in Blk. 13, Phase 5
of Towerville Resettlement Project with supporting photos to prove the claim. In
addition, the Project Offices under the supervision of Southern Luzon & Bicol
Management (SLB-AMO) committed to perform the following courses of action to
comply with the Team’s recommendations:
AUDIT CONCLUSION
MANAGEMENT’S COMMENTS
EXECUTIVE SUMMARY
6
a. Requiring all developers to strictly follow the provisions of the MOA;
b. Conducting regular occupancy check of the relocated families and to
religiously send notices to the awardees for their monthly obligations to the
NHA;
c. Advising all developers to undertake repair works, if necessary, and
directing all beneficiaries to report to the NHA all defects and to submit
punch list of all the fixture of the housing units as per plans and
specifications; and
d. Conducting regular meetings with all the beneficiaries/awardees for any
management update and concerns
a
The Audit Team appreciates the immediate action taken by the NHA and its
commitment to take appropriate action to ensure the attainment of objectives.
Immediate actions should also be undertaken in other projects.
The proposed actions, may, however, not be sufficient to ensure that the NHA’s
mandate is fully served. The selection process should be enhanced to assure that
only qualified beneficiaries are awarded units. Compliance by the relocatees with
the MOA should be also strictly enforced, and monitoring mechanism should be
strengthened.
In view of the deficiencies noted in the implementation of projects, the Team
recommends the following courses of action:
Ensure that the projects are fully compliant with the MOA and Terms of
Reference before acceptance and payment. In no case should a contractor
be fully paid unless the obligations under the MOA and plans and
specifications are strictly complied with;
Require the Constructors/Developers to undertake repairs/corrective
measures on the noted deficiencies and to attend to water and power
connections;
RECOMMENDATIONS
TEAM’S REJOINDER
EXECUTIVE SUMMARY
7
Ensure that Constructors/Developers are eligible before entering into
tripartite MOA with them and the Community Association for financing of
the acquisition of developed lots and completed housing units by eligible
beneficiaries.;
Strengthen monitoring of compliance by the relocatees/awardees with the
provisions of the Loan Agreement. Enforce the cancellation of award to the
original lot allocatee/awardee in the event of non-compliance with the terms
and conditions under the Loan Agreement;
Refrain from granting successive cash advances to any disbursing officer
without liquidation of prior cash advances as this practice is not in
consonance with COA Circular No.97-002 as reiterated under COA
Circular No. 2009-002; and
Return unused/unutilized Malampaya Fund to the Bureau of Treasury.
8
Part II
The Community Initiative Approach Program
(CIAP) and Balik-Probinsya Program
CIAP AND BALIK-PROBINSYA PROGRAM
9
NHA is a government-owned and controlled corporation in charge of providing
housing assistance to the lowest 30 percent of urban population through slum
upgrading, squatter relocation, development of sites and services, and construction
of core housing units.
Under Republic Act (RA) No. 7835, otherwise known as the Comprehensive and
Integrated Shelter Financing Act (CISFA), NHA is mandated to implement the
components of the National Shelter Program, such as resettlement, construction of
medium-rise public and private housing, cost recoverable program and local
housing.
To pursue its mandate, one of the programs adopted by the NHA is the
implementation of the Community Initiative Approach Program (CIAP). This
program is intended for informal settler families qualified to be relocated and to
acquire housing units (developed lots/house and lot package) in resettlement sites of
their choice, to be developed by a contractor, also of their choice. In other words,
the program is intended to provide permanent residence or relocation to qualified
beneficiaries by constructing housing units or developing lots. Qualified families
are those included in the following category:
affected by calamities, such as massive flooding, typhoons, volcanic
eruption and those living along danger zones, waterways, rivers,
shorelines, esteros, creeks and the like;
who do not own any real property; and
who are not yet awardees of any Government Housing Program.
CIAP
The CIAP process is presented in Table I in the next page.
INTRODUCTION
CIAP AND BALIK-PROBINSYA PROGRAM
10
Table 1: Process-Community Initiative Approach Program
Developer/Constructor offers its services to the Community Association (CA).
CA conducts site inspection together with the NHA representative. If CA approves the location as permanent relocation site of its affected families/members, CA informs Developer/ Constructor to coordinate with NHA.
CA enters into Contract Agreement with the Developer/Constructor where:
Developer/Constructor shall finance the full development of service lots and completed housing units;
Individual members/awardees of the CA shall acquire through the NHA’s financing, the service lots and completed housing units offered by the Developer/Constructor.
NHA and awardee of developed lots and housing units enter
into Conditional Contract to Sell and Loan Agreement.
NHA, Developer/Constructor and CA enter into tripartite agreement (MOA) in case developer/contractor is eligible and compliant with the TOR, for financing the acquisition of developed lots and completed housing units by the awardee/eligible beneficiaries.
The NHA evaluates Contract Agreement taking into consideration compliance with the Terms of Reference (TOR) on the Relocation Program for Families affected by
Calamities and those living in danger areas.
