The Commission on Audit has admonished the National Housing Authority for failing to recoup P645.285 million in advance payments made to contractors for 117 infrastructure projects that either needed to be completed or terminated.

State auditors noted that the failure had already been observed in the 2020 and 2021 annual audit reports but that the NHA still failed to remedy the situation as of December 2022.

NHA's inaction may result in the loss of government funds "since some of the contractors could no longer be located and the performance securities posted had already expired," according to the CoA.

 Based on CoA Circular 2015-010, the 15 percent advance payment should be proportionately deducted from every progress billing; hence, the account balance should remain in the subsidiary ledger of contractors pending the release of the last cost.

 Advance payments to contractors represent the 15 percent mobilization fees granted to contractors for infrastructure projects to mobilize equipment and workforce resources to the project site until the completion of the contract.

 CoA said NHA's failure to recoup the advance payments breached the provision of the Government Procurement Reform Act (RA 9184), which requires contractors to repay the advance payment by deducting 15 percent of their periodic progress payments equal to the percentage of the total contract price used for the advance payment.

 In its 2022 report, CoA noted that NHA has yet to recoup the sum, which accounts for 117 infrastructure projects, despite the completion and termination of it as of 31 December 2022.

 Audit findings revealed this could be attributed to the lack of internal control policies and procedures that will promptly detect the unsettled balances between the NHA and the contractors concerned.