Liquidated Damages: 7 Possible Audit Findings to Avoid

1. Not imposing liquidated damages despite delay in the implementation of project.

(Compliance and Value for Money Audit, Bicol University, 2017)

2. Not imposing liquidated damages despite delay in the delivery of equipment procured.

(Audit on the Accounts and Operations of the Municipality of Maribojoc, Bohol, 2014)

3. Liquidated damages (LD) imposed on suppliers were not in accordance with the terms and conditions of the purchase order resulting in uncollected revenue.

(Audit of the Accounts, Transactions and Operations of PPPI, 2016)

4. Failure to impose liquidated damages for the delay incurred by the contractor.

(Financial and Compliance Audit, CAAP, 2017)

5. Liquidated damages were not imposed on Contracts that incurred delays due to grant of contract time extensions, the validity of which could not be ascertained due to inadequate evaluation and incomplete documentation.

(Annual Audit Report, NIA, 2016)

6. Failure to recognize receipt of liquidated damages in the books of accounts.

(Audit of Accounts and Operations, ZCSEZA, 2019)

7. Non-collection of liquidated damages.

(Financial and Compliance Audit, Province of Marinduque, 2009)