COA flags Tourism Department for P205-million ‘irregular’ ad contracts with foreign media
Metro Manila (CNN Philippines, August 29) — The Commission on Audit (COA) has asked the Department of Tourism (DOT) to “take appropriate actions” against officials responsible for irregular advertising service transactions in 2016, when Wanda Teo was head of the agency.
The latest state audit report found that the DOT had paid over P200 million to international media outfits CNN (Cable News Network), DNAP (Discovery Networks Asia-Pacific), and BBC (British Broadcasting Corporation) without approved contracts. It said the department violated the Budget Reform Decree and the Government Auditing Code of the Philippines.
According to the COA report, the contracts were only finalized in 2017, but payments were made in 2016.
State audit report said DOT paid a total of ₱204,668,046 to the three foreign media outfits for Philippine advertising activities on December 28, 2016 “without the approved contracts at the time of issuance.”
This was charged from the branding budget.
CNN: US$1,000,000 (inclusive of tax, exclusive of bank charges, transfer fees) (₱49.8 million)
DNAP : US$1,000,000 (net of tax) (₱100 million)
BBC : US$1,500,000 (net of tax) (₱54.868 million)
In addition, state auditors said the contract with BBC was insufficiently fund by over ₱20.13 million. It is because the contract cost in the contract was stated in US currency and no conversion was made in Philippine peso.
“The contract cost amounted to ₱74,998,800.00 when converted based on the prevailing exchange rate on the date of the signing of the contract /notarization date exclusive of taxes bank charges and transfer fees. Thus, the amount allotted and obligated amounting to ₱54,868,046 were insufficient to cover the entire cost which is in violation of Sections 85.1 and 87 of PD No. 1445,” the report read.
The payment were as follows:
