Management Services

Report No. 2002-06

Sectoral Audit

Socialized Housing Program

NATIONAL HOUSING AUTHORITY
 Republic of the Philippines
Commission on Audit
MANAGEMENT SERVICES
Commonwealth Avenue, Quezon City, Philippines
Telephone Nos.: 931-9235 , 931-74-55

9 June 2003

The General Manager

National Housing Authority
Elliptical Road, Diliman
Quezon City

Sir:

We are pleased to transmit the report on the sectoral audit of the socialized
housing program of the government. The audit was focused on the examination
of the role and performance of the NHA in contributing to the achievement of the
goals of the government housing program.

The audit was conducted from 22 July – 30 October 2002 in compliance

with Assignment Order No. 2002-020 issued by the Commission on Audit on l8
July 2002. The audit covered the period 0l January 200l to 30 June 2002.

The audit observations and recommendations were discussed with

concerned officials and employees of the corporation in an exit conference held
on 30 October 2002. Their comments were incorporated in the report where
appropriate.

We look forward to the proper implementation of the recommendations

and we would appreciate being informed on the action taken thereon within one
month from receipt hereof.
 We acknowledge the cooperation and assistance extended to the audit
team by the officials and staff of the corporation.

Very truly yours,

By Authority of the Chairman:

ILUMINADA M.V. FABROA

Director IV
Management Services
Contents Page
Part I Executive Summary 1

Introduction 2
Agency/Program Background 4
Overall Audit Objective and Scope 5
Specific Audit Objective and Scope 6
Justifications for Choice of Area 6
Audit Approach and Methodology 6
Audit Conclusion 7

Part II Observations and Recommendations 8

Chapter 1 Risk Management 9

Introduction 10
Observation 10
Recommendation 12

Chapter 2 Reporting, Monitoring and

Coordination 14

Introduction 15
Observation 17
Recommendation 21

Chapter 3 Disposition/Distribution 24

Introduction 25
Observations 26
Recommendations 29

Chapter 4 Occupancy 33

Introduction 34
Observations 35
Recommendations 39
 Part I

Executive Summary

1
EXECUTIVE SUMMARY

INTRODUCTION

Providing for the housing needs of the people especially those belonging to the
poor sector of the society is a big and challenging task the government has to
embrace. Significant effort and resources have been devoted to addressing the
housing problems in the country, yet much still remains to be done.

Provision of affordable housing requires government intervention, and the degree

of such intervention needs to be defined. This is to ensure a balance in the
roles/participation among agencies/sectors involved in the housing program of
the government. In the process of meeting the housing needs of the people, the
government must also focus on its ultimate objective of eventually empowering
the people to enable them to address their own housing needs.

The Medium-Term Philippine Development Plan or the MTPDP for the plan
period 2001-2004 reported that the supply of houses has not been increasing and
the costs of available housing are unaffordable, especially to low-income
families who have no access to credit markets for housing. This matter is
exacerbated by a land market that limits reallocation of rights to the most
valuable use of land. As a result, informal settlements continue to persist. Past
housing programs have enabled non-poor households to have access to the
formal housing markets. However, socialized housing is inaccessible to the poor,
especially those in the urban areas. The bottom 40 percent of urban households
had to resort to informal housing or informal settlements characterized by
congestion and very poor living conditions.

Under the MTPDP for the above stated plan period, the housing sector targets the
provision of shelter security to 1,200,000 households that translates to a funding
requirement of P215.16 billion. The target adopts a 73 percent to 27 percent ratio
in favor of socialized housing, principally for the bottom 40 percent of
households because of their inability to access the formal housing markets. This
will mean providing these households with affordable socialized housing through
efficient production of housing units for ownership and sustainable housing
finance.

Executive Order (E.O.) No. 90, s.1986 identified the four key agencies for
housing as follows: the National Housing Authority (NHA), the National Home
Mortgage Finance Corporation (NHMFC), the Human Settlements Regulatory
Commission (now called the Housing and Land Use Regulatory Board or
HLURB) and the Home Financing Corporation (renamed as the Home Insurance
and Guaranty Corporation then as the Home Guarantee Corporation or HGC
under Republic Act No. 8763 dated 29 March 2000).

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 EXECUTIVE SUMMARY

The NHA is mandated as the sole government agency engaged in direct shelter
production focused on providing housing assistance to the lowest 30 percent of
urban income-earners through slum upgrading, squatter relocation, and
development of sites and services and construction of core-housing units.

The NHMFC is the major government home mortgage institution and is tasked to
operate a viable home mortgage market, utilizing long-term funds principally
provided by the Social Security System, the Government Service Insurance
System, and the Home Development Mutual Fund to purchase mortgages
originated by both private and public institutions.

The HLURB is the sole regulatory body for housing and land development. It
ensures rational land use for the equitable distribution and enjoyment of
development benefits.

The HGC mobilizes all necessary resources to broaden the capital base for the
effective delivery of housing and other related services, primarily for the low-
income earners through a viable system of credit insurance, mortgage guarantee
and securitization.

Charged with the main function of coordinating the activities of the government
housing agencies to ensure the accomplishment of the National Shelter Program
(NSP) of the government is the Housing and Urban Development Coordinating
Council or HUDCC.

The NSP is the government's comprehensive strategy to address the country's

housing problem. It rests on three basic principles, namely: (1) reliance on the
initiative and capability of beneficiaries to solve their housing problem with
minimum assistance from the government; (2) the private sector as the principal
player in providing decent and affordable housing; and (3) the government as
enabler, facilitator and catalyst in the housing market, while focusing assistance
to families within the poverty line. (The State of Philippine Housing Programs: A
Critical Look at How Philippine Housing Subsidies Work by Llanto and Orbeta,
Jr., 2001)

The President of the Philippines, in her State of the Nation Address (SONA) in
2001 promised to give shelter security units to 150,000 urban poor families every
year. This figure was reported in the SONA for the year 2002 to have been
achieved.

3
 EXECUTIVE SUMMARY

AGENCY/PROGRAM BACKGROUND

The NHA is a government-owned and controlled corporation created on 31 July

1975 under Presidential Decree (P.D.) No. 757. It is under the Office of the
President and shall exist for a period of 50 years but may be extended.

The NHA has the following purposes and objectives:

 To provide and maintain adequate housing for the greatest possible

number of people;
 To undertake housing, development, resettlement or other activities
as would enhance the provision of housing to every Filipino;
 To harness and promote private participation in housing ventures in
terms of capital expenditures, land, expertise, financing and other
facilities for the sustained growth of the housing industry.

Its powers and functions are exercised by the Board of Directors in accordance
with the established national human settlements plan prepared by the Human
Settlements Commission. Among such powers and functions are the following:

 Develop and implement the comprehensive and integrated housing

development and resettlement program;
 Formulate and enforce general and specific policies for housing
development and resettlement;
 Develop and undertake housing development and/or resettlement
projects through joint ventures or other arrangements with public and
private entities;
 Promote housing development by providing technical assistance.

As provided under Republic Act (R.A.) No. 7835 otherwise known as the
Comprehensive and Integrated Shelter Financing Act of 1994 or simply the
CISFA, the NSP has five vital components as follows:

 Resettlement Program
 Medium-Rise Public and Private Housing
 Community Mortgage Program (CMP)
 Cost Recoverable programs
 Local Housing

The CMP is a mortgage financing program of the NHMFC which assists legally
organized associations of underprivileged and homeless citizens to purchase and
develop a tract of land under the concept of community ownership. There are
basically four parties involved in the CMP. The NHMFC is the primary

4
 EXECUTIVE SUMMARY

implementer, in coordination with all other concerned agencies/entities. The

landowner is the person who is willing to sell his property to the beneficiaries at
an agreed price and term of payment. The CA, which is composed of the
beneficiaries of the loan is the borrower and the mortgagor. The originator is the
person to whom the loan and the mortgage shall pass. The originator shall
organize, orient, and assist CAs or beneficiaries in securing the loan/financing
and enhance their management capabilities. Said originator may either be a
government agency, a private person, or a people's organization.

On the other hand, the Resettlement Program involves land acquisition and site
development by the NHA to generate serviced homelots for families displaced
from sites earmarked for government infrastructure projects, those occupying
danger areas such as water ways, esteros, railroad tracks and those qualified for
relocation and resettlement assistance under R.A. No. 7279 or the Urban
Development and Housing Act of 1992 or the UDHA, in short. The development
of resettlement sites shall be undertaken by the NHA, on its own or jointly with
LGUs, other governmental agencies and with the private sector.

OVERALL AUDIT OBJECTIVE AND SCOPE

The objective of the audit was to determine whether the management systems
and procedures for the:

 funding of shelter security units;

 reporting, monitoring, and coordination;
 distribution/disposition of shelter security units to the intended
beneficiaries; as well as
 occupancy by the intended beneficiaries

are adequate and effective and whether these contributed effectively to the
attainment of the objective of the government in providing shelter security units
to the low-income group.

The audit covered the following:

 Mandated sources of funds from the Public Estates Authority (PEA),

the Philippine Amusement and Gaming Corporation, and the
Philippine Charity Sweepstakes Office
 Projects constructed and /or awarded or disposed/distributed for the
period 01 January 2001 to 30 June 2002

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 EXECUTIVE SUMMARY

 Selected socialized housing projects in the City of Pasig (CMP) and

in the Municipality of Rodriguez, formerly Montalban, Province of
Rizal (Resettlement Program)
 Shelter security units valued at/costing P180,000 and below
 Intended beneficiaries with annual income below P60,000

It was undertaken in six agencies: HUDCC, NHA, NHMFC, HLURB, City of

Pasig, and Municipality of Rodriguez, Province of Rizal. Surveys and interviews
were also conducted in the Department of Budget and Management, the Bureau
of the Treasury, and the National Economic Development Authority to confirm
data/information gathered during the audit of the six agencies.

The audit was conducted from 22 July – 30 October 2002 in accordance with
Assignment Order No. 2002-020 issued by the Commission on Audit on 18 July
2002. It covered the period 01 January 2001 to 30 June 30 2002.

SPECIFIC AUDIT OBJECTIVE AND SCOPE

Insofar as the NHA is concerned, the audit was aimed at determining whether the
agency’s systems and procedures effectively contributed to the government’s
objective of providing shelter security units to the targeted low-income group
taking into consideration the factors enumerated in the overall audit objective.

JUSTIFICATIONS FOR CHOICE OF AREA

Priority program of the government per MTPDP

Addresses concerns of target beneficiaries as to:

 Funds being diverted for other purposes

 Awardees and/or occupants not being the target beneficiaries

Congressional concern
Media interest (regular media/news coverage)

AUDIT APPROACH AND METHODOLOGY

The performance of the agency was assessed using the following criteria:

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 EXECUTIVE SUMMARY

 Established policies and procedures

 Sufficient resourcing (funding)
 Effective reporting and monitoring mechanisms
 Effective coordination mechanisms and strategies
 Systematic risk management program

The following approaches/methodologies were employed during the audit:

 File review
 Use of survey questionnaires
 Interviews and discussions with agency officials and personnel and
with selected beneficiaries
 Collection and analysis of data
 Review of results of analyses of data
 Inspection/observation
 Assessment or risk management/controls testing

AUDIT CONCLUSION

The audit concluded that the NHA could have contributed to the government’s
objective of providing shelter security units to the targeted low-income group
more effectively had it adequately managed the existence of risks and
weaknesses in the areas of monitoring and coordination, the
disposition/distribution of the shelter security units, and the actual occupancy of
the units by the intended beneficiaries, as discussed in detail in the pertinent
portions of the report.

7
 Part II

Observations
and
Recommendations

8
 Chapter 1

Risk Management

9
RISK MANAGEMENT

STRUCTURED PROCESS FOR MANAGING PROGRAM RISKS

INTRODUCTION

Risk is the chance of something happening that will have an impact upon
objectives. The happening of risks would most likely affect operational activity
and would result to unnecessary costs and losses. Thus, the development of an
organizational risk management policy and support mechanism is necessary to
provide a framework for identifying, analyzing, evaluating, treating, monitoring
and communicating risks associated with any activity, function, or process in a
way that will enable organizations to minimize losses and maximize
opportunities. To be able to serve as a better effective guide, the Risk
Management Plan should be documented and assignment of responsibility must
be clearly established. It should also be updated from time to time.

The benefits of effective risk management, insofar as NHA as the sole

government agency engaged in direct shelter production is concerned, include
efficient and effective identification and prequalification of qualified
beneficiaries and distribution of shelter security units to intended beneficiaries,
and the actual occupancy of the units by intended beneficiaries. Overall, this will
assist in the effective implementation of the housing program.

OBSERVATION

ABSENCE OF A STRUCTURED PROCESS FOR MANAGING RISKS

1. The agency could have greatly enhanced its ability to deal with
emerging issues and new risks that would have an adverse effect on
the housing program if it had a structured process for managing
program risks. Without this structured and systematic risk
management approach, the audit noted a number of key program
risks eventuated preventing achievement of the overall effectiveness
of the housing program.

The NHA does not have a documented nor a structured risk

management process. If the risks are left untreated, this can lead to
adverse exposure or loss and prevent an agency from meeting its
targets and objectives efficiently and effectively. Thus, managing risks
is an essential element of good management practice. Managers need

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 RISK MANAGEMENT

not only to identify significant risks which impact upon the attainment
of goals but to manage them to mitigate their effect. The risk
management policy shall be relevant to the organizational strategic
context and its goals, objectives, and the nature of its business.

Without a structured process of managing risks, there is a great

likelihood and probability that the risks would not be identified,
analyzed, treated and monitored specifically in the areas of funding,
monitoring and coordination, distribution and occupancy of shelter
security units, as discussed in the succeeding topics. This, in turn,
would frustrate the attainment of objectives of the government housing
program.

RISKS IN DISTRIBUTION FUNCTIONS

Without the conduct of pre-qualification of CMP beneficiaries and the non-

inclusion of beneficiaries in the Alpha Listing maintained by the NHA, the
following risks are likely to occur:

 the actual beneficiary may not be the intended beneficiary; and

 the beneficiary has already availed of the benefit earlier or there will
be double or multi-awarding of the government housing program.

If the foregoing risks are not managed, this may lead to a frustration of the
attainment of the objectives of the government housing program insofar as the
interest of the other qualified beneficiaries who were not able to avail of the
program is concerned. If beneficiaries who have already availed of the
socialized housing program were not identified, the limited resources of
government would be utilized in giving benefit to the same parties instead of
being able to distribute the benefit to a greater number of deserving
persons/communities and thus, alleviating the housing problem.

