By Ben Rosario
The Commission on Audit (COA) has asked the Duty Free Philippines Corporation (DFPC) to bill the Department of Tourism (DOT) for the delivery in 2017 of some P2.5 million worth of merchandise, including luxury bags and cosmetics, beddings, appliances and imported chocolates, to then Secretary Wanda Teo and other DOT officials.
In the recently released 2017 DOT annual audit report, COA said at least US$6,938.35 or P346,446.80 worth of the delivered merchandise were not recorded in the books.
In the same audit report, COA also chided the DFPC for allowing the release of at least US$267,592.06 or P3.36 million worth of signature bags and shoes, inverter refrigerators, LED television sets, coffee machines and other valuable duty free items as corporate giveaways.
The prices of the items distributed as corporate giveaways ranged from $1.35 or about P66.85 to as much as $4,150 or P205,425.
COA discovered that goods worth P346,446.80 were delivered to DOT when auditors reviewed the withdrawal of merhandise made through Gate Pass Slips.
“The 277 items of merchandise withdrawn under various GPS during the period from May to September 2017 were not recorded in the DFPC books as of December 31, 2017, thereby understating the receivable account and overstating the merchandise inventory,” explained COA.
Aside from the unrecorded items, the DOT also withdrew at least P2.174,150.08 worht of duty free merchandises from the DFPC warehouse, it was reported.
The items were “duly receipted by the Office of the DOT Secretary”, COA said.
“The withdrawn merchandise consisted of toiletries, kitchen wares, beddings appliances, canned goods, branded bags, luxury brand cosmetics, chocolates and others,” COA disclosed.
State auditors said cost of the withdrawn but unrecorded items should be collected from the DOT.
In its audit observation, COA also noted that corporate giveaways have been pulled out from the shelves of duty free shops through the use of GPS.
Of the total amount of alleged corporate giveaways, the DFPC accounted for at least P6.254 million worth of items. . The remaining P13.360 worth of merchandise was on the account of duty free store concessionaires.
COA said DFPC must impose “the applicable customs duties and taxes” on the merchandise withdrawn from the stores, “specially those with commercial value.”
Government audit experts said the distribution of expensive items as corporate giveaways is a violation of COA Circular No. 2012-003 for the prevention of “irregular, unnecessary, excessive, extravagant and unconscionable expenditures.”
“On the other hand, withdrawals by the concessionaires of 8,559 items of various merchandise with a total cost of US$267,592.06 or P13,360,871.56 allegedly also for corporate giveaways and sponsorships constitute irregular transactions as defined under Section 3 of Circular No. 2012-003 dated October 29, 2012,” the auditors added.
The concessioners have refused to furnish COA a copy of the list of recipients/events to which the alleged corporate givewaays were distributed.
“While corporate gifts are acceptable industry practice for advertising products, may we emphasize that uncontrolled withrawals of these merchandise could flood local markets with imported goods which could be counterproductive for DFPC in the long run,” COA stressed.
In response, the DFPC submitted the list of recipients of the corporate giveaways and vowed to strictly comply with COA rules against irregular and extravagant expenditures. (Ben R. Rosario)