CIAP AND BALIK-PROBINSYA PROGRAM
11
To cover the funding requirements, then Chairman of Housing and Urban
Development Coordinating Council (HUDCC), requested for release of fund from
the Calamity Fund. The DBM granted the request but the funds released was
charged against Malampaya Funds covered by the following Special Allotment
Release Orders (SAROs):
Table 2: Schedule of Special Allotment Release Orders (SAROs) Released
SARO No. Date Amount Purpose
F-09-08388 11/19/2009 P 481,600,000 For relocation of families affected by the recent typhoons (Priority 1- 1,661 units in existing resettlement sites)
F-09-08389 11/19/2009 810,360,000 For relocation of families affected by the recent typhoons (Priority 2- 6,484 units being developed in Rodriguez & Calauan)
F-09-08416 11/19/2009 6,900,000 For relief operations, rehabilitation, reconstruction and other works and services to areas affected by natural calamities
F-09-09527 12/29/2009 100,000,000 For relocation of families affected by the recent typhoons (Priority 3- Pinugay Housing Project, Baras, Rizal)
Total P 1,398,860,000
The funding requirements were covered by the following Notices of Cash
Allocations (NCAs):
Table 3: Schedule of Notices of Cash Allocations (NCAs) Released
NCA No. Date Amount
253068-4 November 19, 2009 P 6,900,000
253116-3 December 29, 2009 100,000,000
253085-0 March 3, 2010 1,291,960,000
Total P 1,398,860,000
The said amount was recorded in the books of the NHA as “Subsidy Income from
the National Government”. As reflected in the Statement of Comprehensive
Income for Calendar Year (CY) 2010, the fund was fully utilized as of November
2011 for the following purposes:
Table 4: Purposes of Fund Utilization
SARO No. NCA No. Amount
(in millions) Actual Utilization
F-09-08388 253085-0 P 1,291.960 For the acquisition of developed lots and housing units in various resettlement sites under the CAIAP F-09-08389
F-09-09527 253116-3 100.000
F-09-08416 253068-4 6.900 Financial assistance to families under Balik-Probinsya Program
Total P 1,398.860
A qualified relocatee under the CIAP is entitled to a minimum of 32 sq. m. lot and
20 sq. m. floor area of housing unit (HU) at a cost of P100,000.00 and P75,000.00,
CIAP AND BALIK-PROBINSYA PROGRAM
12
respectively, or a total of P175,000.00. Said amount, less government subsidy
amounting to P35,000.00, is granted as a loan to the qualified relocatee in the
amount of P140,000.00, broken down as follows:
Table 5: Breakdown of Loans Granted to Qualified Relocatees
Particulars Unit Cost Total Cost
Developed Lot P 100,000.00
P 175,000.00 Housing Unit 75,000.00
Less: Subsidy (Lot) 25,000.00
35,000.00 Subsidy (Housing Unit) 10,000.00
Loan Amount P 140,000.00
As reflected in the loan agreement, the relocatee shall pay within a period of 30
years, subject to the rules and regulations specified by the NHA, at six percent
interest rate from the 6th to the 30th year in accordance with the following Schedule
of Amortization Payments:
Table 6: Schedule of Amortization Payments
Payment Period Monthly Amortization Daily
Amortization Developed Lot Housing Unit Total
Year 1 to Year 5 P150.00 P50.00 P 200.00 P6.67
Year 6 to Year 10 193.00 207.00 400.00 13.33
Year 11 to Year 15 293.00 207.00 500.00 16.67
Year 16 to Year 20 443.00 207.00 650.00 21.67
Year 21 to Year 25 593.00 207.00 800.00 26.67
Year 26 to Year 30 604.20 205.33 809.53 26.98
To implement the CIAP, NHA entered into contracts with three
developers/contractors, which were chosen by the community/homeowners’
association, for the development of lots and housing units in the following sites:
Table 7: Schedule of Implemented Projects
Constructors/Developers/Projects
Housing Units (Hus) Lots
Amount (in M P)
No. of HUs
Cost/HU (in M P)
Amount (in M P)
No. of Lots
Cost/Lot (in M P)
Baque Corporation
Southville 8 Housing Project 135.225 1,803 0.075 115.342 1,803 0.064
Southville 5 Housing Project 14.400 192 0.075 19.200 192 0.100
Southville 7 Housing Project 152.700 2,036
Southville 3A Housing Project 4.649 65 0.075 18.300 183 0.100
Sub-total 306.974 4,096 152.842 2,178
CIAP AND BALIK-PROBINSYA PROGRAM
13
Table 7: Schedule of Implemented Projects
Constructors/Developers/Projects
Housing Units (Hus) Lots
Amount (in M P)
No. of HUs
Cost/HU (in M P)
Amount (in M P)
No. of Lots
Cost/Lot (in M P)
Gateway Sand Builders
Southville 8A Housing Project 75.525 1,007 0.075 65.344 1,007 0.064
Southville 7A Housing Project 114.975 1,533
Sub-total 190.500 2,540 65.344 1,007
Goldenville Realty and Devt. Corporation
Southville 4 Housing Project 56.250 750 0.075 100.000 1,000 0.100
Southville 5A Housing Project 150.000 2,000 0.075 200.000 2,000 0.100
Towerville Resettlement Project 30.000 400 0.075 40.000 400 0.100
Southville 9 Housing Project 46.875 625 0.075 53.037 663 0.080
Sub-total 283.125 3,775 393.037 4,063
Total 780.599 10,411 611.223 7,248
As of May 2012, the constructors/developers were, so far, paid in the following
amounts:
Table 8: Schedule of Payments to Constructors/Developers
Constructors/Developers
Housing Units (Hus) Lots
Amount (in M P) No. of HUs
Amount (in M P) No. of Lots Contract Payment Contract Payment
Baque Corporation
Southville 8 Housing Project 135.225 131.063 1,750 115.342 108.740 1,750
Southville 5 Housing Project 14.400 14.066 190 19.200 17.895 192
Southville 7 Housing Project 152.700 150.690 2,036
Southville 3A Housing Project 4.649 4.631 65 18.300 13.320 148
Gateway Sand Builders
Southville 8A Housing Project 75.525 75.525 1,007 65.344 63.441 1,007
Southville 7A Housing Project 114.975 114.975 1,533
Goldenville Realty and Devt. Corporation
Southville 4 Housing Project 56.250 56.250 750 100.000 93.900 939
Southville 5A Housing Project 150.000 127.128 1,719 200.000 186.399 1,871
Towerville Resettlement Project 30.000 30.000 400 40.000 40.000 400
Southville 9 Housing Project 46.875 46.875 625 53.037 53.037 663
Total 780.599 751.203 10,075 611.223 576,732 6,970
In a Memorandum of Agreement (MOA) entered into by the NHA,
Developers/Constructors and Community Associations, the parties are under
obligation to:
CIAP AND BALIK-PROBINSYA PROGRAM
14
Table 9: Obligations of the Parties to the MOA
Party Obligations/Responsibilities
NHA Finance acquisition by affected families of developed lots and constructed housing units ready for occupancy;
