TOURISM PROMOTIONS BOARD

CONCRETE AND TIMEBOUND ACTION PLAN ON COA OBSERVATIONS

AOM No. Subject Audit Observations Action Plan Management Reply

Advance payment by TPB for the health

insurance premiums of employees has been a
practice since 1991. TPB has adopted this
premiums of employees has been a practice as
our way of extended assistance to keep and
maintain the well-being of our employees. We
see to it that at the beginning of the year, as early
Health Insurance of employees, personal
as February, we start deducting from the
telephone calls and LBP initial deposits
Require concerned employees to settle their employees' salaries their monthly payments and
advanced by Tourism Promotions Board
receivables to avoid issuance of a Notice of to make sure that their accounts have been fully
(TPB) amounting to P595,554 remained
Disallowance immediately. paid at year-end. Even if TPB have not paid yet
outstanding as of 30 September 2014, in
2015-01 Accounts Receivable the health insurance provider, we start the
violation of Sec. 4.1.1 on the granting,
Stop granting personal cash advances to collection of payments from the employees'
utilization of cash advances under COA
employees particularly employees' health salaries as reflected in the attached February and
Circular No. 97-002 which requires that cash
premiums in the succeeding years. March 2014 financial report for the DUE FROM
advance shall be given only for a legally
EMPLOYEES account showing negative
specific purpose
balances. As of December 31, 2014 payment
made by employees for their health insurance
amounted to P536,886.54. Advances for the
LBP deposits have almost been settled. For the
telephone calls, prior to the processing of
payment to PLDT, we request employees to pay
their personal accounts.
 TOURISM PROMOTIONS BOARD
CONCRETE AND TIMEBOUND ACTION PLAN ON COA OBSERVATIONS
AOM No. Subject Audit Observations
TPB released the amount of P7.5 million to
Philippine Formula Autos Foundation, Inc.
(PFAFI) as sponsorship to the Euro Racecar
Funds Released to Non-
NASCAR Touring series for media and
Governmental
2015-02 promotional values, however, the project
Organizations / Peoples
which was the Asian V8 Speed Challenge at
Organization
Clark Speedway in Pampanga did not push
through but the funds were not returned,
contrary to COA Circular 2007-001
2015-003 Cash Examination 1. Peso equivalent of dollar collections were
not taken up in the cash book as required
under PPSAS (IPSAS) 4 on foreign
exchange transactions resulting on error
in the recognition of foreign exchange
differential. Furthermore, balances of the
cash book for reconciliation with the
accounting record were not readily
available.
2. Collections thru banks were included in
the cashbook as part of collections for the
day thus increasing the cash
accountabilities of the Cashier.
3. Allowances and overtime pay of regular
employees were paid thru payroll fund
instead of the ATM scheme, which is less
efficient and risky on the part of the cash
disbursing officers as well as the
employees.
4. The cost incurred for ordering various
check booklets were wasted since 980
Action Plan
File the necessary appeal with the
reglementary board allowed by law and
applicable rules and regulations within a
month from the date of the receipt of Notice
of Disallowance (ND).
Cashier to record foreign currency collections
with daily exchange rates and reconcile peso
and foreign currency balances with the
Accountant at least quarterly.
Adopt the ATM scheme in the payment of
allowances and other benefits to strengthen
internal control and promote operate
efficiency effective July 2015.
Management Reply
Please be advised that an appeal to the Notice of
Disallowance No. 15-001-SPP issued to
accountable officers on March 23, 2015 was
filed with COA considering that management
has been coordinating and following up with the
Philippine Formula Auto Sport Foundation Inc.
the retrieval/return of said sponsorship.
1. Reconciliation of Cash and Accounting
records: (a) Cash Unit shall submit a daily
transaction report of deposits and receipts to the
Finance Department to facilitate reconciliation
of records. The report shall, likewise, indicate
the exchange rate for that day, thus, facilitating a
more accurate recognition of exchange
gains/losses; (b) To facilitate identification, the
Cash Unit shall record the peso and foreign
currencies on a separate column in its General
Ledger Form. Please be advised that the Cashier
Unit has started implementing your
recommendations in the recording of foreign
currency collections and being followed through
by the Accounting Division.
2. Accountability of the Cashier: (a) TPB shall
maintain and issue a separate Official Receipt
