COA flags deficiencies in Heart Center lease contracts which are disadvantageous to the government

A number of medical consultants and specialists occupying clinics and offices at the Philippine Heart Center in Quezon City are without valid lease contracts, have placed government in a disadvantageous position of not earning the correct rent for the said rooms.
 
The Commission on Audit (COA) disclosed that there are 69 rooms with a total area of 2,466 square meters that do not have updated or valid contracts with those occupying the spaces.
 
“The non-execution/non-renewal by PHC of lease contracts with various lessees is contrary to COA Circular No. 88-282-A dated March 3, 1988,” COA said in the latest annual audit report for the state-run specialty hospital.
 
Auditors also noted that some lessees have not been complying with provisions of existing lease contracts, thus, resulting in unbilled revenues and lost opportunity to the PHC.
 
PHC records submitted to audit examiners indicated that new and renewal lease contracts were not made with the occupants of leased rooms, nearly all of them medical specialists and consultants who earn professional fees from admitted or out-patients.
 
According to COA “most of the contracts” of lease were executed as far back as 2009 and were not renewed until 2019.
 
“Despite lessees continuous use of the rooms, the PHC and the medical practitioners and consultants disregarded the perfection of new lease agreements immediately after the expiration of the previous contract,” COA noted.
 
Aside from the lack of perfected contract, some lessees have incurred delays in the payment of their monthly rentals and utilities.
 
“Delayed payments of rent and utilities deprived PHC of the use of funds for its programs/projects,” auditors said.
 
Further, COA noted that there is no provision in existing lease contracts that will provide for increase or escalation of rent.