Release payment to Developer/Constructor for developed lots in the amount not to exceed P100,000.00 per lot and completed housing units in the amount not to exceed P75,000.00 per housing unit compliant with the TOR;
Pay the retention money upon issuance of a Certificate of Completion by the Developer/Constructor;
Process the Loan Agreements covering developed lots and completed housing units being acquired by the individual member/family;
Issue billing and demand notices and Official Receipts for payment of amortizations by the members/beneficiaries;
Provide other forms of Technical Assistance to the Association as may be requested; and
Cancel award to the original lot allocatee/awardee in the event that the latter refused to sign the NHA Loan Agreement/or and allocate or re-award the same to other qualified beneficiary as required under NHA existing policy on beneficiary selection and lot award.
Developers/ Constructors
Undertake full development/repair works of lots and construction of housing units, in accordance with plans, designs and specifications in the TOR and applicable laws, rules and regulations;
Provide Association and NHA with all necessary documents for the financing of the unit;
Submit to NHA, prior to payment, As-Built Plans, Certificate of Completion and Acceptance, Certificate of Inspection and Acceptance Report duly signed by the concerned member/family, and Certificate of Occupancy of completed housing units issued and ready for occupancy by qualified beneficiary; and
Issue Warranty/Undertaking on compliance with documentary requirements covering developed lots and completed housing units being acquired as required in the TORs.
Community Associations
Submit to NHA HLURB registration and other documentary requirements for the acquisition of the identified developed lots acceptable to the members/families and compliant with the approved TOR; and
Ensure that each member beneficiary execute and submit the following: a. Loan Agreement(s) duly signed and notarized to cover assignment of loan in the
amount of not more than P100,000.00 for developed lots and P75,000.00 for completed housing units in favor of the Developer/Contractor;
b. Other documents required by the NHA; and c. Abide with all conditions of NHA cited in the TOR.
The responsibilities of the Developer/Constructor are further defined under the
TOR, as follows:
Deliver the developed lots with completed sites for community facilities or
open spaces in accordance with agreed and approved plans, designs,
specifications, standards and timeframe;
Undertake all corrective/repair works, at its own expense, on land
development project components/infrastructure facilities found defective or
below specifications within 30 days from receipt of notice to the NHA;
CIAP AND BALIK-PROBINSYA PROGRAM
15
Warrant complete, satisfactory and faithful performance of all works in
accordance with the design, plans and specifications approved by the NHA,
the concerned LGU and other regulatory agencies;
Warrant the issuance of individual titles in the name of the NHA within 30
days from execution of Deed of Sale with the NHA and the validity,
legality and authenticity of said titles;
Maintain and secure, at the proponent’s expense, all completed serviced
homelots and subdivision infrastructure facilities until turn over and
acceptance by the concerned LGUs or other agencies, but not to exceed one
(1) year from the date of actual acceptance of the developed lots/units
covered by a particular deed of sale;
Ensure the extension and installation of permanent electrical and water
facilities up to the service entrance of the residential lots, the cost of which
shall be shouldered by the proponent/landowner-developer and ensure that
the same are operational and/or available prior to occupancy of the serviced
homelots and sites for community facilities;
Ensure submission of Surety/Guaranty Bond in favor of and acceptable to
the NHA, equivalent to ten percent (10%) of the gross purchase price to
cover the remedial works for any deficiency in the land development
undertaken by the proponent for a period of one (1) year starting from the
date of the acceptance of the lots/units covered by a particular deed of sale;
Submit certified true copies of test results. All tests for land development
component shall be undertaken by the proponent in the presence of duly
designated NHA representatives as well as other agencies to determine its
good condition and operation. The costs of tests shall be for the account of
the proponent. All tests shall be undertaken prior to actual sale.
As provided under the TOR, there should be allocation of spaces for community
facilities such as elementary and secondary schools, health center/clinic, multi-
purpose hall, livelihood center, market, fire/police outpost, and parks and
playground. The Team conducted ocular inspection of sample relocation sites from
May 29 to November 29, 2013 to determine their present condition. Results of
inspection are documented by the following pictures:
Towerville Resettlement Project, Minuyan, San Jose Del Monte
Health Center
Basketball Court/Park
CIAP AND BALIK-PROBINSYA PROGRAM
16
HUs with broken/missing jalousies and damaged doors
Southville 8 and 8A Housing Projects Bgy. San Isidro, Rodriguez, Rizal
High School Building under construction
Elementary School Building
Facility for Livelihood Program
HUs with cracks on walls/damaged doors and doorlocks
CIAP AND BALIK-PROBINSYA PROGRAM
17
HUs with cracks on walls
HUs with surface scaling on the floor
Southville 3A Housing Project,Bgy. San Antonio, San Pedro, Laguna
Facility for Livelihood Program
HU used as worship area
Southville 7 & 7A Housing Projects, Bgy. Dayap, Sto. Tomas, Calauan, Laguna
Entrance Gate, Southville 7
HU used as worship area
HUs with missing/broken jalousies/damaged doors
CIAP AND BALIK-PROBINSYA PROGRAM
18
HUs with broken/missing jalousies and damaged doors or with indication of deterioration
CIAP AND BALIK-PROBINSYA PROGRAM
19
Southville 9 Housing Project, Pinugay, Baras, Rizal
HUs with broken/missing jalousies and damaged doors
HUs with cracks on flooring
The locations of the housing projects were observed to be accessible to
transportation, with police visibility and near public markets.
Balik-Probinsya Program
DBM released to NHA P6.900 Million under SARO No. 084116 covered by NCA
No. 253068-4, both dated November 19, 2009, for relief operations, rehabilitation,
reconstruction and other works and services to areas affected by natural calamities.
This fund was utilized by the NHA for the implementation of Balik-Probinsya
Program. Under this program, 300 families living along Manggahan Channel will
be selected and will be given P23,000.00 each, should they opt to return to their
respective provinces. As of audit date, a total of 169 families availed of the
program.
20
Part III
Audit Observations
21
Chapter I
Community Initiative Approach Program
CIAP
22
1. The purpose of providing permanent residence to qualified beneficiaries
through the development of relocation sites for families affected by typhoons
was not fully achieved. Of the sample 1,037 housing units at ten resettlement
sites, only 788 units, representing 76 percent, were still being occupied by
original beneficiaries which is not in accordance with the conditions set forth
under the agreement between NHA and beneficiaries. The 249 other
beneficiaries either sold or rent out the units to others, or did not at all use the
units or using the unit only occasionally.
As previously discussed, NHA is mandated to provide housing assistance to the
lowest 30 percent of urban population through slum upgrading, squatter
relocation, development of sites and services and construction of core housing
units. Among the beneficiaries of NHA are families affected by typhoon. To
address this concern, the DBM, in response to the letter-request dated
November 10, 2009 of the then Vice-President and Chairman of HUDCC,
released a total of P1.399 Billion from November 2009 to March 2010, to
NHA, to cover the Agency’s funding requirements for the relocation of
affected families through the implementation of the CIAP. This program is
intended for informal settler families qualified for relocation. Under this
program, the families will be resettled at their choice resettlement sites to be
developed by their choice developer. Qualified families are those:
affected by massive flooding, typhoons, volcanic eruption and similar
calamities, and those living along danger zones, waterways, rivers,
shorelines, esteros, creeks and the like;
who do not own any real property; and
not yet awardees of any Government Housing Program.
Upon release of the amount of P1.399 Billion, NHA contracted the services of
the following contractors purportedly selected by beneficiaries in the total
amount of P1.392 Billion for the development of 7,248 lots and construction of
10,411 housing units (HUs) under the CIAP:
Table 10: Schedule of Constructed Housing Units and Developed Lots by Contractors
Contractors
Contracted Amount (in M) No. of Units
Lots HUs Total Lots HUs
Baque Corporation 152.842 306.974 459.816 2,178 4,096
Gateway Sand Builders 65.344 190.500 255.844 1,007 2,540
Goldenville Realty and 393.037 283.125 676.162 4,063 3,775
OBSERVATIONS
CIAP
23
Table 10: Schedule of Constructed Housing Units and Developed Lots by Contractors
Contractors
Contracted Amount (in M) No. of Units
Lots HUs Total Lots HUs
Dev. Corp.
Total P 611.223 P 780.599 P 1,391.822 7,248 10,411
The projects were reported completed from 2009 to 2012 with contractors paid
in the total amount of P1.328 Billion as tabulated below:
Table 11: Schedule of Payments to Contractors and Corresponding Accomplishments
Contractor Project Locations Payments Accomplishments
Date Amount Lots HUs
Developed Lots
Baque Corporation Southville 8 Housing Project, Bgy. San Isidro, Rodriguez, Rizal
12/23/09 to 3/22/12
P 108.740 1,750
Southville 5 Housing Project,Bggy. Timbao, Binan, Laguna
1/13/10 to 5/11/12
17.895 192
Southville 3A Housing Project, Bgy. San Antonio, San Pedro, Laguna
1/19/10 to 2/3/11
13.320 148
Gateway Sand Builders
Southville 8A Housing Project, San Isidro, Rodriguez, Rizal
12/23/09 to 5/31/10
63.441 1,007
Goldenville Realty and Devt. Corporation
Southville 4 Housing Project, Bgy. Caingin, Sta. Rosa, Laguna
11/18/09 to 7/07/10
93.900 939
Southville 5A Housing Project, Bgy. Langkiwa, Binan, Laguna
11/18/09 to 3/11/11
186.399 1,871
Towerville Resettlement Project, Bgy. Minuyan, SJDM
12/09/09 to 3/2/10
40.000 400
Southville 9 Housing Project, Bgy. Pinugay, Baras, Rizal
3/29/10 to 5/23/11
53.037 663
Sub-total (Developed Lots) P 576.732 6,970
Housing Units (Hus)
Baque Corporation Southville 8 Housing Project, Bgy. San Isidro, Rodriguez, Rizal
11/18/09 to 5/13/10
131.063 1,750
Southville 5 Housing Project, Bgy. Timbao, Binan, Laguna
11/18/09 to 5/24/12
14.066 190
Southville 7 Housing Project, Bgy. Dayap, Sto. Tomas, Calauan, Laguna
12/03/09 to 5/27/10
150.690 2,036
Southville 3A Housing Project, Bgy. San Antonio, San Pedro, Laguna
1/25/10 4.631 65
CIAP
24
Table 11: Schedule of Payments to Contractors and Corresponding Accomplishments
Contractor Project Locations Payments Accomplishments
Date Amount Lots HUs
Gateway Sand Builders
Southville 8A Housing Project, San Isidro, Rodriguez, Rizal
11/18/09 to 5/19/10
75.525 1,007
Southville 7A Housing Project, Bgy. Dayap, Sto. Tomas, Calauan, Laguna
12/03/09 to 4/2/12
114.975 1,533
Goldenville Realty and Devt. Corporation
