Do EAO funds justify its reason for being?

As floodwaters continue to rise around the country, so too does the tide of public frustration with how government funds—especially those intended for infrastructure—are being handled.

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This week, the Senate has placed under the microscope the Engineering and Administrative Overhead (EAO) fund of the Department of Public Works and Highways (DPWH), a fund—as high as 3.5 percent—set aside from projects that cost P1 million or above.

The EAO is not something new. It is a longstanding but largely overlooked budgetary item not limited to the DPWH. This is why scrutiny on the utilization of EAO should not be limited to the DPWH and President Marcos Jr.’s administration.

As early as 1984, the EAO already existed in the national budget and intended to cover the indirect costs necessary to implement infrastructure projects effectively and ensure their quality. It is meant to fund project monitoring, evaluation, technical audits, and administrative support—functions that, in theory, safeguard the public against substandard and fraudulent projects.

But theory has a way of being twisted in practice.