Explain P20M cash advances
The Commission on Audit has questioned the validity of P20.6 million in cash advances paid by the Mandaue City Government to the contractors of two infrastructure projects in 2017.
COA said the accuracy and validity of the balance of advances to BSP & Company, Inc. and Rosal Infrastructure Builders totaling P20,667,373.32 cannot be ascertained due to lack of necessary information or supporting documents.
Documents mention that the balance of the account represents the balance of mobilization for the planning, design, pre-implementation, and construction of the public market as well as the construction of a mediumrise housing project in Looc, Mandaue City.
However, COA found that the city government did not submit supporting documents necessary to audit the account such as the name of the project to which the advances were made, status of the projects, information on whether or not the contractor was fully paid without deducting the corresponding advances or mobilization, date of payment, and ageing of the advances to contractors account.
“Verification further disclosed that no analysis was made of the account made by the City Accounting due to lack of information or data regarding the projects where there were outstanding advances to contractors, the reasons for its non-recoupment and the persons liable thereto are not identified hence the accuracy of the account balance cannot be ascertained,” read the 2017 audit report.
BSP & Company, Inc. received P20,404,874.46 and Rosal Infrastructure Builders received P262,498.86.
Accounting records show that Rosal Infrastructure Builders, the contractor of the destroyed public market (Phase 1), also did not collect their final payment for unknown reasons.
This prompted COA to ask the mayor to direct the City Engineering and the City Accounting offices to submit the information and data together with the status of these projects.
COA also enjoined the city government to investigate why the advance payments were not deducted from the progress billings and the non-forfeiture of the surety bonds to recoup the advance payments made to contractors. —
Gregg M. Rubio, Banat News Copy Editor/BRP