Southville 4 Housing Project, Bgy. Caingin, Sta. Rosa, Laguna
11/18/09 to 7/07/10
56.250 750
Southville 5A Housing Project, Bgy. Langkiwa, Binan, Laguna
11/18/09 to 3/11/11
127.128 1,719
Towerville Resettlement Project , Bgy. Minuyan, SJDM
12/09/09 to 3/2/10
30.000 400
Southville 9 Housing Project 3/29/10 to 5/19/11
46.875 625
Sub-total (Housing Units) P 751.203 10,075
Total Amount Paid to Contractors P 1,327.935
Of the reported developed lots and constructed housing units, 6,970 lots and
10,075 HUs were reportedly distributed to purported victims of Typhoons
Ondoy and Pepeng as of December 2013 as tabulated below:
Table 12: Schedule of Distribution of Developed Lots and Housing Units
Housing/ Resettlement Project Location
Accomplished Distributed
Lots HU Lots HU
Southville 8 Bgy. San Isidro, Rodriguez, Rizal
1,803 1,803 1,750 1,750
Southville 8A 1,007 1,007 1,007 1,007
Southville 5 Bgy. Timbao, Biñan, Laguna 192 192 192 190
Southville 4 Bgy Caingin, Sta. Rosa, Laguna 1,000 750 939 750
Southville 5A Bgy. Langkiwa Biñan, Laguna 2,000 2,000 1,871 1,719
Southville 7 Bgy. Dayap, Sto. Tomas,Calauan, Laguna
2,036 2,036
Southville 7A 1,533 1,533
Towerville Phase I Bgy. Minuyan, SJDM, Bulacan 400 400 400 400
Southville 3A Bgy. San Antonio, San Pedro Laguna 183 65 148 65
Southville 9 Bgy. Pinugay, Baras, Rizal 663 625 663 625
Total 7,248 10,411 6,970 10,075
The obligations of the awardees under the Loan Agreement with NHA are as
follows:
Pay to NHA their obligation subject to the rules and regulations of the
NHA;
CIAP
25
Strictly use the property for his/her own personal and family use and
benefit, and not for the use and benefit of any undisclosed party. The
purpose of the sale is to provide the Awardee with a permanent
relocation site to be exclusively utilized by himself/herself and his/her
dependents and not as a means of investment, speculation or profit
therefrom by way of assignment of his/her rights herein acquired or
lease or subletting to others;
Not to sell or transfer the lot/unit;
Not to change or convert the use of the residential lot/unit without the
written consent from the NHA;
Not to abandon the lot/unit without informing NHA. Otherwise, he
shall be perpetually disqualified from any assistance under the
government housing program;
Not to sell, encumber, mortgage, lease, sublet or in any manner alter or
dispose of his/her lot or rights and interest thereon, in whole or in part,
within ten (10) years from issuance of the Transfer Certificate of Title
(TCT), except through hereditary succession, without obtaining the
prior written consent of the NHA; and
Assume payment of monthly power and water charges upon occupancy
of the lot/unit, and pay monthly assessment fees to homeowners’
association for maintenance, security, garbage collection and other
appropriate fees, if any.
While the provisions of the Loan Agreement are restrictive, the same were
apparently not observed by the awardees as manifested in the results of
inspection of the project sites and interviews with the awardees conducted by
the Team between May 29, 2012 and November 29, 2013. Of the 1,037
inspected units at the 10 resettlement sites, 249 units, representing 24.01
percent, were either already sold or being rented to others, unused, or used only
occasionally, as tabulated below:
Table 13: Status of Occupancy
Housing Project Occupied by Beneficiaries
Occupied by Others
Occasionally Occupied
Vacant Total
Southville 8 38 31 1 2 72
Southville 8A 99 41 3 7 150
Towerville Phase 5 134 36 9 4 183
Southville 5 43 24 0 2 69
Southville 5A 23 8 0 1 32
Southville 4 53 13 0 0 66
Southville 7 50 3 2 1 56
Southville 7A 106 16 9 2 133
Southville 3A 55 10 0 0 65
Southville 9 187 13 7 4 211
CIAP
26
Table 13: Status of Occupancy
Housing Project Occupied by Beneficiaries
Occupied by Others
Occasionally Occupied
Vacant Total
Total 788 195 31 23 1,037
Percentage 75.99 18.80% 2.99% 2.22% 100%
The units sold or rented out were even used for other non-residential purposes
which is also prohibited under the agreement. As provided therein, the relocatee
is also prohibited to change or convert the use of the residential lot/unit without
the written consent of the NHA. Non-compliance with this requirement alone,
shall be considered a breach of the conditions and considered sufficient ground
for the cancellation of the award thereof. Samples of housing units used for
other purposes follow:
Table 14. Samples of Housing Units Used for Other Purposes
Location Actual Utilization
Lot 50, Blk. 6, Southville 8, Rodriguez, Rizal
Maternity Clinic
Lot 13, Blk. 17, Southville 8A, Rodriguez, Rizal
God’s Creation Full Gospel International Ministry
Lot 4 Blk 21, Southville 3A, San Antonio, San Pedro Laguna
Iglesia ni Cristo
CIAP
27
Table 14. Samples of Housing Units Used for Other Purposes
Location Actual Utilization
Lots 14 & 15, Blk 43, Southville 7A, Bgy. Dayap, Sto. Tomas, Calauan Laguna
Living Epistle Christian Family Church
Lot 24, Blk. 55, Southville 5 Binan, Laguna
Sari-Sari Store
Lot 24, Blk. 55, Southville 5A, Binan, Laguna
Jesus the Gospel Church International
The Team also noted housing units being used as billiard hall, computer shop,
NHA barracks, garage and bodega, among others.
