More fun? Inefficiencies in Teo’s DOT term raise audit red flags

Lian Buan
More fun? Inefficiencies in Teo’s DOT term raise audit red flags
The 2017 audit report of the Department of Tourism (DOT) is rife with delayed projects, deficient planning and multi-million projects that went unmonitored and cannot be measured for their worth

MANILA, Philippines – Former tourism secretary Wanda Teo spent hundreds of millions for the country’s tourism campaign, from an expensive marketing plan to trade shows and other events, but the Commission on Audit (COA) found the projects to be either inefficient or deficient.

After almost two years at the helm of the DOT, Teo resigned in May this year following the controversial DOT-PTV advertisement deal which paid a big cut to the independent production outfit of her brother Ben Tulfo. The DOT’s 2017 audit report showed the ads deal was just one of the many issues.

In a statement on Thursday, July 12, Teo said that she is prepared to answer “all allegations in the proper forum.”

“My conscience is clear. I am confident that during my stint as Department Secretary, I did not commit or knowingly allow any violation of the Anti-Graft Law, or any other law for that matter,” Teo said. 

No monitoring

State auditors said they cannot assess the worth of P847 million worth of tourism programs because they have no indicators.

The DOT funded local projects like an English language program, cruise ships, scuba diving and other marketing campaigns in line with the ‘It’s More Fun in the Philippines’ in the Philippines campaign.

The DOT claimed that data of tourist arrivals are sufficient indicators for the success of the projects, but COA did not agree saying “it only aims to identify the long term benefit of the project, but not its short term benefits.”

COA looked for other indicators like increased tourism revenue and employment opportunities.

“Absence of specific performance indicators that directly measure the physical performance of each Programs, Activities and Projects would prevent the determination of the actual contribution and sustainability of the project,” said COA.

In 2017, the DOT released P605 million worth of cash advance to tourism officers based overseas to fund Philippine programs in 8 countries.

However, there was no oversight body that monitored whether targets were being met. Some of these events include an aviation expo, dive shows, tourism markets and the famous Madrid Fusion food event.

“Given the considerable funds being spent for Philippine Tourism Office (PTO) operations, adequate monitoring and supervision should be conducted to enable the agency to determine the current status of PTO Programs, Activities and Projects (PAPs), identify which activities should be prioritized, and assess whether the PAPs of PTOs were efficiently and effectively achieved and the expected benefits were gained out of money spent by the government,” said COA.

The COA also questioned P271 million or 42% of the total cost of the contract with advertising firm McCann Worldgroup Philippines for the tourism campaign “Experience the Philippines.”

“There were inconsistencies in the payment scheme and details of billing invoice with the contract provisions under Section 53.5(a) of the Special Conditions of the Contract (SCC),” said COA.

Some documents were also lacking, such as financial and physical performance reports. No success indicators were also set to determine whether the objectives of the advertising campaigns were achieved,” COA added.

The DOT terminated its contract with McCann in June 2017 over allegations that one of the commercials the firm created was plagiarized.

Wanting LGU involvement in cruise tourism

While auditors commended that the cruise tourism promotion of the DOT increased arrivals  from 11% to 125% per port call and 23% to 238% per number of passengers, those who benefited were only select tour operators.

Tour operators such as Travel People Ltd. Inc, Baron Travel and Sharp Travel Service arranged for the cruise passengers to visits tourist destinations while the ship docks. (READ: COA flags P19 million travel allowances of DOT officials)

“The welcome/send-off reception activities could be further enhanced through the active participation of other tourism stakeholders, such as Local Government Units within the National Capital Region,” said COA.

Wise use of money?

The DOT granted P19.5 million worth of sponsorships to non government organizations (NGOs) and People’s Organizations (POs).

We recognize the agencies generosity in providing assistance to the said NGOs/POs; however, we noted that there are no written specific rules and/or guidelines that set a threshold on the amount of financial assistance to be granted and the minimum criteria to determine the necessity of the financial support and the tourism benefits that the DOT will derived therefrom,” said COA.

In reverse, the DOT also charged participation fees from its events all throughout the year. In total, they were able to collect P3.7 million, but because there were no standards followed, “there is no assurance that the appropriate amount of fees were equitably imposed on all participants and collected as additional resources of the government.

The COA also said it cannot determine the economic viability, sustainability, and effective utilization of P428 million worth of of Bottom-Up-Budgeting (BUB)-funded projects because of delayed implementation.

The projects date back to 2014, and yet, only 65% have been completed, 24% are ongoing while the rest were not implemented. 

Several factors contributed to the delays, such as the LGU not being ready for the projects, as well as a lack of monitoring, coordination, and targets.

All in all, these resulted to only a 59.96% disbursement rate for the agency, “which indicates a significant decline in the physical delivery of target projects and activities.”

Of its P3.7 billion budget, only P2.061 billion was spent in 2017. “This indicates that Management was not able to effectively manage the increasing amount of funds entrusted to the agency,” said

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Lian Buan

Lian Buan covers justice and corruption for Rappler. She is interested in decisions, pleadings, audits, contracts, and other documents that establish a trail. If you have leads, email or tweet @lianbuan.