As discussed under the topic on Disposition/Distribution, the NHA did not

conduct the pre-qualification process involving the Ninoy Aquino Pilot
Community (NAPICO) II Homeowners Association (HOA), Inc. the members of
whom are beneficiaries under the CMP. Likewise, the beneficiaries are not
included in the Alpha Listing of NHA and the Alpha Listing was not coordinated
with HUDCC and the other government housing institutions. Thus, the agencies
concerned could not readily detect whether there were illegitimate or unintended
beneficiaries. In this sense, the real picture of how many actually benefited from
the socialized housing program of the government could not be determined as the
number is distorted by the possible inclusion of unintended beneficiaries in the
list.

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 RISK MANAGEMENT

RISKS IN NON-MONITORING OF OCCUPANCY

One of the controls to ensure that the units are provided to those most in need
and that the actual occupant of a shelter security unit is the intended beneficiary
is to have a strong and regular monitoring and evaluation of the units and of the
occupants of awarded units. Without this, the risks that the units are not
distributed/occupied and that actual occupant is not the intended beneficiary are
likely to occur and would undoubtedly lead to the failure of the socialized
housing program of the government as the interest of the intended beneficiaries
are jeopardized.

With regard to the CMP, particularly that of NAPICO II HOA, Inc., no regular
monitoring and evaluation of the actual occupants of the awarded units was
conducted by NHA personnel inasmuch as they believe that it is not their
responsibility but that of the community association. As a result, and as observed
by the team during visits conducted at the site, several occupants are not the
intended beneficiaries. A detailed account of this observation is provided under
the topic on Occupancy.

RECOMMENDATION

1.1 To be able to avoid or mitigate the impact of risks associated with the
housing program, the NHA should consider reviewing its processes
and design and establish a structured risk management process,
specifically in the conduct of pre-qualification of prospective
beneficiaries and monitoring of occupancy.

The following strategies may be adopted in implementing a risk

management system:

 Establish a risk management committee or coordinator and

allocate management responsibilities;
 Carry out risk surveys and determine priorities for planning
risk management activities;
 Make all staff aware and inform them of the benefits of risk
management;
 In areas considered necessary, develop new procedures and set
performance targets; and
 Develop reporting policies and procedures to monitor progress
of compliance with the plan.

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 RISK MANAGEMENT

To serve its purpose more effectively, the plan should be

continually monitored and reviewed because risks do not only
change over time, but their relative significance as well as the
mechanisms and tools required to manage them efficiently and
effectively do change also.

MANAGEMENT COMMENT/REACTION

NHA management claimed that their existing system in pre- qualification

consists of checks and controls that would help manage risks.

TEAM’S REJOINDER

While it may be true there are existing checks and controls in the prequalification
process, these cannot substitute a documented risk management plan, which is an
essential element of good management practice. The risks are not clearly
identified in the system nor are there processes to analyze and manage same.

13
 Chapter 2

Reporting, Monitoring
and
Coordination

14
REPORTING, MONITORING AND COORDINATION

EFFECTIVENESS OF REPORTING, MONITORING AND

COORDINATING FUNCTIONS/MECHANISMS

INTRODUCTION

Executive Order No. 90, s. 1986 created the HUDCC, which is charged with the
main function of coordinating the activities of the government housing agencies,
including the NHA, to ensure the accomplishment of the NSP. Among its powers and
functions are:

 To determine the participation and coordinate the activities of the key

government housing agencies in the national housing program; and
 To monitor, review and evaluate the effective exercise by these agencies
of their assigned functions.

The primary function of HUDCC of coordinating and monitoring the activities of all
government agencies undertaking housing projects, including those of LGUs, to
ensure the accomplishment of the goals of the government’s housing program is
reiterated in E.O. No. 20, s. 2001.

One of the main tools used in monitoring and in coordinating is the submission of
reports by these agencies to HUDCC. To serve their purpose, reports, should be
reliable, timely and accurate. Likewise, among the most effective means of
facilitating the effective delivery of the socialized housing program of the
government to qualified beneficiaries and ensuring the attainment of objectives and
national priorities is an evaluation of the performance of the agencies involved in
housing and the monitoring of progress against milestones as well as conduct of
coordinated efforts between and among agencies involved in housing. Improved
assessment will assist in enhancing the consistency, completeness, and comparability
of data.

REGISTRATION OF SOCIALIZED HOUSING BENEFICIARIES

The UDHA defines socialized housing as housing program and projects covering
houses and lots or homelots only undertaken by the Government or the private sector
for the underprivileged and homeless citizens which shall include sites and services
development, long-term financing, liberalized terms on interest payments and such
other benefits as provided in the UDHA. .

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 REPORTING, MONITORING AND COORDINATION

The rules and regulations implementing Section 17 (on the Registration of Socialized
Housing Beneficiaries) of the UDHA mandates the province/city/municipality to
prepare its own consolidated masterlist of beneficiaries for socialized housing. The
masterlist shall be arranged alphabetically and by area of residence and shall include
other critical information such as name of spouse, income, type of tenure, family
size, length of residence in the barangay and/or any other criteria considered relevant
by the local government unit concerned. Such masterlist shall be updated every three
years.

For its part, HUDCC shall consolidate the provincial masterlists into a national
summary containing statistical data necessary for national planning purposes.

The masterlist shall serve as the basis against which prospective beneficiaries shall be
compared to guard against double or multi-awarding of shelter security units and
against units going to unintended beneficiaries.

UDHA PROVISIONS ON SQUATTING SYNDICATES AND

PROFESSIONAL SQUATTERS

The term squatting syndicates refers to groups of persons engaged in the business of
squatter housing for profit or gain. On the other hand, the term professional squatters
refers to individuals or groups who occupy lands without the express consent of the
landowner and who have sufficient income for legitimate housing. The term also
applies to persons who have previously been awarded homelots or housing units by
the Government but who sold, leased or transferred the same to settle illegally in the
same place or in another urban area, and to non-bona fide occupants and intruders of
lands reserved for socialized housing.

Executive Order No. 129 dated 15 October 1993 (Establishing an Institutional

Mechanism to Curtail the Activities of Professional Squatting Syndicates and
Professional Squatters and Intensifying the Drive Against Them) created the National
Committee Against Squatting Syndicates and Professional Squatters to serve as an
oversight, coordinative and recommendatory body relative to the implementation of
the UDHA provisions on professional squatters and squatting syndicates. It also
created a local committee to serve as the implementing arm of the national committee
at the local levels.

The National Committee is chaired by the Secretary of the Department of the Interior
and Local Government with the Chairman of the HUDCC as Co-Chairman. Among
the functions of the National Committee is to oversee and coordinate government
activities relative to the intensified drive against professional squatters and squatting
syndicates and to update the Office of the President and submit reports thereof on the

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 REPORTING, MONITORING AND COORDINATION

implementation of the E.O. One of the functions of the Local Committee, on the
other hand, is to provide the HUDCC and NHA with copies of identified squatting
syndicates and professional squatters.

The list is important in order to ensure their non-inclusion in future

programs/projects and as basis for disqualification in existing programs, since one of
the criteria set under Section 16 of UDHA, to qualify for the socialized housing
program is that the beneficiary must not be a professional squatter or a member of
squatting syndicates. The other qualifications are as follows:

 Must be a Filipino citizen;

 Must be an underprivileged and homeless citizen; and
 Must not own any real property whether in the urban or rural areas.