for direct bank deposits made by its clients. The
same shall be recorded in a separate cash book
for proper monitoring and shall also be reflected
in the Report of Accountable Forms.
3. Payment of Allowances and OT: (a) Payment
 TOURISM PROMOTIONS BOARD
CONCRETE AND TIMEBOUND ACTION PLAN ON COA OBSERVATIONS
AOM No. Subject Audit Observations
pieces LBP checks have not been used for
quite some time while 2,071 pieces PNB
checks still remained.
2015-04 Advertising Services The procurement of Advertising Services
Contract-Dentsu Contract, its amendment, renewal and
Philippines, Inc. extension in the total amount of
P1,199,907,548, entered into by and between
DOT, TPB and Dentsu Philippines, Inc. to
undertake the production of the creative
materials necessary for the implementation
of the media plan for use in the "It's More
Fun in the Philippines", which were not in
accordance with various provisions of RA
9184 were deemed irregular
Action Plan Management Reply
of allowances and other monetary benefits shall
be through ATM scheme effective July 2015.
4. Disposal of unused checks: (a) To facilitate,
the following courses of action shall be
undertaken as required by the respective banks:
kindly check attached reply to AOM.
File the necessary comment/reply. 1. On the issue of Annual Procurement Plan, the
TPB management envisioned that the prescribed
Bid succeeding Advertising Services. formalities of R.A. 9184 and its IRR with regard
to the preparation of APP may not be applicable
Procure Advertising Services Contracts in toto under the circumstances considering that
annually. the advertising services contract for 2013 is an
extension of the original contract.
2. On the issue of Multi-Year Obligational
Authority (MYOA), the TPB management
submits to the observation of the auditors that
the advertising service does not require MYOA
since it is not per se a Multi-Year Advertising
Contract.
3. On the issue of the ABC, the Approved
Budget for the Contract of the advertising
services contract for the period 2012, 2013 and
2014 were duly approved by the Head of the
Procuring Entity (DOT &TPB).
4. On the Amendment of Contract, we
respectfully submit that there is no factual basis
to hold the view that the amendment was made
without the available funds. Appropriately, there
is no legal basis to hold that the subject
amendment in the RASC is in violation of
Section 86 of P.D. 1445.
 TOURISM PROMOTIONS BOARD
CONCRETE AND TIMEBOUND ACTION PLAN ON COA OBSERVATIONS
AOM No. Subject Audit Observations
TPB could have earned an additional interest
income of at least P8.250 million had the
Opportunity Loss on
Agency invested its excess funds in High
2015-05 Interest Income on cash
Yield Savings Account instead of
accounts
mainstreaming them under the Land Bank of
the Philippines (LBP) current account
Action Plan Management Reply
5. On the ratification of the TPB Board, the TPB
Board of Directors is empowered under R.A.
9593 and its implementing Rules and
Regulations to authorize the execution of
contracts and agreements necessary for the
attainment of its objectives. Corollary to this, the
TPB Board of Directors has authorized the Chief
Operating Officer to sign contracts and
agreements entered into by TPB. By virtue of the
authority vested by law (R.A. 9593), the TPB
Board of Directors is authorized to approve and
ratify contracts and agreements to bring into
light its mandate to market and promote the
Philippines as a premier tourism destination.
The management took note and considered the
recommendations mentioned therein. The TPB
Finance Manager has already consulted the Land
Bank BSP Servicing Unit Branch Manager with
regards to items A & B under the
recommendations mentioned in the subject
COA-AOM. The TPB Management is taking
due diligence in placing investments or in
acquiring government securities. We have done
Evaluate overall financial ability and
research on the "current market" prices of stocks,
determine best investment opportunities for
bonds and government securities which are very
funds that will yield higher returns, such as
volatile, at the moment, and concurred by the
investment in government securities or high
LBP-BSP Branch Manager. it may also be noted
yield savings account.
that although the "coupon prices" of government
securities are fixed, there has to be a buyer in the
second market before we can unload our
placements. We may have to wait for an
indefinite/long period of time to unload when
there is an immediate need for the TPB to settle
its accounts & obligations contracts. Hence, we
have to carefully/strategically plan our
investments.
 TOURISM PROMOTIONS BOARD
CONCRETE AND TIMEBOUND ACTION PLAN ON COA OBSERVATIONS

