The Commission on Audit (COA) has called out the Department of Tourism (DOT) for its failure to use nearly half its funds for 2016.
The DOT blamed this on a “hiatus” brought about by a leadership change following the May 2016 national elections.
In its annual audit report, COA said P1.52 billion, or 41.55 percent of the DoT’s P3.66-billion cash allocation in 2016, lapsed and had to be returned to the Bureau of Treasury.
Auditors said the reversion of such a large portion of its funds reflected the DOT’s failure to maximize the use of its funds, leading to its “inability to provide the public the optimum services it intended/expected to deliver.”
The Office of the Secretary (OSec) alone logged an unused budget of P1.39 billion, followed by Region 4-B (P24.08 million) and Region 6 (P19.02 million), which are home to renowned destinations such as Palawan and Boracay.
DOT’s Region 11 unit was the most efficient spender, as it used up its entire P25.56-million purse. The National Capital Region (NCR) office also posted a reversion of only P38,840.66.
Reacting to the findings, the DOT management blamed the 2016 national elections, change in leadership and organizational revamp for the delay that caused the funds to go unused.
The DOT said its policies, systems and procedures had to be modified “in line with the current thrusts and objectives.”
It said that projects approved by the past administration had to be reviewed and reevaluated first to “ensure conformity with the present government’s priorities.”
“There was a hiatus in the operations of the department to insulate government transaction from political partisan activities,” the DOT told COA.
The DOT’s total expenses, on the other hand, amounted to P2.14 billion. Of this, P872.47 million was obligated only in December mostly for advertising contracts that could not be implemented within the year.
The 2017 obligations that used the previous year’s allotments include the P649.48-million project with McCann Worldgroup Philippines Inc. to conceptualize the “Experience the Philippines” campaign ad which stirred a controversy over its uncanny resemblance to South Africa’s ad. The public backlash forced the DOT to scrap the contract.
Similar obligations include the advertising campaign deals with Cable News Network for P49.8 million; Discovery Network Asia-Pacific for P100 million and British Broadcasting Corp. for P54.87 million, as well as foreign exchange accommodations for overseas activities totalling P18.32 million.
In any case, the use of a quarter of 2016 funds for the following year’s purposes meant that these were “technically public spending without matching physical deliverables/accomplishments,” the COA said.
Despite the poor use of funds, the DOT’s financial statements showed its personnel services expenses increased to P366.6 million, up from the P336.95 million spent in 2015. Salaries and wages alone grew to P177.55 million, from the previous year’s P154.31 million.
“Productivity incentive allowances” even ballooned to P11.06 million in 2016 from P1.58 million the previous year. Of the 2016 amount, P10.89 million went to the OSec, while none was released in 10 regions, including the NCR.
The COA recommended that the DOT facilitate the timely implementation and close monitoring of its programs and projects to ensure the maximum use of its cash allocations.
It advised the DOT to stick with a more realistic monthly disbursement program to avoid lapsing the allocations and realize the benefits that can be derived from the funds.