REPORT OF AUDIT : REGIONAL TOURISM EXPANSION (6/29/71-9/20/71)

PROJ DESIGNED TO SUPPORT INSTITUTIONAL & MANPOWER DEVELOPMENT NECESSARY WITHIN SITCA FOR ESTABLISHMENT OF EFFECTIVE REGIONAL TOURISM PROGRAMS IN CENTRAL AMERICA & PANAMA. AUDIT INCLUDED TESTS OF SITCA & ROCAP RECORDS PLUS REVIEWS OF SITCA"S OUTSIDE CONTRACTS TO DETERMINE EFFECTIVENESS & EFFICIENCY WITH WHICH FUNDS HAVE BEEN UTILIZED. SITCA HAS TO DATE SUCCESSFULLY SECURED COOPERATION OF MAJOR US TOUR OPERATORS IN PROMOTING AREA AS TOURIST ATTRACTION; PUBLISHED A REGIONAL HOTEL & RESTAURANT GUIDE; DEVELOPED A PROMOTIONAL FILM THAT HAS BEEN SHOWN TO 12M US VIEWERS; ESTABLISHED PACKAGE TOURS; AND OUTLINED PLANS FOR ESTABLISHMENT OF A CENTRAL AMERICAN TOURIST ORGANIZATION. AUDITORS NOTED SITCA"S FINANCIAL PREDICAMENT, EXACERBATED BY FAILURE OF MEMBER COUNTRIES TO CONTRIBUTE PLEDGED ANNUAL AMOUNTS. OF $471, 000 PLEDGED INCREMENTALLY BY 6 MEMBER COUNTRIES SINCE 1966, SOME $253, 000, OR 54%, HAD NOT BEEN DISBURSED TO SITCA AS OF 6/30/71. IN THE ABSENCE OF WRITTEN AGREEMENTS BETWEEN SITCA & MEMBER COUNTRIES, THERE IS NO LEGAL BASIS FOR SUCH SUPPORT. ROCAP SUPPORT, BASED ON ORIGINAL PLEDGED AMOUNTS, HAS CONTINUED AT BUDGETED LEVEL DESPITE SITCA"S INABILITY TO PROVIDE PROAG SHARE. AUDITORS RECOMMEND THAT SITCA ESTABLISH LEGALIZED FUNDING BASE WITH EACH MEMBER COUNTRY, THAT SITCA INITIATE ACTION TO SEEK PAYMENTS WHEN PLEDGES ARE OVERDUE, AND THAT SITCA CONSIDER WITHDRAWAL OF SERVICES FROM COUNTRY TOURISM BUREAUS THAT FALL INTO ARREARS. AUDITORS FOUND SITCA ACCOUNTING DEFICIENCIES,WITH NO SEGREGATION BETWEEN ROCAP & OTHER CONTRIBUTIONS,DISCREPANCIES BETWEEN LEDGERS & FISCAL REPORTS WITH RESPECT TO SITCA EXPENDITURES,AND NON-POSTING OF PROJ LEDGERS FOR PREVIOUS 6 MONTHS. AUDITORS RECOMMEND THAT ROCAP REQUIRE SITCA TO ESTABLISH & MAINTAIN ADEQUATE SYSTEM OF ACCOUNTING -- THIS A RECOMMENDATION REPEATED FROM PRIOR 5/12/69 AUDIT. AUDITORS NOTED UNAUTHORIZED TRAVEL TO US & HOLLAND CHARGED TO PROJECT,AND DIRECT ROCAP TO COLLECT $2194 IN QUESTION FROM SITCA.