Gov’t auditor uncovers subsidy error

An error made by the organizer of the Macau Food Festival has shifted the event from making a profit to making a loss, the Audit Commission pointed out in its audit report. The error benefited the organizers however, as the festival would have had to reimburse its subsidizer, the Macao Foundation, with the profits.
The report pointed out that there is no legal stipulation requiring the Macao Foundation to review the Profit and Loss reports submitted by subsidized entities, considering the large amount of entities it subsidizes per year.
During the review, the government auditor realized that some of the subsidies for a particular entity had not been included in the report. The entity, which has received about MOP8.5 million annually from the foundation for several years, later turned out to be the Macau Food Festival.
The festival was also found to be receiving funds from the Macao Government Tourism Office and the Environmental Protection Bureau, as well as the relatively small amount of MOP140,000 from the Sports Fund, which was never reported to the foundation. The details were uncovered after reports from 2015 to 2018 were cross-referenced.
The commission discovered the organizer reported a profit of MOP700,000 in 2015, and losses for the next three consecutive years, ranging from MOP50,000 in 2016 to MOP460,000 in 2018.
If the funds from the Sports Fund had been added to the accounts, the 2016 event would have turned a profit. This would have eventually led to the festival reimbursing the Macao Foundation. The commission noted the issue was not followed up.
However, the foundation said the subsidized entity had submitted certified financial statements signed by an accredited accountant or auditor, which the foundation found reliable. AL

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