THE Commission on Audit (CoA) flagged P1.4 billion in unreconciled accounting discrepancies and P684.4 million in unutilized disaster risk reduction and management funds at the Local Water Utilities Administration (LWUA), citing inadequate financial reconciliation and delays in project implementation.
State auditors found that LWUA’s P5.229-billion inter-agency payables account contained a P1.330-billion unreconciled discrepancy in its Due to National Government Agencies-Liability for Special Fund account. The agency’s subsidiary ledgers did not match official reports on the status of subsidy funds.
“Due to lack of sufficient details and reconciliation of variances between the SLs and the Report on the Status of Subsidy Fund, we were unable to determine the appropriate adjustments in respect of the balance of the Inter-Agency Payables account as at December 31, 2025 and 2024,” CoA said in its annual report.
State auditors also questioned the reliability of LWUA’s P12.378-billion receivables account, which includes P9.777 billion in loans receivable from local water districts and P122.786 million in open account bills.
Confirmations with local water districts revealed a P178.817-million discrepancy between the agency’s book balances and external confirmations. Internal checks also found a P99.262-million gap between its general ledger and subsidiary ledgers.
“Due to lack of sufficient details on the analysis and reconciliation of variances between the loan balances per books and confirmation results and general ledger and subsidiary ledgers, we were unable to determine the appropriate adjustments in respect of the balance of the Receivables account as at December 31, 2025 and 2024,” state auditors said.
CoA also flagged delays in LWUA’s disaster response projects, which left P684.4 million in funds unspent as of the end of 2025. The agency received P1.891 billion from the National Government between 2014 and 2025 for disaster risk reduction and management projects.
Auditors attributed the delays to slow disbursements and inadequate project monitoring and supervision by LWUA’s engineering department. These resulted in delays of 463 to 4,372 days in restoring potable water supplies to disaster-affected communities.
CoA recommended that LWUA management initiate the return of long-idle project balances to the Bureau of the Treasury, including P59.323 million allocated for National Housing Authority-Yolanda water projects and P265,559 under the Yolanda Rehabilitation and Recovery Program, which recorded no disbursements.
LWUA ended 2025 with P17.373 billion in assets and P8.775 billion in liabilities, leaving equity at P8.598 billion. — Pexcel John Bacon