Saturday, December 12, 2009
2008 COA report opens maze of questions on University of the Philippines foundations
By Chanda Shahani
The administration of the government-owned University of the Philippines (U.P.) System may be tolerating conflicts of interest by university officials who could be exploiting government resources to potentially benefit themselves financially; through privately-run foundations affiliated with the University, while refusing to reveal their financial records to the government-run Commission on Audit (COA) a check into government records shows.
A check into the annual audit reports of the government-run Commission on Audit (COA) posted on the COA website at http://www.coa.gov.ph shows that “there is an inadequate supervision of projects implemented by private foundations” at U.P. Diliman. Portions of the Consolidated COA Annual Report dated 2008, but transmitted to U.P. President Emerlinda R. Roman by COA in a covering letter dated August 17, 2009 state that:
* A COA verification of projects implemented by the U.P. Diliman’s National College of Public Administration and Governance (NCPAG) disclosed that The United Nation Development Program (UNDP) contracted NCPAG as an implementing partner for the project, “Fostering Democratic Governance” (FDG) under ATLAS Award ID No. 00041065 during the lifecycle of its Country Programme Action Plan of 2005-2009 with the National Government. However, the UNDP checks totaling P5,269,000 for projects implemented from CY 2007-2008 was not recorded and accounted for in the books of UP Diliman as the funds were acknowledged thru official receipts issued by the UP Public Administration Foundation (UPPAF), a private foundation. The checks were deposited by NCPAG officials to its private account No.244830225-6 maintained with the Philippine National Bank (PNB), MWSS Branch. The said amounts at the PNB were withdrawn by the UPPAF Accountant and deposited to UPPAF’s bank account as evidenced by the PNB Bank Statement, deposit slips and General Journal (GJ) duly signed by the accountant and NCPAG Dean, the COA report said.
* The Consolidated COA Annual Report for 2008 also said that the UP Diliman School of Labor and Industrial Relations (SOLAIR) and the Center for Labor Education, Advocacy, Research and Development (CLEARED) foundation entered into a MOA of to “assist the UP SOLAIR in the realization of its two-fold mission – the promotion of labor empowerment and an enlightened industrial relations system – through the conduct of relevant and timely research training, community service and other related programs.” A COA Audit of the documents relative to MOA disclosed the following that there was a variance of PhP 10,646,159 and PhP 9,449,992.66 for the years 2006 and 2007 respectively, between seminar fees collected and reported in the CLEARED Courtesy Report, and in its Financial Statements (FS) submitted to the Securities and Exchange Commission (SEC).
COA audit observations and recommendations since 2006 for U.P. Foundations to enter into specific MOAs with their concerned units remain unacted upon, the report said.
The COA Report criticizes the U.P. administration for failure to provide an environment that complies with the 1987 Administrative Code which states in Section 42 1 (B) that “except as may otherwise be specifically provided by law or competent authority, all money and property officially received by a public officer in any capacity or upon any occasion must be accounted for as government fund and government property. Government property shall be taken up in the books of the agency concerned at acquisition cost or at appraised value.”
The COA report also cited and underscored Section 122 of the Government Accounting and Auditing Manual which that “Receipts from non-tax sources authorized by law for specific purposes, which are collected/ received by a government office or agency acting as trustee, agent guaranty for the fulfillment of an obligation, and all other collections classified by law or regulations as trust receipts shall be treated as a trust liability of the agency concerned.”
The COA report on U.P., buried deep inside the COA website under the Cluster entitled State Colleges and Universities detail findings and audit observations about University-based foundations that the U.P. administration has failed to resolve to COA's satisfaction over the years.
In the case of NCPAG, however, the United Nation Development Program (UNDP) contracted UP NCPAG as an implementing partner for the project Fostering Democratic Governance (FDG) under ATLAS Award ID No. 00041065 during the lifecycle of its Country Programme Action Plan of 2005-2009 with the Philippine Government.
However, the UNDP checks totaling P5,269,000 for projects implemented from CY 2007-2008 were not recorded and accounted for in the books of UP Diliman even as the funds were acknowledged thru official receipts issued by the UP Public Administration Foundation (UPPAF), a private foundation. The checks were deposited by NCPAG officials to its private account No.244830225-6 maintained with the Philippine National Bank (PNB), MWSS Branch. The said amounts at the PNB were withdrawn by the UPPAF Accountant and deposited to UPPAF’s bank account as evidenced by the PNB Bank Statement, deposit slips and General Journal (GJ) duly signed by the accountant and NCPAG Dean.
In its answer, the NCPAG Dean justified that the use of UPPAF official receipts to acknowledge UNDPs checks instead of remitting the same to the University Cashier for appropriate recording is only logical since UPPAF is the foundation of NCPAG. More so, UNDP did not find anything wrong with the receipt(s) issued by UPPAF and any irregularity thereon should have been immediately brought to their attention. To the contrary, UNDP released funds several times during the lifespan of the project.
While the COA report commented that while the NCPAG Dean is at the same time the UPPAF President, it appeared that a conflict of interest existed as it favored the interest of the UPPAF over the University in allowing the UPPAF to manage UNDP funds.
However, the COA report said that the Dean further explained that “it is only normal for the undersigned to be the head of the Implementing Partner of the UNDP contracted projects since being Dean necessitates being able to represent the College in numerous capacities –both as an academician and as an administrator. Moreover, Deans serving as Presidents of their respective units’ foundations is the standard practice in the University. It is to safeguard the interest of the unit concerned.”
