Philippines interior department faces audit flags over accounting gaps and delayed project

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Philippines interior audit flags

Highlights

Department of the Interior and Local Government faces P567.12 million in accounting deficiencies from unreconciled records, property account issues and aged receivables, per 2025 audit.
Delayed construction of the three-storey 911 National Office and Command Center, unfinished over three years past deadline, ties up public funds and postpones service delivery.
DILG utilized P7.66 billion or 80.89% of its P9.47-billion budget in 2025, with P1.81 billion unspent and unremitted taxes/contributions totaling P20.21 million pending validation.

Audit findings and delayed command center project

As reported by BusinessWorld, citing the Commission on Audit in its 2025 annual audit report, the Department of the Interior and Local Government has P567.12 million in accounting deficiencies tied to unreconciled records, property account discrepancies and long-outstanding receivables that state auditors say undermine the reliability of the agency's financial balances.

Auditors also flag delays in the construction of the three-storey 911 National Office and Command Center building, which remains unfinished more than three years after its target completion date. They say the delay keeps public funds locked in an unfinished asset, weakens accountability among the parties involved and postpones the delivery of emergency services intended for the public.

CoA says procurement lapses also affect goods, infrastructure and consultancy services, with certain provisions of Republic Act No. 12009, or the New Government Procurement Act, not observed or complied with. According to the audit findings, these deficiencies reduce transparency, completeness and economy in the procurement process.

Budget execution and compliance impact

The DILG uses P7.66 billion, or 80.89%, of its P9.47-billion budget allocation, leaving P1.81 billion unspent at the end of 2025. Eight major programs post fund-use rates ranging from 2.45% to 64.9%, pointing to uneven budget execution across key activities.

State auditors also report P20.21 million in taxes and mandatory contributions to the Government Service Insurance System, Home Development Mutual Fund and Philippine Health Insurance Corp. that remain unremitted pending validation. In addition, CoA records P103.71 million in unsettled audit disallowances and P2.55 million in unsettled audit suspensions as of Dec. 31, 2025, citing management's failure to enforce collection from accountable personnel.

Despite these findings, CoA issues an unmodified opinion on the DILG's 2025 financial statements, indicating that the accounts are fairly presented in all material respects. The department says it will implement the audit recommendations, including reconciling accounting discrepancies, expediting the completion and turnover of the command center building and settling outstanding accounts.

In our earlier article on Menara Asia’s launch of the Menarabena platform, we looked at how the construction sector is using digital tools to connect contractors with building material suppliers while strengthening certification and compliance checks. We also noted industry concerns around cost control, meeting material specifications, and avoiding project delays—issues that digitalisation aims to address without replacing existing regulatory approvals.

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