The Commission on Audit (CoA), the Philippines' supreme audit institution whose findings government agencies are expected to act on, has flagged P10.77 billion in uncollected obligations from solar developers, along with P1.17 billion in doubtful fund transfers and P1.60 billion in unpaid contractor training fees at the Department of Energy (DoE), according to its 2025 annual audit report.

State auditors said delays in contract processing, project defaults, and cancellations under Solar Energy Operating Contracts — the service contracts under which the DoE authorizes private developers to carry out solar projects — posed risks to government revenues and potential power generation capacity.

CoA recommended that the DoE exhaust administrative and legal remedies to recover the outstanding obligations, enforce sanctions against defaulting contractors, and review the policies governing solar service contract awards to minimize cancellations.

The audit body also flagged P1.17 billion in fund transfers to other government agencies, citing accounting discrepancies and long-unliquidated balances. Auditors cited a P599.95-million unreconciled variance between DoE records and those of implementing agencies, as well as P101.97 million in fund transfers that remained unliquidated for 10 to more than 40 years.

The DoE likewise failed to collect P1.60 billion in Training Commitment and Development Assistance from conventional and renewable energy contractors because of irregular billing, state auditors said. That amount consisted of P1.18 billion from conventional energy contractors and P417.18 million from renewable energy contractors. Another P491.16 million was at risk of non-collection due to terminated service contracts.

CoA directed the DoE to send demand letters, issue billing statements to 1,688 contractors, and coordinate with the Office of the Solicitor General to pursue collection cases — steps that will show whether audit findings translate into actual recoveries for the government.

The audit body also raised concerns over gaps between the DoE's targets and actual accomplishments, saying, "[t]here is an unusually wide gap between the targeted and the actual accomplishments." Renewable energy accounted for 36% of total energy supply in 2025, above the 33.2% target, while renewable energy investments grew 76%, exceeding the 48.7% target.

Despite the findings, CoA rendered an unmodified opinion on the fairness of presentation of the DoE's 2025 financial statements, indicating the auditors concluded the figures were fairly presented.

As of Dec. 31, 2025, unsettled disallowances stood at P199.61 million, while outstanding audit charges reached P186.70 billion. Of 62 prior-year audit recommendations, 36, or 58.06%, were fully implemented — a figure that offers a baseline for the DoE's follow-through on the current findings in CoA's next annual report.

Reporting by Pexcel John Bacon; source: BusinessWorld