AOM No. Subject Audit Observations Action Plan Management Reply

1. Recorded balance of Property, Plant and

Equipment amounting to P49.28 million
was overstated by P10 million while
Advances to contractor was understated
by P0.712 million, due to the recognition
of PPE-building for the budgeted amount
Please be advised that the necessary adjustments
of capital outlay for building, although
for the Property, Plant and Equipment account
the construction/rehabilitation of office
Make the necessary adjustment to the have been made per JEV(GJ) No. 09-2015-053
spaces were still in progress.
Unreconciled balances of building account and advances to contractors dated September 30, 2015 for the reconciliation.
2015-06
PPE Accounts in September 2015.
2. The Inventory of PPE was not completed
The Accounting Unit do maintain a Property,
and the report on inventory did not
Plant and Equipment Ledger Card (PPELC) that
reconcile with accounting and property
was started in 2004.
records, on the disposal and acquisitions
of office equipment during the year.
Inventory of various furniture and
equipment was not conducted, hence, not
assigned with property tags as evidence
of inventory taking.
 TOURISM PROMOTIONS BOARD
CONCRETE AND TIMEBOUND ACTION PLAN ON COA OBSERVATIONS

AOM No. Subject Audit Observations Action Plan Management Reply

Excessive cash advances were granted to

special cash disbursing officers which were
liquidated/refunded beyond due dates,
Grant and Liquidation of
2015-07 contrary to COA Circular 97-002 on the
Cash Advances
grant, utilization and liquidation of cash
advances, exposing TPB to the risk of misuse
of funds
Evaluate the amount of cash advances granted
to special disbursing officers and ensure its
liquidation within the prescribed period.
To fast track the system of liquidation, we will
implement salary deduction for AOs who are
still connected with the agency; and for those
who retired from service, we will prepare
demand letters addressed to them.

Non-liquidation of prior years' Cash

Issue demand letters to PDOT Attaches and
Advances (CAs) amounting P17.07 million
other Accountable Officers with outstanding Management has sent demand/follow-up letters
and CAs granted in 2014 in the amount of
balances within the month. to concerned AOs who have
Advances to P132 million contrary to COA Circular No.
2015-08 resigned/retired/transferred who have previous
Accountable Officers 97-002 understated the Promotional and
Monitor the granting and liquidation of CAs cash advances to liquidate and/or return the
Advertising Expenses account while
on a regular basis. unexpended funds.
overstating reported income and cash
advance account and may be disallowed
 TOURISM PROMOTIONS BOARD
CONCRETE AND TIMEBOUND ACTION PLAN ON COA OBSERVATIONS

AOM No. Subject Audit Observations Action Plan Management Reply

1.1. We shall require the accountable / project

officers to inform and furnish the Finance
Department a copy of the Memorandum of
Agreement for the financial assistance to
enable them to properly record the fund
transfers. After the project, the project
officers shall submit a terminal report and a
liquidation report as reviewed by the
Accounting Division prior to approval of the
Participation fees amounting to P3.774 head of agency that shall be submitted to the
million were taken up as miscellaneous agency granting the funds.
income instead of service fee-participation
fees, thus overstating miscellaneous income 1.1 Furthermore, we shall take up in the books
by P3.774 million and understating Service the adjusting entries for the reclassification
Fees by P3.172 million and Deferred Credits of accounts. We just would like to
by P.602 million. clarify/point out that we use the account
Clarify the entry “Miscellaneous Income”
On the other hand, funds transferred by Service Income - Participation Fees solely
with COA and provide supporting
2015-09 Miscellaneous Income TIEZA and DOT for the rehabilitation of the for the individual's registration fee for
documents to justify the recording of the
TPB offices, financial assistance and other his/her participation in a project. We treat
fund transfers.
activities in the amount of P3.2 million and the booth rental payments of various
P.250 million respectively were taken up as participating establishments as
miscellaneous income instead of Trust Miscellaneous Income because we consider
Liabilities under Due-to-other it as their "share/contribution" to what TPB
GOCCs/Subsidy from other NGAs, resulting paid to the project organizer.
in the overstatement/understatement of
various accounts. 1.1. Likewise, the payment made by United
International Hotel Group amounting to
P601,750 should not be considered as
Deferred Credits to Income as this pertains
to their booth payment for 2014 World
Travel Market.

1.1. Should we be allowed, we shall revise the

2014 financial statements to cause the
necessary adjusting entries.
 TOURISM PROMOTIONS BOARD
CONCRETE AND TIMEBOUND ACTION PLAN ON COA OBSERVATIONS

AOM No. Subject Audit Observations Action Plan Management Reply