The Commission on Audit has (CoA) flagged the Department of Human Settlements and Urban Development (DHSUD) for incorrectly calculating housing compliance requirements, a move that effectively allowed developers to underpay their obligations to the government.

In its latest report, the commission called for the reassessment and collection of underpayments dating back to 2018.

The audit found that the department used its own 2021 order to compute escrow funds, despite the Department of Justice previously warning that the order contained legal flaws.

CoA disclosed that the department’s provisions were inconsistent with Republic Act 7279, as amended by RA 10884.

That law requires developers of subdivision and condominium projects to allocate a specific percentage of their project area or cost for socialized housing.

The commission noted that the department’s internal order effectively reduced the required participation from developers, leading to a deficiency in the Balanced Housing Development Program.

“Reassessment or recomputation of compliance obligations applies to projects with provisional escrow deposits that are still under evaluation,” the commission said.

It added that projects that have already been granted clearance will also be subject to reassessment if the compliance was found to be insufficient or not in accordance with the law.

Meantime, DHSUD Secretary Jose Ramon Aliling said the department would comply with the audit findings and the justice department’s opinion.

Aliling has invited officials from developer organizations to discuss the recomputations.

He also assured developers that the department would provide “ample time” to fulfill the additional obligations, citing the ongoing economic impact of the conflict in the Middle East.