THE Commission on Audit has flagged the P5.57 million overpayments of the Nueva Ecija University of Science and Technology or NEUST to its suppliers in 2023.

This is due to the school’s failure to recoup the advances paid for mobilization fees.

The COA explained that mobilization fees are advance payments made to contractors to set up equipment and materials at the construction site before the commencement of the project.

The audit body stressed that it is under the Government Procurement Reform Act, Republic Act No. 9184 stating that the advance payment should be repaid by the contractor by deducting 15 percent from its periodic progress payments to recover the advances.

In the case of NEUST, it made advances to contractors amounting to P33.214 million as of Dec. 31, 2023.

“Post-audit of Disbursement Vouchers revealed that payments made to contractors for progress billings did not include deduction for the recoupment of advances to contractors. Inquiry disclosed that the accounting personnel deducted the full amount of advances to contractors on final billing instead of deducting them in every progress payments. This practice was not in accordance with Sections 4.3 and 5.3 Annex E of RA No. 9184,” the COA said.

Thus, the amount of P4.717 million should have been deducted from the total amount of progress billings paid to the contractors.

The failure to deduct resulted in the total over payment by P4.717 million, it also said.

At the same time, COA noticed that there was an unaccounted beginning balance totaling P0.854 million booked in the Advances to Contractors account, which has not been recouped since 2018, and it resulted in overpayment of P5.572 million as of Dec. 31, 2023.

Because of this, the COA recommended that the university accountant should deduct the P4.717 million that should have been recouped from the next progress billing of the contractors.

It also said the school should exert extra effort to trace the original transactions of the unaccounted balance of P0.854 million to determine proper disposition and cause adjustments, if warranted.