OBSERVATION

INADEQUACY OF REPORTING, MONITORING, AND

COORDINATION MECHANISMS

2. The socialized housing program of the government could have been

implemented more effectively had reporting, monitoring and
coordination mechanisms of NHA been adequate enough. The real
picture as to whether the housing problem has been alleviated or is
getting worse could not be determined resulting from lack of sufficient,
reliable, accurate, and timely information to properly assess performance
achievement of individual agencies at the operational level and to
provide a sound basis for assessing success of the program at the macro
level.

One of the main tools in monitoring and evaluating agency’s performance

is the submission of reports. To serve their purpose, reports should be
sufficient in form and in substance and should be accurate and timely.

Under Section 13 of the CISFA, the National Shelter Agencies (including

the NHA) are mandated to submit semi-annual reports of their operations,
fund usage and performance to the Office of the President and Congress.
Likewise, under E.O. No. 20 issued on 28 May 2001, the Chairman of the
HUDCC requires the submission of reports and cause the conduct of
management audit, performance evaluation, and inspections to ensure
compliance with the policies, standards and guidelines of HUDCC.

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 REPORTING, MONITORING AND COORDINATION

In compliance with the foregoing directives, the NHA issued several

memoranda embodying the instructions on the type/kind of reports to be
submitted; report format; fill-up instructions; frequency of reporting;
responsible department, unit or office; as well as the delegated authorities.

Scrutiny of sample reports at NHA revealed weaknesses/deficiencies as

follows:

Housing Production Performance Report (particularly on the CMP

projects)

 It did not contain important information such as date of preparation

and submission thereof as well as status of projects;

 There was no indication of when the report was prepared and when
submitted to the Area Management Office (AMO) or to the
Community Relations, Information, and Operations Department
(CRIOD). According to a personnel at the project office, when there
are no changes in the status of the projects, the reports are sometimes
transmitted via fax machine or even by phone;

 There was also no indication of any review of the report and

assessment and evaluation of actual performance; and

 Consolidation of reports at the AMO level was not done. Instead,

according to a staff of the AMO, the reports are forwarded, as they
are, to the CRIOD for consolidation.

 The above report, which is prepared on a monthly basis by the

project offices, is the source of data for review by the respective
AMOs and for assessment and evaluation of performance of said
project offices. The reports are supposed to be consolidated at the
AMO level which in turn forwards the consolidated reports to the
CRIOD for another consolidation.

Sales Report Accomplishment Report vs. Target

Status of Disposition
Community-Based Tenurial Assistance Program (CBTAP) Performance
Report
Awarded and Unawarded Lots
Accomplishment Report on Relocation/Resettlement Operation

 The above reports which are submitted by the different support staff
departments such as CRIOD, the Resettlement and Development
Services Department and the Estate Management Department

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 REPORTING, MONITORING AND COORDINATION

(EMD) to the Corporate Operations Systems Office (COSO) were

not signed by the ones who prepared and/or who verified/certified
them.

Project Status Report (as of June 30, 2002)

 The foregoing report, which is submitted to the Office of the

President thru the HUDCC for the SONA was sent with signed
covering letter only but the report itself was not signed;

 The report did not contain any evidence of review and approval.

Status of Relocation/Resettlement Operation

Housing Production Report
Collection Report (Monthly)

 Submission of the above reports were delayed from 3 to 28 days.

CBTAP Production Report

Award of Residential Lots/Units
Occupancy Status of Unawarded Lots

 The above reports were not submitted for a period of six months,
i.e. from January to June 2002.

Collection Report (Quarterly)

 No report was submitted for the first and second quarters of 2002.

Verification of samples of the consolidated reports at CRIOD for the

period 01 January 2001 to 30 June 2002 also showed that these did not
reflect any information about the NAPICO II project in Pasig City
although this was included in the reports of the project offices. Further
inquiry revealed that once the Purchase Commitment Line (PCL) and
the Letter of Guaranty (LG) were secured by the CA from the
NHMFC, the CRIOD considered the project as “completed”. Thus,
activities done by the Project Monitoring Office (PMO) on NAPICO ll
projects, while included in the PMO reports, were not captured in the
consolidated report prepared by CRIOD.

The PCL is needed for the purchase of property and for the payment of
site development and/or house construction/improvement. It is valid
for a specific period not exceeding six months. The validity period
serves as an allowance for the submission of necessary documents

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 REPORTING, MONITORING AND COORDINATION

before the release of the loan. The NHMFC issues the PCL to the
originator (in this case, to the NHA) after the project and the CA have
passed the criteria for accreditation. On the other hand, the Letter of
Guaranty is issued in favor of the landowner prior to payment of cash.

The team, likewise, observed that the data as to the status of funds for
the Resettlement Program as of 30 June 2002 at the NHA differed
from the data earlier provided to HUDCC by NHA as follows:

In Billion Pesos

Amount Amount
Appropriation Appropriation Covered by Covered by
Agency Per CISFA Per GAA SARO NCA
NHA 5.2000 5.592 5.313 5.301
HUDCC 5.2000 5.763 5.389 4.868

Difference: - (0.171) (0.076) 0.433

Over (Under)

The team gathered that errors were committed in the process of

collation of data at the NHA. The errors would give the impression that
funds (from the point of view of users of HUDCC information) have
not been sufficiently provided for the Resettlement Program when in
fact, the amount released even exceeded the amount provided under
the CISFA. According to responsible officials, preparation/updating
and submission of the said status report to Management, HUDCC and
other agencies shall, henceforth, be the responsibility of the FMD to
ensure consistency of data/reports. They added that the report for
August 2002 already contain reconciled figures but the team was not
able to verify this.

The reliability and integrity of the reports are put to question if:

 they are unsigned;

 they are submitted late;
 evidence of review and approval are missing; and
 reporting systems and methods of calculation are not
consistent

Also, reports which are unsigned, untimely, and inaccurate are

misleading and lose their informative value for effective planning and
decision-making. On the other hand, decisions based on incorrect
information also tend to be incorrect. Likewise, the lack of consistent
reporting and timely information means the information from different
areas may not be calculated the same way. This, in turn, means it
cannot be aggregated to give a picture of the real situation.

20
 REPORTING, MONITORING AND COORDINATION

Thus, the agency and the government would not know whether the
housing problem is being alleviated or is getting worse.

RECOMMENDATION

2.1 The NHA should consider strengthening its reporting mechanisms by

requiring that reports submitted by the project offices are:
 signed so that accountability and responsibility could be
pinpointed more easily;
 submitted early enough so that different users thereof would
be guided in a timely manner;
 sufficient enough to provide all the necessary data in aid to
management planning and decision-making;
 reviewed for correctness and accuracy and evidence of such
review and approval should be present and readily verifiable
to pinpoint responsibility more easily;
 evaluated by the AMO to ensure reliability of data as basis
for consolidation by both the AMO and CRIOD.

MANAGEMENT COMMENT/REACTION

The management comments/reactions, quoted verbatim, and the team’s rejoinders on

the foregoing observations and recommendations are presented below:

Management Comments/Reactions Team’s Rejoinders

CRIOD takes exception to the findings that It is reiterated that the reliability
reports are untimely and delayed. Records and integrity of reports are put to
show that our reports are submitted to question if they are unsigned,
COSO before or during deadlines duly untimely, and inaccurate. They are
validated with concerned operating units. also misleading. In addition, the
While it is true that many of these have reader/user would not know
been sourced through discussions and whether the reports are duly
phone-in conversations with implementors, reviewed without any evidence
we are very confident of the integrity of the thereof on the document itself. As
data given. Many operating units staff have pointed out during the exit
real difficulty in complying to written conference, if the DTS is detached

21
 REPORTING, MONITORING AND COORDINATION

reports and are more at ease at discussing from the report, the record of
these accomplishments during supervisory “complete staff work” including
meetings, which to our intent and purposes review and certification, would be
is more effective as information can be very hard to determine and to
elaborated and clarified during the trace.
discussions.

