Management Comment on the
Date Granted Amount
Unrecouped Amounts
Amounts will be deducted from unbilled
progress billings for completed projects
CY 2018 449,021.25 while terminated contracts shall be recoup
from the performance bond submitted by
the contractor
The City shall recoup the advance
CY 2018 19,261.87
payment against the performance bond.
The amount will be deducted from
February 2020 2,975,781.73
unbilled progress billings of the project
December The contractor executed an affidavit to
749,675.87
2022 deduct from his unbilled project.
Right-of-way problem in delivering the
April 2023 449,697.43 construction materials. Expropriation
Case had been initiated and filed.
Total ₱5,072,122.24
2.5 Clarification on management’s comments regarding on the unrecouped amount
revealed that there were unbilled accomplishments made by the original
contractor prior to awarding the projects to another contractor who completed the
projects. Recoveries from the original contractors will be offset against these
unbilled progress billings of the terminated projects. Additionally, the other
advances that could not be charged against unbilled progress billings shall be
recouped against the performance bond submitted by the contractor.
2.6 The performance bond serves as a critical tool to protect the government from the
risks of unrecouped advances by providing a financial backup. It ensures that,
should the contractor fail to complete the project or fulfill other contractual
obligations (including the recoupment of advances), the City has a means to
recover funds. This mechanism significantly enhances financial security and
minimizes the impact of contractor defaults on public resources. Therefore, the
performance bond plays a vital role in safeguarding the integrity of public funds
during the execution of government contracts.
2.7 The inability to monitor and recoup advances effectively could possibly expose
the City to overpayment resulting to possible loss of government funds .
2.8 This observation was communicated to Management through Audit Observation
Memorandum (AOM) No. 2025-07(24) dated April 10, 2025.
2.9 We recommended that Management efficiently and effectively monitor the
recoupment of advances made to contractors, ensuring that these are repaid
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