It appears that the qualifications of beneficiaries were not properly screened as
those apparently not in need were likewise awarded a unit. Thus, while the
funds were used for the purpose intended, the goal of providing permanent
residence to qualified beneficiaries may not be considered fully served.
Moreover, such violations by the awardees were apparently tolerated by NHA
as the prescribed sanctions were not imposed.
Management’s Comments Team’s Rejoinder
The Project Offices concerned under the
supervision of Southern Luzon & Bicol
The proposed actions may not
be sufficient to ensure that the
CIAP
28
Management’s Comments Team’s Rejoinder
Management (SLB-AMO) shall
undertake the following courses of action
to ensure compliance with your
recommendations:
a. Project Offices to conduct regular
occupancy check of the relocated
families and to religiously send
notices to the awardees for their
monthly obligation to the NHA;
b. Conduct regular meetings with all the
beneficiaries/awardees for any
management update and concerns;
and
c. Other recommendations are being
adopted to all our project offices.
NHA’s mandate is fully
served. The selection process
should be enhanced to ensure
that only qualified
beneficiaries are awarded
units, and compliance by
relocatees with the MOA
should be strictly enforced and
sanctions imposed for non-
compliance thereof.
Monitoring mechanism should
be likewise strengthened.
2. The projects were accepted from the developers without ensuring their
compliance with the requirements under the contract. A number of units
have no water and power connections and with noted deficiencies.
As discussed earlier, NHA entered into contracts with four contractors for the
development of 7,248 lots and construction of 10,411 HUs. All contracted
works were reportedly completed from 2009 to 2012, and contractors fully
paid by NHA within the same period.
Under the contracts, the contractors were obligated, among others, to:
Undertake full development/repair works of lots and construction of
housing units, in accordance with plans, designs and specifications in
the TOR and applicable laws, rules and regulations;
Submit to NHA, prior to payment, As-Built Plans, Certificate of
Completion and Acceptance, Certificate of Inspection and Acceptance
Report duly signed by the concerned member/family, and Certificate of
Occupancy of completed housing units issued and ready for occupancy
by qualified beneficiary;
Deliver the developed lots with completed sites for community
facilities or open spaces in accordance with agreed and approved plans,
designs, specifications, standards and timeframe;
CIAP
29
Undertake all corrective/repair works, at its own expense, on land
development project components/infrastructure facilities found
defective or below specifications within 30 days from receipt of notice
from NHA;
Warrant complete, satisfactory and faithful performance of all works in
accordance with the design, plans and specifications approved by the
NHA, the concerned LGU and other regulatory agencies;
Maintain and secure, at the proponent’s expense, all completed serviced
homelots and subdivision infrastructure facilities until turn over and
acceptance by the concerned LGUs or other agencies, but not to exceed
one (1) year from the date of actual acceptance of the developed
lots/units covered by a particular deed of sale;
Ensure the extension and installation of permanent electrical and water
facilities up to the service entrance of the residential lots, the cost of
which shall be shouldered by the proponent/landowner-developer and
ensure that the same are operational and/or available prior to occupancy
of the serviced homelots and sites for community facilities;
Ensure submission of Surety/Guaranty Bond in favor of and acceptable
to the NHA, equivalent to ten percent (10%) of the gross purchase
price to cover the remedial works for any deficiency in the land
development undertaken by the proponent for a period of one (1) year
starting from the date of the acceptance of the lots/units covered by a
particular deed of sale;
Submit certified true copies of test results. All tests for land
development component shall be undertaken by the proponent in the
presence of duly designated NHA representatives as well as other
agencies to determine its good condition and operation. The costs of
tests shall be for the account of the proponent. All tests shall be
undertaken prior to actual sale.
Inspection of the projects, however, disclosed that, apparently, NHA accepted
the projects and awarded the same to the beneficiaries without ensuring that the
developers complied with the requirements under the contract. The Team noted
the following deficiencies during inspection:
Resettlement Project Remarks
Southville 7 and 7A, Calauan, Laguna
No power and water connections in a number of households. The projects were undertaken by Baque and Gateway Sandbuilders.
CIAP
30
Resettlement Project Remarks
Southville 8, Rodriguez, Rizal
Towerville Phase I, SJDM, Bulacan
Sampled units constructed by Goldenville Realty Development Corporation were not compliant with specifications and not acceptable in a number of cases as discussed below:
In a number of units within Blk. 13, the following deficiencies/deviations from plans and specifications were noted:
- Cracks were noted on walls and lintel beam
- The door jambs were made of 2”x2” angle bar, instead of fabricated A100 Steel Jamb filled with concrete cement;
- Flooring slab is now under early stage of deterioration, where separation of sand and stone from the matrix is visible due to inferior quality of concrete cement mixture;
- Cracks on walls, particularly in comfort room partition, which may be due to poor compaction of backfill that caused settlement of wall footings;
- There was no backfilling at the rear elevation of the building with a height of 2 meters and width of 2.20 meters, which may endanger the lives of the occupants.