The reports of other units concerned were

duly covered either by a signed internal
routing slip, memorandum or Document
Tracking System (DTS), which inherently
certify to the principle of "complete staff
work" which include the requisite activities
of review and certification of the reports
they are transmitting.

A reiteration on the signing by the ones who

prepared and/or who verified/certified the
reports, as embodied in the monitoring
report formats and fill-out instructions of
the annual monitoring plans of the NHA,
would be undertaken to fully implement the
requirements of the plan.

The signature of the approving authority on

the report-proper does not appear as we
believe that a signed covering letter was
sufficient enough to submit the
abovementioned report and for that matter
all reports to outside agencies, which were
all based on reports submitted by
responsible departments, units and offices.

When the approving authority affixes his

signature on the covering letter, this carries
the requisite activities of review and
endorsement by department and/or staff
concerned prior to approval of the reports to
be transmitted/submitted to outside
agencies.

However, to conform with the COA The team appreciates

recommendation that would further implementation by management of
evidence complete review and approval of this control as it would greatly
reports transmitted to outside agencies, a enhance the reliability of reports as
section by which the approving authority basis for planning and for
can sign on the last page of the report will decision-making.
henceforth be provided for in our reports.

22
 REPORTING, MONITORING AND COORDINATION

The responsible COSO staff personally

follows up submission of monitoring
reports. Said responsible staff in some
instances also acknowledges receipt of
reports on the receiving/duplicate copies
from source departments or units trying to
beat submission deadlines, without
necessarily logging them in the COSO
logbook of incoming communications. All
reports submitted in this manner, to include
those submitted through the Internet and
diskette-to-diskette updating, shall
henceforth be duly reflected in the COSO
logbook of incoming communications.

23
 Chapter 3

DISPOSITION/DISTRIBUTION

24
DISPOSITION/DISTRIBUTION

EFFECTIVENESS IN THE DISPOSITION/DISTRIBUTION OF

SHELTER SECURITY UNITS

INTRODUCTION

As described earlier, the CMP is a mortgage financing program of the NHMFC

which assists legally organized associations of underprivileged and homeless
citizens to purchase and develop a tract of land under the concept of community
ownership. The primary objective of the program is to assist residents of blighted
areas to own the lots they occupy, or where they choose to relocate to, and
eventually improve their neighborhood and homes to the extent of their
affordability.

The borrower under this program is the CA, which is composed of the
beneficiaries of the loan while the originator is the person to whom the loan and
the mortgage shall pass. The originator shall help the CA to get organized and
registered with the appropriate government agency, document the loan and
mortgage, assist the CA in negotiations with the landowner for the purchase of
the property, and act as the creditor-mortgagee, then assign the rights to the loan
and mortgage to the NHMFC.

As the administrator of the CMP, the NHMFC promulgated rules and

regulations necessary to carry out the provisions of the UDHA specifically on
uplifting the conditions of the underprivileged and homeless citizens in urban
areas and in resettlement areas by making available to them decent housing at
affordable cost, basic services and employment opportunities and on providing
access to land and housing by the underprivileged and homeless citizens. The
NHMFC also established systems and procedures to be followed in processing
0take-outs from the landowners. The systems define the different roles, duties
and responsibilities that the landowner, community association, originator, and
the NHMFC should perform. These systems and procedures are embodied in
NHMFC CC No. CMP-018 issued in 1995.

The NHMFC Inventory as of June 2002 revealed that there are 187 CMP projects
taken out, 23 of which were originated by the NHA. The NAPICO II HOA, Inc.,
which was organized on 25 March 1993, is one of those for which NHA acted as
originator under Memorandum of Agreement (MOA) dated 20 February 1992
entered into by and between NAPICO II HOA, Inc. and NHA. Among the
roles/responsibilities of NHA, as originator, are providing technical assistance to
the association and reviewing and assisting in the final approval of masterlist of
beneficiaries.

25
 DISTRIBUTION/DISPOSITION

In addition to the qualifications under Section 16 of the UDHA, the

Implementing Rules and Regulations Governing the Registration of Socialized
Housing Beneficiaries provides that the applicant/prospective beneficiary must
not have been a beneficiary of any government housing program except those in
leasehold or rental arrangements. To effectively implement the foregoing
provision, there should be a masterlist against which the prospective beneficiary
should be checked. The masterlist shall serve as a tool to be used in the pre-
qualification process for beneficiaries of the housing program of the government
to ensure they have not availed of socialized housing before.

The NHA maintains the so-called Alpha Listing, which is equivalent to the
masterlist of beneficiaries. It is one of the reports generated by the Lot Inventory
System (LIS) maintained by NHA. One of the salient features of the system is
the checking of double awarding starting from the data entry of pre-screened
applicants and his co-owner/s up to the generation of individual Notices of
Award. Transactions involving beneficiary status and lot movement such as
transfer of rights, cancellation of award, and eviction, are, likewise, captured by
the system. Essentially, the purpose of Alpha Listing is to check and control
prospective beneficiaries for possible double or multiple awarding of the
government housing program. The result of pre-qualification of prospective
beneficiaries would indicate whether an applicant:

 has no record of award;

 is an awardee of NHA projects;
 is for confirmation with another/other NHA project/s;
 others.

OBSERVATIONS

NON-CONDUCT OF PRE-QUALIFICATION PROCESS

3. An effective identification of qualified beneficiaries could have been

attained had the pre-qualification process been conducted and had
the CMP beneficiaries been included in the Alpha Listing
maintained by NHA. In turn, the housing program could have
achieved its objective more effectively as it is able to check whether
the shelter unit is being allocated to the right person and whether it
is alleviating the housing problem.

On 14 November 1994, the MMDA, the original owner of the property

subject of the CMP, requested the NHA thru the EMD Alpha Listing
validation of Manggahan Priority Zones consisting of NAPICO I, II,

26
 DISTRIBUTION/DISPOSITION

and III projects. For prospective NAPICO II HOA, Inc. beneficiaries,

the result of such request disclosed that out of the 92 beneficiaries
included in the list submitted by MMDA, one was determined by the
NHA to be an awardee of Karangalan Village Project (KVP) in Cainta,
Rizal, hence disqualified to be an awardee of NAPICO II project.

Interviews conducted by the team with the officials/employees

manning the Project Office at Karangalan Village in Pasig City, where
NAPICO II is located, disclosed that they did not conduct the pre-
qualification process for NAPICO II HOA, Inc. beneficiaries as said
officials/employees are not aware of any NHA policy which requires
them to do so. The officials/employees claimed that the pre-
qualification process was done by the community association. A
review of NHMFC Corporate Cicular (CC) No. CMP-018, likewise,
showed that it does not include a provision requiring pre-qualification
of beneficiaries by NHA as a requirement before approval of the loan
of the community association.