While COA acknowledged the Dean's position, it nevertheless maintained its position in the report that, the NCPAG represented only UP Diliman as the party to the UNDP contract therefore the UNDP funds for project’s implementation were government funds to be accounted for as required under the Administrative Code and the Government Auditing and Accounting Manual.
The COA report also claimed that in the absence of any contract with UP Diliman thru NCPAG, UPPAF being a private entity has no legal personality to receive any payment and implement the project for and in behalf of NCPAG. It stated that this kind of arrangement was a recurring audit finding in the CY 2006 and 2008 UNDP audit exercises for the Fostering Governance projects with UP NCPAG.
The COA report also pointed out that being the President of UPPAF and at the same time the Dean of NCPAG though a standard operating practice in the University as admitted, there is a possibility that undue advantage may be given to the foundation and to its members in the guise of protecting the interest of the unit or NCPAG for that matter.
In the case of the U.P. School of Labour and Industrial Relations (SOLAIR) UP SOLAIR and the Center for Labor Education, Advocacy, Research and Development (CLEARED) foundation entered into a MOA of which the latter will “assist the UP SOLAIR in the realization of its two-fold mission – the promotion of labor empowerment and an enlightened industrial relations system – through the conduct of relevant and timely research training, community service and other related programs.”
An audit by COA of the documents relative to MOA disclosed the following: a variance of P10,646,159 and P9,449,992.66 existed for CYs 2006 and 2007 respectively, between the seminar fees collected and reported in the CLEARED Courtesy Report, and in its Financial Statements (FS) submitted to the Securities and Exchange Commission (SEC).
Moreover, the non-disclosure of all CLEARED income from seminars in collaboration with UP SOLAIR resulted to the under-remittance of P2,256,025 as 10 percent administrative cost to the University, for the use of resources like utilities and venue computed as follows.
The COA report also pointed out other issues concerning SOLAIR and CLEARED:
The absence of the names of faculty and staff members in the budget estimates of SOLAIR and the amount of time that was to be utilized for the training program as the basis for evaluation and approval by the University Chancellor prior to the start of any specific project to be undertaken as required in the MOA;
No separate bank account was opened for specific projects under the MOA;
The absence of official documents authorizing CLEARED the exclusive use of a donated vehicle (plate No. SEW 471) to UP SOLAIR. The repair, gasoline and other expenses incurred were charged against the funds of the Foundation as certified by the school dean, however, the cost of wear and tear or depreciation thereof was charged to the University.
The absence of specific guidelines, inadequate supervision and monitoring of compliance with existing agreements with these foundations resulted to the undeposited NCPAG funds and the under-remittance of training/seminar fees collected by CLEARED in behalf of UP SOLAIR.
The COA report stressed that there is a need to monitor the proceeds of the training programs/projects conducted by colleges and units such as in the case of NCPAG and SOLAIR as they are shared and accounted for as government funds and utilized by the contracting parties for the intended purpose/s.
The U.P. Administration's response, acording to the COA report, was that as a remedial measure, NCPAG cannot implement the 2nd phase of UNDP contract without a MOA and funds to be channeled to the UP Diliman Trust account. While SOLAIR opened a trust account for its institutional programs but will no longer course funds to CLEARED.
COA also pointed out in its 2008 Consolidated COA Annual Report that the U.P. Administration had only partially implemented recommendations regarding the U.P. Administration's absence of policy regarding U.P. affiliated foundations in the 2007 Consolidated COA Annual Report. It said that the absence of a policy raised doubts on funds accountability over an estimated PhP 55 million and $ 95,968.32 received by these foundations from 2003 to 2007 on behalf of U.P. since these funds were not fully disclosed or reported to the University or covered by contract or agreement, given that members and officers of the foundations are at the same time incumbent faculty members and officers of the University.
COA has been recommending since 2007 that University-affiliated foundations programs and projects, their activities and fund sources be reported to the University for monitoring and transparency purposes. It also asked the U.P. System Administration to issue guidelines for UP-affiliated foundations' accreditation and in response the U.P. System Administration did in fact submit on April 23, 2008 a copy of the “Guidelines for Recognition of UP-Affiliated Donor Organizations” which provides the basis for U.P.'s recognition of foundations as private institutions in support of U.P.'s academic functions.
Despite the submission of the guidelines, however, COA is still pointing out that the U.P. Administration still did not address the issue of monitoring and transparency of U.P. Foundation's programs, projects, activities and fund sources that should be reported to the University for monitoring and transparency purposes, as these are regarded as government funds by COA. However, draft or actual MOA's and other important documents required as part of standards for recognition of U.P. affiliated foundations were not yet submitted yet, according to the COA website at the time this dispatch was published.
COA said that existing agreements between U.P. Diliman and university-based accredited do not clearly delineate their respective relationship and functions related to financial and operational arangements particularly on the collection of fees for various seminars, training, research and other activities.
Next: More questions regarding the University of the Philippines Foundation and the U.P. Business Research Foundation
- ► 2013 (34)
- ► 2012 (142)
- ► 2011 (365)
- ► 2010 (535)
The Diary Archive
- ► 2013 (34)
- ► 2012 (142)
- ► 2011 (365)
- ► 2010 (535)