- Exterior and interior walls were block finished instead of rough cement plaster finished, as per plans schedule for wall finishes;
- There was no lintel beam provided on top of CHB wall;
- The 4” Concrete Hollow Blocks (CHB) and concrete mixtures were of inferior quality, and plastering of walls were of poor
CIAP
31
Resettlement Project Remarks
workmanship as sand and stone separate from the matrix exposing the reinforcing bars;
- Sagrod welded on C-purlins was made of 6 mm. diameter plain steel bar, instead of 10 mm. diameter steel bar.
Occupants in Lot Nos. 21 and 22, Blk. 13, claimed that upon turn over, the floor was only gravel bedding and not floor slab, as specified in the contract.
The Team confirmed with Philippine Contractors Accreditation Board (PCAB)
as to issuance of license to the subject contractors to ensure their technical
capability to undertake the project. In its reply dated August 29, 2014, PCAB
informed the Team that Gateway Sand Builders, Inc., one of the
developers/constructors, has no record with PCAB.
Management’s Comments Team’s Rejoinder
The findings refer to Blk. 13, Phase 5,
Towerville Resettlement Project. During
the inspection of the COA Team as
assisted by the NHA Project Technical
Staff, the developer was instructed to
immediately undertake the necessary
repairs/corrective works on the identified
lots/units.
The Project Offices concerned under the
supervision of Southern Luzon & Bicol
Management (SLB-AMO) shall:
require all developers to strictly
follow what is stated in the MOA;
advise all developers to undertake
repair works, if necessary, and to
direct all beneficiaries to report to the
NHA all defects and to submit punch
list of all the fixture of the housing
units as per plans and specification.
Similar corrective measures
should be undertaken in all
project sites with the same
deficiencies, inspected or not.
In the first place, projects
found not compliant with plans
and specifications should not
have been accepted.
Moreover, the cases of absence
of power and water
connections should
immediately be addressed.
32
Chapter II
Balik-Probinsya Program
BALIK-PROBINSYA PROGRAM
33
DBM released to NHA P6.900 Million under SARO No. 084116 covered by NCA
No. 253068-4, both dated November 19, 2009, for relief operations, rehabilitation,
reconstruction and other works and services to areas affected by natural calamities.
This fund was utilized by the NHA for the implementation of Balik-Probinsya
Program. Under this program, 300 families living along Manggahan Channel will
be selected and will be given P23,000.00 each, should they opt to return to their
respective provinces.
1. Out of the 300 targeted family-beneficiaries, only 169 or 56.33% were
actually benefitted by the program due to failure of the others to comply with
the requirements. Correspondingly, only 56.33% or P3.887 Million out of
the P6.900 Million fund allocated for the program was utilized, leaving an
unutilized balance of P3.013 Million, thus the expected benefits to be derived
from the Balik-Probinsya Program were not maximized.
In view of the damage caused by Typhoon Ondoy in 2009 and the need to clear
waterways along Manggahan Channel, then Mayor Roberto Eusebio sought
help from the NHA for financial assistance for some 300 affected families who
wanted to return to their provinces, among others. To address such request,
NHA initiated the Balik-Probinsya Program whereby financial assistance in the
amount of P23,000.00 for each family shall be provided to 300 families who opt
to return to their provinces.
The Local Inter-Agency Committee (LIAC) identified more or less 1,342
families. Those identified were then deliberated upon by the Beneficiary
Selection and Awards Committee (BSAAC) of NHA, of which 300 families
were selected on a “first come, first served” basis.
To fund the program, then Vice-President requested on October 8, 2009, from
the DBM for the release of P6.90 Million from Calamity Fund. Subsequently,
on November 19, 2009, SARO No. F-09-08416 in the amount of P6.90 Million,
covered by NCA No. 253068-4, was issued to NHA, out of Malampaya Funds
and not from Calamity Fund.
INTRODUCTION
OBSERVATIONS
BALIK-PROBINSYA PROGRAM
34
Based on records, out of the total amount of P6.90 Million, the reported
expenses for the program was only P3.887 Million as of December 2012
pertaining to only 169 families assisted or 56.33 percent of the total targeted
families of 300 as tabulated below:
Table 16: Schedule of Beneficiaries of Balik-Probinsya Program
JEV No. LV No. Period Amount No. of
Beneficiaries
10-12-10282 10-08-159 Aug. 2-17, 2010 P 483,000 21
10-12-10283 10-10-187 Aug. 26-Oct. 1, 2010 506,000 22
10-12-10284 10-11-283 Aug. 26-Nov. 5, 2010 437,000 19
10-12-10792 10-09-164 Aug. 2-26, 2010 506,000 22
10-12-10793 10-090174 Aug. 2-Sept. 17, 2010 506,000 22
11-09-7215 11-06-062 May 5-June 13, 2011 483,000 21
11-11-221 October 2011 460,000 20
12-01-751 11-12-263 2011 23,000 1
12-08-7615 12-08-259 2012 483,000 21
Total P 3,887,000 169
Intended for Balik-Probinsya Program P 6,900,000
Unutilized Balance P 3,013,000
The low turn-out was claimed to be due to the failure of interested beneficiaries
to comply with the requirements to qualify under the program. The
requirements included, among others, proofs of occupancy/residency, and that
they were included in the census master list of families.
