PH Navy audit shows delays in hundreds of millions worth of projects

MANILA, Phiippines – The 2018 audit of the Philippine Navy showed that there were projects worth hundreds of millions that were either not implemented or delayed, putting to question the inefficiency of the Navy’s use of its funds.

A big amount noted in the audit were projects worth P154.648 million which were not implemented “resulting in accumulated idle funds and depriving the Government of the benefit that could be derived therefrom.”

According to the Commission on Audit (COA), the delayed projects involved 3 contracts  from Talon Security Consulting, and the joint ventures of Propmech Corporation and SAAB, and Krusik Ad Valjevo and Stone of David Tactical.

The contract of Propmech and SAAB joint venture has been suspended, while the Krusik Ad Valjevo and Stone of David Tactical project has been terminated.

Talon Security had incomplete deliveries, although the Navy later told COA that goods have been delivered but the functional testing on the items were still incomplete.

“It must be noted that the delayed or non-delivery goods and services is a breach of contract and can affect the operational tempo of the Philippine Navy, which may hinder the accomplishment of its mission,” said the COA.

Slow disaster project

State auditors also noted that a P2 million worth disaster project has not even started.

The Navy had a budget of P2.008 million to build the Paniran naval detachment in Zamboanga, but according to them, the presence of informal settlers in the project site had prevented them from starting construction.

“The delayed completion of project may affect the readiness of the Philippine Navy in case of disasters. We recommended and (Navy) Management agreed to fast track the completion of the Paniran Detachment this year,” said auditors.

Unrecovered advances

COA also called the Navy out for failing to recover P2.3 million worth of advances to contractors who did not deliver goods and services “after a considerable length of time.”

“To date, after more than 3 years of inaction, still no collection suit was filed in court against the above defaulting contractors and no action was commenced to enforce the performance guaranty,” COA said. 

Auditors said that the termination and suspension of projects were again due to issues with the project sites.

“Management must still terminate the contracts and demand for the refund of advances to contractors and the submission of documents to determine the extent of work that they had accomplished,” COA said. –

Lian Buan

Lian Buan covers justice and corruption for Rappler. She is interested in decisions, pleadings, audits, contracts, and other documents that establish a trail. If you have leads, email or tweet @lianbuan.