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COA: P20.3 billion budget for Free College law unused due to five-month delay of guidelines

The Commission on Higher Education (CHEd) has failed to utilize P20.3 billion or half of the P39.9 billion of budget for the implementation of Universal Access to Quality Tertiary Education or Free College Education law, the Commission on Audit (COA) said.

Based on COA’s annual audit report on CHEd, the agency accumulated P20.3 billion of unspent funds for Free College Education law due to the following:

·     delay in the approval of the guidelines for the implementation of the law, consequently delaying the submission of billing statements for the first semester of Academic Year 2018 to 2019 by State Universities and Colleges (SUCs) and Local Universities and Colleges (LUCs);

·     non-submission of billing statements for the second semester of  Academic Year 2018 to 2019 by most of the SUCs/LUCs;

·     delay in the implementation of the Student Loan Program due to the late approval of the memorandum of agreement between the Development Bank of the Philippines and CHEd and CHED; and

·     mismatched Academic Year and the fiscal year which deprived the SUCs/LUCs of the timely use of the appropriated funds and prevented the student-grantees to immediately avail of the loan program.

“Review of the payments made disclosed considerable delays in the submission of billings for free tuition subsidies by SUCs/LUCs for the first semester—the earliest of which were dated August 2018—due to the late approval of the guidelines for the implementation of the Free Higher Education [law]— resulting in the late payments of billings, thus depriving the SUCs/LUCs of the timely use thereof,” state auditors said.

“It was noted that the IRR (Implementing Rules and Regulations) of the Free College Education law was approved on February 22, 2018 while approval of the implementing guidelines was only on August 8, 2018,” state auditors added.

“Out of the total amount obligated, P15.3 billion was actually disbursed, leaving an unpaid balance of P4.3 billion," COA added.

Underspending plague

CHEd’s low disbursement problem, however, is a plague that has extended to its four other projects.

CHEd was only able to use P18 million out of its P342 million or 5.27 percent of its budget for the Student Financial Assistance Programs also due to delayed submission of masterlist from regional offices of CHEd.

As for the budget for Subsidy for Tuition Fees of Medical Students, CHEd was only able to use P55.8 million out of the P250 million allotment because some of the student grantees did not continue with the scholarship program and opted for a more comprehensive Medical Scholarship of the Department of Health.

CHEd’s usage of its budget for assistance to Higher Educational Institutions for K-to-12 Transition Programs was no better as the agency was only able to spend P282.8 million out of the P756.7 million (37.38 %) allocation for the said initiative—all because CHEd called for a temporary moratorium on all CHED K to 12 Institutional Grant in 2018.

Likewise, CHEd was only able to disburse P405 million out of the P763 million budget for the Philippine-California Advanced Research Institute (PCARI)—a capacity building for the faculty, staff and students of the Higher Educational Institutions by undertaking collaborative research and training activities with elite universities in the state of California, USA—due to difficulty in getting technical reviewers and/or experts in the disciplines concerned who were available and willing to review the project proposals and monitoring reports.

“CHED’s underspending of its budget due to its inability to immediately address the unresolved gaps and issues encountered in the implementation of its various programs resulted in the huge unobligated allotment of P22 billion or 49.23 % of the total allotment received,” state auditors said.

“This translated to unimplemented or delayed project implementation affecting the attainment of the agency's plans and targets for 2018. Likewise, this significant unused fund also implies a lack of absorptive capacity of CHEd to carry out is planned programs, projects and activities in a year,” COA added.

In response to these findings, CHEd said it already issued a memo in April this year enjoining SUCs and LUCs to shift the start of the Academic Year to August starting Academic Year 2019-2020, and that most SUCs have decided to shift their calendars starting August 2019.

COA said the guidelines on the Disbursement Procedures for the Tertiary Education Subsidy in the Transition Period Academic Year 2018-2019 was approved by the UniFAST Board last February, but the guidelines for Tertiary Education Subsidy for students enrolled in privately-owned Higher Educational Institutions with no SUCs and LUCs in the area, on the other hand, were released in March.

“It is important to note that the new law is a landmark social legislation that has no historical precedent. No country in the Asian region provides free higher education and there are no templates or regulations that can be used in crafting the IRR of the law. Hence, its implementation has been very challenging given the need to craft guidelines that promotes transparency, accountability, access and equity, and will ensure correct targeting of beneficiaries,” CHEd said in the same COA report.

CHEd also argued that authorized signatories of Unified Financial Assistance System for Tertiary Education Act (UniFAST) board resolutions are cabinet members who are represented by their staff/designated representative during the UniFAST Governing Board meeting—an arrangement that hinders the immediate signing of resolutions.

In order to solve such the difficulty in immediately securing the signatures of cabinet members who are UniFAST Board Members, CHED Chairman Prospero de Vera has proposed a resolution authorizing the representatives of Cabinet members to sign on their behalf, all resolutions/ decisions of the governing board. —LDF, GMA News