As mentioned earlier, there were more or less 1,342 families identified by the
LIAC from which the targeted families were selected by the BSAAC of NHA. The number of needy families initially identified is more than enough to
complete the 300 families originally intended to be benefitted from the
program. Apparently then, NHA did not request for substitution or take action
to inform LIAC of available funds under the program due to disqualified
applicants earlier identified. Consequently, the number of families benefitted
by the program was not maximized.
2. The P6.90 Million received for the Balik-Probinsya Program was all drawn
as cash advances covered by 13 checks. The successive grant of cash
advances without liquidation of previously granted cash advances and
without proof of immediate need is in violation of COA Circular No. 97-002
dated February 10, 1997. Moreover, of the initial cash advance of P6.900
Million, only P2.438 Million was used, with P4.462 Million in cash eventually
returned by the Disbursing Officer (DO) in November 2010. Subsequent cash
BALIK-PROBINSYA PROGRAM
35
advances amounting to P1.5 Million were granted in 2011 and 2012 of which
P1.449 Million was used.
COA Circular No. 97-002 dated February 10, 1997 as reiterated under COA
Circular No. 2009-002 dated May 18, 2009 provides, among others, that no
additional cash advance shall be allowed to any official or employee unless the
previous cash advance given to him is first settled or a proper accounting
thereof is made.
Examination showed that in order to implement the project, 13 cash advances in
the amounts of P500,000.00 and P900,000.00 were drawn by the designated DO
on August 2 and 3, 2010 or 8 months upon release of funds by the DBM
without determining the needs. The cash advance checks were either encashed
by the DO after 8 to 59 days or deposited to the Philippine Veterans Bank
(PVB) account three months later. Of the total cash advances, only P2.438
Million was reportedly utilized from August 11 to November 5, 2010. The
unused fund amounting to P4.462 Million was returned by the DO under OR
No. 3650671 dated November 15, 2010. It is worthy to note that the checks
totaling P4.4 Million were deposited to a PVB account only on November 17,
2010.
The summary of cash advances granted to the DO and subsequent utilization
and return is presented below:
Table 15: Schedule of Cash Advances Granted to Disbursing Officer
Check Date Amount
Utilized Unutilized Amount Number Date Encashed Deposited Date Amount
196696 08/02/10 08/10/10 P 500,000 08/12-17/10 P 483,000
196697 08/02/10 08/20/10 500,000 08/24-26/10 506,000
196698 08/02/10 08/26/10 500,000 10/04-11/5/10 437,000
196699 08/02/10 09/20/10 500,000 09/21-10/04/10 506,000
196700 08/02/10 09/30/10 500,000 09/01-17/10 506,000
Sub-total of Encashed Checks P 2,500,000 P 2,438,000 P 62,000
232801 08/02/10 11/17/10 500,000 500,000
232802 08/02/10 11/17/10 500,000 500,000
232803 08/02/10 11/17/10 500,000 500,000
232804 08/03/10 11/17/10 500,000 500,000
232805 08/03/10 11/17/10 500,000 500,000
232806 08/03/10 11/17/10 500,000 500,000
232807 08/03/10 11/17/10 500,000 500,000
232808 08/03/10 11/17/10 900,000 900,000
Sub-total of deposited Checks P 4,400,000
Total P 6,900,000 P 2,438,000 P4,462,000
BALIK-PROBINSYA PROGRAM
36
Table 15: Schedule of Cash Advances Granted to Disbursing Officer
Check Date Amount
Utilized Unutilized Amount Number Date Encashed Deposited Date Amount
Note: Unutilized amount returned by the DO per OR No. 3650671 dated 11/15/2010
232903 05/05/11 500,000 06/03-13/11 483,000 17,000
232933 06/06/11 500,000 2011 483,000 17,000
269546 02/23/12 500,000 2012 483,000 17,000
Sub-total P 1,500,000 P1,449,000 P 51,000
Total P3,887,000 P3,013,000*
*4,462,000 – 1,449,000 = 3,013,000
NHA granted additional three cash advances from May 5, 2011 to February 23,
2012 to the same SDO in the amount of P500,000.00 each or a total of P1.5
Million of which P1.449 Million was used.
The successive grant of cash advances without liquidation of previously granted
cash advances and without proof of immediate need is in violation of COA
Circular No. 97-002 dated February 10, 1997 as reiterated under COA Circular
No. 2009-002 dated May 18, 2009.
37
Part III
Recommendations
RECOMMENDATIONS
38
In view of the deficiencies noted in the implementation of projects, the Team
recommends the following courses of action:
Ensure that the projects are fully compliant with the MOA and Terms of
Reference before acceptance and payment. In no case should a contractor
be fully paid unless the obligations under the MOA and plans and
specifications are strictly complied with;
Require the Constructors/Developers to undertake repairs/corrective
measures on the noted deficiencies and to attend to water and power
connections;
Ensure that Constructors/Developers are eligible before entering into
tripartite MOA with them and the Community Association for financing of
the acquisition of developed lots and completed housing units by eligible
beneficiaries.;
Strengthen monitoring of compliance by the relocatees with the provisions
of the Loan Agreement. Enforce the cancellation of award to the original
lot allocatee/awardee in the event of non-compliance with the terms and
conditions under the Loan Agreement;
Refrain from granting successive cash advances to any disbursing officer
as this practice is not in consonance with COA Circular No.97-002 as
reiterated under COA Circular No. 2009-002; and
Return unused/unutilized Malampaya Fund to the Bureau of Treasury.
RECOMMENDATIONS