CoA pins Teo on P6.7M Duty Free scandal

The P60-million advertisement controversy that led to Wanda Tulfo-Teo’s end as head of the Department of Tourism (DoT) appeared that it was not the only financial scandal that she got involved into as the Commission on Audit (CoA) found at least P6.7 million in questionable transactions.

The CoA has asked the Duty Free Philippines Corporation (DFPC) to collect P4.14 million from

the DoT in connection with the latter’s supposed commission in connection with the DFPC’s profit in various transactions that include distribution of merchandise, consultancy fee and shipping cost.

The CoA also billed DFPC in line with Teo’s and former Tourism Undersecretary for Administration and Special Concerns Rolando Cañiza’s supposed transactions on P2.52 million for the delivery in 2017 of merchandise, including signature bags and cosmetics, beddings, inverter refrigerators, LED television sets, coffee machines and imported chocolates.

The DFPC is a government-owned and controlled corporation (GOCC) under the DoT.

The recently released 2017 DoT annual audit report revealed Teo withdrew the luxury items from Duty Free stores last year and charged these to the funds intended to fuel the department’s programs.

CoA said items were pulled out from the shelves of Duty Free shops through the use of Gate Pass Slips (GPS). They were allegedly used for corporate giveaways, CoA noted.

The distribution of expensive items as corporate giveaways, CoA said, is a violation of CoA Circular No. 2012-003 for the prevention of “irregular, unnecessary, excessive, extravagant and unconscionable expenditures.”

The audit report revealed P2.52 million worth of Duty Free items were withdrawn from stores following orders from Teo and Caniza.

CoA said the total amount of withdrawals from Duty Free is P2.17 million, with a breakdown as follows: P43,885 Teo withdrew using various memos; P1.37 million Cañizal withdrew, and P758,525 Duty Free also withdrew for the DOT.

Aside from these, a withdrawal worth P346,446 from a Duty Free store from May to September last year was not included in the DoT record, CoA added.

The agency said “277 items of merchandise withdrawn under various GPS during the period from May to September 2017 were not recorded in the DFPC books as of Dec. 31, 2017, thereby understating the receivable account and overstating the merchandise inventory.”

CoA also said nearly 300 Duty Free items were authorized by DoT officials to deliver to their offices through GPS. The luxury items, CoA added, were received by the office of Teo.

“The 277 items costing $6,938.35 or P346,446.80, apart from the $43,091.13 or P2,174,150.08 that were recorded in the books, were all duly receipted by the Office of the DoT Secretary upon the release of the items from the DFPC warehouse based on the issued and approved GPS,” the report said.

Aside from the merchandise withdrawals, CoA also discovered a P1.6 million consultancy fee and cost of shipment of DoT donations worth P22,893.

CoA stressed that the transactions were a clear violation of Republic Act No. 9593 or the Tourism Act of 2009.

It then strongly recommended the practice of directly charging from DoT’s share in DFPC’s net profits be stopped to prevent similar incident to happen in the future.

Section 105 of RA 9593 states a “minimum of 50 percent of Duty Free’s annual net profit shall be automatically remitted to the Office of the Tourism Secretary to fund tourism programs and projects.”

In total, CoA said the DoT should be billed by the DFPC management for expenses the amount of P4.14 million.

It also recommended DFPC’s accounting department to record the transactions withdrawn by the Tourism officials.

Teo resigned in May “out of delicadeza” following a controversial P60-million advertising deal between the Tourism Department and a television program run by her brothers Ben and Erwin Tulfo in People’s Television 4.

Her successor, Bernadette Romulo Puyat, requested CoA to review all programs under Teo’s watch after finding out several projects did not go through public bidding, which is required by law.