A perusal of Memorandum Circular (MC) No. 757 on the Validation

of CMP List of Beneficiaries with NHA Masterlist of Housing
Beneficiaries issued by NHA on 29 August 1990, a copy of which was
furnished the team only after the exit conference shows that it
prescribes guidelines and procedures to ensure that beneficiaries of
NHA-originated CMP projects have not been previous awardees of
NHA housing assistance. The MC was issued pursuant to the
government policy of limiting housing assistance to one for each
Filipino household and requires pre-qualification of prospective CMP
beneficiaries and inclusion of awardees in the NHA Alpha Listing.

Despite the issuance of said MC, prospective CMP beneficiaries were

not pre-qualified by NHA and awardees were not included in the
Alpha Listing. Thus, the concerns of the audit were not addressed in
that the possibility of double or multi awarding of shelter security units
could not be discounted as the effective identification of beneficiaries
would not be possible without inclusion in the Alpha Listing
maintained by NHA. It could not also be determined whether the units
are going to the right persons and whether the problem on housing is
being alleviated. The unscrupulous activities perpetuated by certain
individuals would not be curtailed, thereby, virtually rendering
nugatory the purpose for which the Alpha Listing was created and
frustrating the efforts of the government in providing shelter to
qualified beneficiaries.

27
 DISTRIBUTION/DISPOSITION

NON-INCLUSION OF CMP BENEFICIARIES IN THE ALPHA

LISTING

The team also noted that the 92 beneficiaries in the MMDA list were not
included in the NHA Alpha Listing as of 31 March 2001, which was the latest
available as of the time the team conducted the verification. It was learned
further that presently, the Alpha Listing is for beneficiaries of NHA-initiated
projects only, although according to the EMD, uploading of few CMP project
beneficiaries was already started in May 2002. The audit, however, was not able
to confirm this.

The effective identification of beneficiaries would not be possible without

inclusion in the Alpha Listing maintained by NHA. If a beneficiary could not be
traced in said listing, it would not be possible to detect whether the beneficiary
has already availed of the program before. This would virtually render nugatory
the purpose for which the Alpha Listing was created.

ABSENCE OF COORDINATED AND COMPREHENSIVE

APPROACH FOR MAINTAINING LIST OF BENEFICIARIES

4. There is no coordinated and comprehensive approach for

maintaining a list of beneficiaries who are eligible to avail
themselves of the socialized housing program or have actually done
so. As a result, double or multi-awarding of shelter units could not be
detected and unscrupulous activities perpetrated by individuals and
groups could not be curtailed which may result in the frustration of
the government’s efforts in solving the housing problem.

For effective identification of beneficiaries, the NHA has an

application software, the LIS where one of its salient features is the
checking of double awarding. The system facilitates recording,
updating of beneficiary status and lot movement. It is also capable of
generating reports, one of which is the Alpha Listing of beneficiaries.

As stated earlier, the Alpha Listing, which is equivalent to a masterlist

of beneficiaries, is maintained for the purpose of checking and
controlling prospective beneficiaries for possible double or multiple
awarding of government housing programs. Availment of the Alpha
Listing is facilitated through Request for Pre-qualification, where,
among others, prospective applicants will be detected whether or not
he is an awardee of a government housing program. Other government

28
 DISTRIBUTION/DISPOSITION

agencies or institutions involved in housing program can only avail of

such facility upon request. As such, the Alpha Listing is not made
automatically available, i.e., upon NHA’s own initiative, even to the
HUDCC, which is the highest coordinating body for urban and
housing development.

The main purpose for which the Alpha Listing was created, i.e., to
preclude double or multiple awarding of shelter units, would not be
totally achieved unless the other government housing and other
agencies would be furnished a copy of the Alpha Listing for their
reference and guidance. Without the said listing, the process of
determining whether a beneficiary has already availed of the benefit
earlier to preclude him from further availing of the same benefit in the
future would be too tedious. When a beneficiary has availed of more
than one socialized shelter unit, the program of government would be
hampered as benefits that should have been enjoyed by other qualified
beneficiaries could not be availed of by them. Funding, insofar as it
relates to the equivalent cost of the extra shelter unit, is also affected.

For its part, if the HUDCC were not provided with the listing, it, and in
turn the government, would not be able to monitor whether the shelter
unit is going to the right person and whether it is alleviating the
housing program.

RECOMMENDATIONS

ON NON-CONDUCT OF PRE-QUALIFICATION PROCESS

3.1 The NHA should consider:

 Ensuring a coordinated approach in the pre-qualification by

NHA of CMP beneficiaries and in the inclusion thereof in the
Alpha Listing. Specifically, NHA should ensure that the pre-
qualification process is coordinated with all agencies involved in
housing to ensure that only those qualified for the program
could avail of it and that they avail of it only once.

 Providing the HUDCC as the overall coordinative body on

housing, with copies of the policies for its guidance in the
planning and decision-making processes. These policies would
include memoranda and circulars prepared by the NHA, for

29
 DISTRIBUTION/DISPOSITION

instance, on pre-qualification requirements and procedures, on

the maintenance of masterlist of beneficiaries, on the
measurement of performance or accomplishments, and other
policies.

 Disseminating the policy to all concerned personnel and

explaining same to them for proper and effective implementation
thereof.

 Including all beneficiaries of the housing program of the

government in the Alpha Listing, whether they be for NHA-
initiated projects or not and whether they be for CMP projects or
some other housing program of the government.

 Updating the Alpha Listing from time to time to serve its purpose
and to be able to serve as a good basis for decision-making.

MANAGEMENT COMMENT/REACTION

The NHA relayed their agreement on the importance of the pre-qualification

process, the conduct of occupancy check, and the build up of Alpha List of CMP
beneficiaries. Management stated that they shall prepare a modification of the
present system to incorporate the above processes. The other comments of NHA
and the corresponding rejoinders of the team are shown below.

Management’s Comments Team’s Rejoinders

Recommend that management The team appreciates the initiative

issue a directive reiterating taken by the NHA management in this
compliance to MC 757 by all regard.
concerned units.

The NHA may not be the This is not in consonance with the
appropriate office to carry out pre- provisions of the NHA MC No. 757
qualification. NHA's Alpha Listing which requires pre-qualification of
is limited to beneficiaries/awardees prospective CMP beneficiaries and
of NHA only. inclusion of awardees in the NHA
Alpha Listing.

The task can best be done by the This is included in the team’s
HUDCC as it can require the recommendation on the absence of
shelter agencies to submit the list coordinated and comprehensive
of beneficiaries of their respective approach in the maintenance of a list of
programs. The consolidated list beneficiaries below.

30
 DISTRIBUTION/DISPOSITION

can become HUDCC's reference in

determining new housing
applicants qualified for an award.
The HUDCC may create its own
EDP (similar to that of GSIS, SSS
etc.) for this purpose.

NHA recommends that NHMFC, This should be done by the NHMFC in

as the policy making body of the coordination with HUDCC as the
CMP, incorporate in its guidelines overall coordinative body on housing.
the requirements on pre-
qualification and inclusion of CMP
beneficiaries in a Masterlist, and
the identification of the
participating agency/ sector
responsible for said activities for
implementation by all CMP
participants (e.g. originators,
community associations).

ON ABSENCE OF COORDINATED AND COMPREHENSIVE

APPROACH FOR MAINTAINING LIST OF BENEFICIARIES

4.1 The NHA should consider providing HUDCC with a copy of the
Alpha Listing to serve as tools not only for planning and decision-
making but also for monitoring and coordinating purposes, HUDCC
being the highest policy making body insofar as the housing program
of the government is concerned. This would contribute to the
maintenance by HUDCC of a complete central file of all awardees
for the government housing program, whether or not it is
implemented by NHA. This central file would serve as the overall list
against which beneficiaries could be verified primarily by any agency
involved in housing.

