Duty Free PH asked to explain COA fund misuse findings

The board of state-run Duty Free Philippines Corp. may not receive their performance incentives if they could not “properly” explain recent Commission on Audit findings showing anomalies involving resigned Tourism Secretary Wanda Tulfo-Teo and the tourism department’s misuse of its share of profits last year, the Governance Commission for Government Owned or Controlled Corporations (GCG) said Friday.

“The GCG has sought the explanation of Duty Free Philippines on the fiscal year 2017 findings of the Commission on Audit. Duty Free Philippines is likewise directed to address said COA findings under the performance evaluation system (PES) of the GCG,” the body overseeing state-run firms said in a statement.

Action plans

The PES requires all government-owned and/or -controlled corporations (GOCCs) “to present concrete and time-bound action plans for addressing all COA findings,” the GCG noted.

As such, the PES mandated Duty Free Philippines to address the recently released audit report on alleged misuse of its funds, the GCG said.

“Failure to properly address such findings will render Duty Free Philippines’ board ineligible from receiving the 2017 performance incentives even if [the agency] achieves its 2017 performance targets,” according to the GCG.

“Duty Free Philippines, and all GOCCs for that matter, must be reminded that Republic Act (RA) No. 10149 or the GOCC Governance Act of 2011, has constituted all directors, trustees, and officers as ‘fiduciaries of the state,’ with the ‘legal obligation and duty to always act in the best interest of the GOCC, with utmost good faith,’” the GCG said.

Extraordinary diligence

Also, GOCCs “must exercise extraordinary diligence in the conduct of the business and in dealing with the properties of the GOCC using the utmost diligence of a very cautious person with due regard for all the circumstances,” it added, citing Section 19 of RA 10149.

To recall, the COA said almost P2.52 million worth of duty-free goods were ordered withdrawn by Teo and Tourism Undersecretary for Administration and Special Concerns Rolando Cañizal last year.

The goods included P2.17 million worth of luxury items and appliances and 277 items worth an additional P346,446.80, which were pulled out from Duty Free Philippines without being recorded in the government corporation’s books.

The GCG said it “exercises its oversight functions on GOCCs’ operations primarily through performance monitoring and evaluation.”

Mandate

“Pursuant to RA 10149, the GCG is mandated to conduct performance evaluation of GOCCs in relation to their performance scorecards. Meanwhile, audit of GOCC operations in terms of their financial transactions are carried out by the COA. Findings such as those on DFPC are obtained during these audits by COA,” it explained.

“To further complement the audit of COA, the GCG has begun the conduct of quarterly validation of GOCC accomplishments in relation to their performance scorecards to intensify the performance monitoring of GOCCs. This is in addition to the regular annual performance evaluation being executed by the GCG,” it said.

“While the GCG recognizes the limitations in its mandate, it continues to exercise its power over the GOCCs under its jurisdiction to the fullest extent permitted by its charter,” it added.