The Commission on Audit (COA) said the Development Bank of the Philippines Leasing Corporation (DBPLC) suffered losses when three units of leased heavy equipment showed signs of damages and deterioration after they were kept in the premises of the defaulting lessee after voluntary surrender. In its annual audit report, COA said that DBPLC leased three equipment -- Caterpillar Soil Compactor, Caterpillar Motor Grader, and Caterpillar Wheel Loader. The lessee defaulted in his lease amortization payments covering the years 2018 and 2019, he executed an Affidavit of Voluntary Surrender (AVS). While the heavy equipment were voluntarily surrendered to the DBPLC, they were kept within the premises of the defaulting lessee in Barangay Malbayo, Morong, Bataan. Unfortunately, they were not properly safeguarded and even showed traces of physical damage, COA said. Out of the three equipment, COA’s audit team found that the Motor Grader and Wheel Loader "manifested signs of significant depreciation, arising from extensive utilization and operations." The Wheel Loader even had a broken glass window at the left side of the operator's seat, and the caretaker explained that it was because a galvanized iron sheet hit the glass window during the onslaught of Typhoon Paeng, COA said. It also said that there were visible scratches on the Wheel Loader that was "indicative of its actual utilization." The ladder leading up to the driver's seat of the Motor Grader was also broken, it said. "Considering the nature of the lease transaction and the repossession of the leased assets through voluntary surrender arrangement with the lessee, the leased assets are undoubtedly owned by DBPLC for which the right to use and dispose, including risk of loss and damages, accrue to the DBPLC," the COA said. "Keeping the leased assets within the premises of the defaulted lessee for reasons such as the difficulty and cost involved in transporting the assets to another location, without periodic monitoring by DBPLC personnel on the fulfilment of the commitment by the lessee to provide physical safeguards such as protective covering over the leased assets, does not provide full protection on the interest of DBPLC," it said. It recommended that the DBPLC coordinate and require to provide additional physical safeguards to protect the repossessed properties from theft and other events. While the properties are kept within the lessee's premises, the COA said that the DBPLC should consider the issuance of a supplemental document signed by both properties specifying the prohibition on the use of the properties and imposing liability in case of unauthorized use. The COA added that the DBPLC should revisit its Manual of Operating Procedures and include a detailed policy on safeguarding all repossessed assets for lease such as non-maritime assets in order to avoid similar incidents in the future.