MANAGEMENT COMMENT/REACTION

The NHA management agreed with the team’s recommendation and stated that
effective implementation of the "one-award" policy of government will require
establishment by HUDCC of an integrated Masterlist or Alpha Listing of all
beneficiaries of government housing assistance. They added that HUDCC as the
highest coordinating body can establish an inter-agency information system and
develop linkages for information sharing among all agencies providing housing

31
 DISTRIBUTION/DISPOSITION

assistance. The proposed Masterlist should include not only the beneficiaries of
shelter agencies but also all other agencies providing housing assistance (e.g.
PEA, Bases Conversion Development Authority, Department of Public Works
and Highways, Social Security System, Government Service Insurance System,
LGUs).

32
CHAPTER 4

Occupancy

33
OCCUPANCY

ACTUAL OCCUPANCY OF SHELTER SECURITY UNITS BY

INTENDED BENEFICIARIES

INTRODUCTION

The NAPICO II HOA, Inc. was organized on 25 March 1993 so that it could
avail of the benefits under the CMP of the government. The borrower under this
program is the community association (in this case, the NAPICO II HOA, Inc.),
which is composed of the beneficiaries of the loan. The NAPICO II HOA, Inc.
is one of those for which NHA acted as originator under the MOA entered into
by and between the parties on 20 February 1992. A parcel of land situated in the
city of Pasig and originally owned by the MMDA was eventually awarded to
the association.

On 24 June 1999, the NHA General Manager, under Board Resolution No.
4118 was authorized to enter into a MOA for the acquisition of 10,000 housing
packages for families to be relocated from the Pasig River. For this purpose,
several Deeds of Absolute Sale were entered into by the NHA with New San
Jose Builders, Inc. (NSJBI), a private developer, for the period 10 August 1999
to 14 December 2001 for the acquisition of 9,915 housing packages.

The resettlement site for these housing packages is in the Municipality of

Rodriguez, Province of Rizal. The project, which includes land development
and construction of housing units, is initially called Kasiglahan I. It was later
known as Kasiglahan Village I composed of San Jose Plains I and Sub-Urban.
The project was intended for dislocated families totaling 4,892 living along the
Pasig River bank which traversed the Cities of Manila, Mandaluyong, Makati,
Pasig and Quezon and the municipalities of Pateros and San Juan all in the
Metro Manila area. To implement the intention of providing the Kasiglahan
Village I as resettlement site for the Pasig River relocatees, the NHA was
supposed to enter into a MOA with the Pasig River Rehabilitation Commission
(PRRC). To date, however, said MOA, which outlines the roles and
responsibilities of both parties in the contract, remain unsigned. According to
NHA Management, the acquisition cost was directly remitted to NHA by DBM
not to PRRC, hence the MOA was no longer required.

34
 OCCUPANCY

OBSERVATIONS

OCCUPANCY BY UNINTENDED BENEFICIARIES

5. The government’s CMP could have fully contributed to the

government’s objective of providing shelter security units to the
targeted low-income group had the NHA conducted occupancy
check to verify occupancy of the units by unintended beneficiaries.

Among the duties of NHA, as originator, under the MOA entered into in 1992
with NAPICO II HOA, Inc., are the following:

 Supervise and provide technical assistance to the association;

 Assist in the formation of community association among its
intended beneficiaries; and
 Review and assist in the final approval of masterlist of lot
awardees.

From the inception of NAPICO II, the MMDA had issued Resolution No. 41 s.
1990 dated May 1990, and by way of disqualification, has set the conditions by
which occupants/applicants may become a beneficiary. Among these are the
following:

 Homeowners who have leased their houses in the area are

disqualified;
 Those who have disposed of and/or transferred their rights and
the transferees are automatically disqualified; and
 Sale of rights is prohibited. Violation of this condition shall be
a ground for the cancellation of the award (par 4, Nos. 3,4 10).

However, the survey-interview on 30 occupants of NAPICO II representing 22

percent of the 135 total beneficiaries, disclosed that:

 One has half of the house leased for P2,500.00 monthly, while
one is a lessee for P3,000 monthly;
 Three assumed the loan from previous owner; and
 Five occupants acquired ownership by buying the rights over
the property.

As the audit was constrained by time and legal processes, it was not able to
obtain evidence of the lease, the assumption of the loan, or the transfer of the
rights over the property.

35
 OCCUPANCY

Interviews with project office personnel disclosed that there was no regular
monitoring and evaluation of the actual occupants of the awarded units
inasmuch as they believe that it is not their responsibility but that of the
community association. In view of this lack of monitoring system at the Project
Monitoring Office level, NHA failed to detect the above-cited irregularities in
the occupancy of the shelter units by unauthorized persons.

While the duties of the NHA under the MOA with NAPICO II HOA did not
specifically state monitoring of occupancy of shelter units, this should have
been a necessary activity as an offshoot of its duty to review and assist in the
final approval of masterlist of lot awardees. Had proper monitoring been strictly
exercised by NHA as the originator of the CMP, outright selling/leasing of
awarded shelter units could have been avoided and/or detected. Early detection
would result in disqualification of unauthorized homeowners and cancellation
of awards per the MMDA Resolution. This could, in turn, enable the
government to award the units to other intended beneficiaries, thereby reducing
the backlog on the socialized housing program and contributing to the
attainment of the government’s objective of providing shelter security units to
the targeted low-income group.

UNDISTRIBUTED/UNOCCUPIED UNITS AND NON-INCLUSION

OF RESETTLEMENT PROGRAM BENEFICIARIES IN THE
ALPHA LISTING

6. The government's efforts to solve the housing problem was

hindered by the presence of at least 4,292 housing units which
remained undistributed and/or unoccupied at the resettlement site
and the non-inclusion of occupants in the Alpha Listing.
Management advised that the non-occupancy was primarily due to
the government's failure to provide resources that would address
the basic social needs of beneficiaries. Thus, the units, although
produced, could not be translated into actual alleviation of the
housing problem.

UNDISTRIBUTED/UNOCCUPIED UNITS

Board Resolution No. 4118 issued by the NHA on 24 June 1999 authorized the
General Manager to enter into a MOA for the acquisition of 10,000 housing
packages for families to be relocated from the Pasig River. For this purpose,
several Deeds of Absolute Sale were entered into by the NHA with New San
Jose Builders, Inc. (NSJBI), a private developer, for the period 10 August 1999

36
 OCCUPANCY

to 14 December 2001 for the acquisition of 9,915 housing packages. The

resettlement site for these housing packages is in Rodriguez, Rizal. The project,
which includes land development and construction of housing units, is initially
called Kasiglahan I. It was later known as Kasiglahan Village I composed of
San Jose Plains I and Sub-Urban. The project was intended for dislocated
families living along the Pasig River bank.

Despite the fact that the shelter security units were awarded to various
beneficiaries, some are not yet occupying their units at the resettlement site in
Rodriguez, Rizal. Based on the report of the Project Office as of 30 June 2002,
there are 5,623 occupied units, while 4,292 are still unoccupied as follows:

Occupied Unoccupied Total

San Jose Plains I 4,825 1,661 6,486

Sub-Urban 798 2,631 3,429
Total 5,623 4,292 9,915

An interview made of the selected beneficiaries in San Jose Plains I and Sub-
Urban revealed several complaints as follows:

 Irregular and non-potable water supply, supplied by the

developer (provision for water is being handled by the
developer);
 Absence of livelihood opportunities at the vicinity of the
relocation site;
 High cost of transportation;
 Unaffordable monthly rental considering their economic status
(some are senior citizens whose children are without income);
 Lack of basic social facilities such as classrooms, hospital,
church, etc.
The protracted delay in the disposition of housing units will not maximize the
cost put into the production thereof. Moreover, if the remaining units allotted
for PRRC relocatees remained unoccupied, these would be exposed to further
deterioration. In addition, this would result in unnecessary wastage of
government funds and property and would cost the government additional
funding to cover repairs and maintenance of the units.

The non-observance of the provisions of Section 21 of the UDHA, which states

that socialized housing or resettlement areas shall be provided by the LGU or
by NHA, in cooperation with private developers and concerned agencies, the
following basic services and facilities, among others: (a) potable water, and (b)
access to primary roads and transportation facilities, also led to non-occupancy

37
 OCCUPANCY

of the units by the owners and which ultimately led to a breakdown of the
objective of the housing program of the government.

The NHA management confirmed that relocation activities were put on hold
due to the absence of adequate basic facilities (water and power) as well as
livelihood opportunities in the site.

NON-INCLUSION OF OCCUPANTS IN THE ALPHA LISTING

At the time of the audit, a total of 4,840 beneficiaries who are resettled at San
Jose Plains appear in the Alpha Masterlist of Relocated Families maintained by
the Project Office. For purposes of verifying whether these beneficiaries are the
actual occupants and whether they are included in the Alpha Listing maintained
by the EMD of NHA, the team sampled 101 families equivalent to at least 2
percent of the total. The samples were chosen from the Masterlist at intervals of
48 starting from the first name therein. Out of the 101 samples, only 72 were
interviewed because at the time of the visits, the housing units were either
padlocked or the owners were in the province or out for work. The team was
not able to determine occupancy by the beneficiaries included in the Masterlist
mainly due to time constraints and the tediousness of the process of verification.
However, the team noted that the 72 sample families are not included in the
Alpha Listing maintained by the EMD of NHA.

On the other hand, in the Sub-Urban project, there are 800 beneficiaries
included in the Alpha Masterlist of Relocated Families. The team sampled 16
families or 2 percent of the population, chosen from the Masterlist at intervals
of 50 beginning from the first name appearing therein. The above sampled
families are, likewise, not included in the EMD Alpha Listing of Beneficiaries
as of 31 March 2001.

If beneficiaries are not included in the EMD Alpha Listing, double or multiple
awarding of shelter units could not be detected and unscrupulous activities
perpetrated by individuals and groups could not be curtailed. In turn, this may
result in the frustration of the government’s efforts in solving the housing
problem.

38
 OCCUPANCY

RECOMMENDATIONS

ON OCCUPANCY BY UNINTENDED BENEFICIARIES

5.1 The NHA’s role as originator should not be limited to assisting in

the formation of community associations and providing technical
assistance to them but should, likewise, include monitoring of the
occupancy status of project beneficiaries as an indispensable
activity after reviewing and assisting in the approval of the
masterlists. This would ensure that those who were previously pre-
qualified as beneficiaries are the same persons who are occupying
the shelter units.

Moreover, as implementer of the socialized housing program of the

government and as originator of the NAPICO II project, NHA
should take it upon itself to inform officials concerned of any
violations for imposition of appropriate sanctions. Specifically, it
should give feedback to the HUDCC, as the overall coordinative
body on housing, so that HUDCC could take appropriate action in
a timely manner under the circumstances.

MANAGEMENT COMMENT/REACTION

The comments of management on the audit recommendations and the

team’s rejoinders are presented below.

Management Comments Team’s Rejoinder

The Community Mortgage and other Community- As the sole government agency engaged in
Based Tenurial Assistance Programs spouse direct shelter production, and in order for
partnerships with Community the NHA to effectively carry out the
Associations/organized groups which are considered purposes and objectives for which it was
capable of policing their ranks in the pursuit of created, it is incumbent upon it to monitor
program integrity. Hence, the responsibility of distribution to and occupancy by intended
monitoring the use of the awarded areas rests on beneficiaries of shelter security units.
them. The memo of agreement for CBTAP gives the Presidential Decree No. 757 issued on 31
responsibility of beneficiary selection and July 1975 directs the NHA to provide and
substitution to the CA. Since the responsibility of maintain adequate housing for the greatest
collection from individual beneficiaries also belong possible number of people. This will not
to the CA. be attained without monitoring occupancy
by qualified beneficiaries.
Moreover, this is an effective means of
contributing to the attainment of the
government’s efforts of solving the
housing program.

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 OCCUPANCY

Coordination with the CAs in this regard

While the NHA conducts periodic occupancy
could be done.
checks/LIS the increase in projects and limited
manpower have prevented NHA from performing
the task even in its regular production because these
tasks are now incorporated among the tasks of the
community partners.

Occupancy check and updating of the alpha listing As discussed in the topic on
can best be done by community association as this is Distribution/Disposition, the Alpha
their basic role. The NHA and all other originators Listing was established and maintained by
can provide technical assistance to enhance the NHA. It is but logical that updating be
community association's capability in these areas. done by it.

ON UNDISTRIBUTED/UNOCCUPIED UNITS AND NON-

INCLUSION OF RESETTLEMENT PROGRAM BENEFICIARIES
IN THE ALPHA LISTING

6.1 The NHA should consider:

 Involving the local government units and other

government agencies such as the Department of Labor and
Employment, Department of Education, Department of
Health, and the Department of Social Welfare and
Development, among others, in the conceptualization of the
resettlement project so that the basic social services and
employment opportunities shall be appropriately considered
and put in place before the relocation takes place. This
would encourage the beneficiaries to live in the resettlement
sites. Thus, the housing program of the government would
be more effective.

 Including all beneficiaries of the housing program of the

government in the Alpha Listing, whether they be for NHA-
initiated projects or not and whether they be for
Resettlement Program projects or some other housing
program of the government.

 Updating the Alpha Listing from time to time to serve its

purpose and to be able to serve as a good basis for decision-
making.

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 OCCUPANCY

MANAGEMENT COMMENT/REACTION

The NHA management commented that for unoccupied units with approved
allocation, pre-qualification against Alpha Listings is in progress and some are
just waiting for the lifting of the suspension of relocation to Kasiglahan Village
I issued by Mayor Cuerpo due to inadequate community facilities to be
provided by PRRC. Other comments of management are shown below.

Management Comments Team’s Rejoinder

NHA is not the lead on relocation. As stated in the audit

Relocation function specifically the recommendation, this should be
actual removal is vested in the LGUs. done in coordination with the LGU
concerned. The comment of
management in the last sentence
affirms this.
The political will of the LGU to pursue
relocation is a major factor in the
resettlement endeavor of government.
Being coordinated with PRRC and the
Local Government of Rodriguez to
resume relocation activities in KV-1.

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 Submitted in compliance with COA Assignment Order No. 2002-
020 dated 18 July 2002.

JULITA D. PERALTA MERCEDES E. CALERA

Team Member Team Member

ROSAVILLA C. TAN IRMA S. BESAS

Team Member Team Member

ADELINA L. ANCAJAS ISABEL D. AGITO

Team Member Team Member

CAROLINE D. IDOS
Director III
Team Supervisor

Noted by:

ILUMINADA M.V. FABROA

Director IV
Management Services

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