Audit report, just click on it. The remainder of the actual scan
of the report is embedded below)
Republic of the Philippines
of the report is embedded below)
Editor's note: A deeply embedded source from the U.P. System has supplied the Diliman Diary with a report from the Commission on Audit (COA) heavily criticizing the U.P. Mindanao Chancellor for "irregular expenditures," for expenses incurred in her investiture in 2007. The embedded source, who has requested anonymity, supplied us with the report entitled, "Report on the Special Audit/Investigation Conducted Of the University of the Philippines - Mindanao" and is dated August 23, 2010. The COA report does not explicitly spell out the name of the Chancellor of U.P. Mindanao, but it is confirmed that it is Chancellor Gilda C. Rivero, who was selected for a second term by the U.P. Board of Regents in 2010, and whose first term began in 2007 (see: http://tinyurl.com/27o989j and http://tinyurl.com/32cm7bl).
The highlights of the findings are:
- Actual expenditures for the investiture reached a total of PhP 643,800.67 which exceeded by PhP 269,584.67 or 72% the approved budget allocation of PhP 374,216.00. COA considers the excess amount to be "irregular expenditures as provided under COA Circular No. 85-55A dated September 5, 1985," and therefore is disallowed.
- Putting the whole thing into perspective, and by way of comparison, the Commission on Higher Education's (CHED) SAFE Scholarship Program provides a deserving student PhP 7,000.00 worth of financial assistance per semester or PhP 56,000.00 of financial assistance for a four year course and PhP 70,000.00 for a five year course. The entire amount of the investiture, or PhP 643,800.67 would have been enough to provide financial assistance to eleven (11) deserving students enrolling in four year courses or nine (9) deserving students enrolling in five year courses.
- The COA team leader, Eduardo D. Basster, said in his report that he found it "troubling" that Chancellor Rivero would reason that "the budget is unlimited when it comes to investiture rites, which is not one of UP-Min's purposes, but constrained when it comes to effecting mandated measures that would strengthen controls/safeguards over its inventories."
- The COA report said that Chancellor Rivero should be admonished to prioritize the allocation of U.P. Mindanao's funds for its mandated purposes as defined in the 2008 University of the Philippines Charter (R.A. 9500).
- Some of the more questionable expenses would include the following: PhP 44,100.00 for the full payment for 350 pieces of gongs with stands at PhP 180.00 each as tokens during the investiture; PhP 5,250.00 for 350 white boxes as packaging for the tokens; PhP 59,454.50 as payment for the fabrication of podiums; PhP 116,494.17 for room accommodations at the Grand Regal Hotel in Davao City; PhP 21,000.00 for accommodations at the Waterfront Insular Hotel in Davao City; and PhP 99,000.00 for the buffet menu and function room at the Grand Regal Hotel to accommodate some 300 persons who attended the investiture.
- More details are provided below, including the text of the audit report and the scans of the actual audit report and scans of the detailed breakdown of the expenditures for the 2007 investiture:
Republic of the Philippines
COMMISSION ON AUDIT
Regional Office No. XI
Report on the Special Audit/Investigation Conducted
of the University of the Philippines – Mindanao
August 23, 2010
COA Regional Office No. XI Unencumbered Memorandum Dated March 31, 2009 directing the conduct of the Special Audit/Investigation to ascertain compliance with laws, rules and regulations of the disbursements of funds made by the officials fo the University of the Philippines – Mindanao (UP-Min) specifically the expenditures on the Chancellor's Investitute in July 2007. Testimonial Dinner on February 20, 2008 and the ongoing expenses incurred for meals and tokens given to guests and/or visitors.
Period of the Special Audit/Investigation
In deference to the above mentioned COA Regional Office No. XI Unnumbered Memorandum, the special audit/investigation's ten (10) days field work did not start on May 26, 2009, broken period and was terminated on February 19, 2010.
The Special Audit/Investigation encompasses the process of determining compliance with laws, rules and regulations pertinent to the disbursement of UP-Min's funds relative to the Chancellor's investiture in July 2007. Testimonial Dinner on February 20, 2008 and the expenses incurred in the provision of meals and tokens to guests and/or visitors.
The procedures/techniques employed in the conduct of the Special Audit/Investigation included the revisiting of the Up-Min's Internal Operating Budgets and the respective activity's Budget Allocations and the vouching of the corresponding uses and/or utilizations of the Budget Allocations. Interviews with UP-Min's responsible officials were also done.
Observations and Recommendations
The Special Audit/Investigation found no material deficiency on the disbursements of UP-Min's funds for the Testimonial Dinner on February 20, 2008 and the practiced provisions of meals and tokens to its guest and/or visitors. Taking into consideration the role of UP-Min as a premier educational institution enjoying limited fiscal autonomy, these transactions were found to have substantially complied with existing laws, rules and regulations.
However, the same cannot be said to the disbursement of funds in connection with the conduct of the Chancellor's Investitute rites in July 2007, which deficiency and other concerns are discussed in detail, as follows:
Actual expenditures incurred in the total amount of P/ 643,800.67 had exceeded by P/ 269,584.67 or 72% over the approved budget allocation of P/ 374,216.00, thus the excess amount incurred is considered irregular expenditures as provided under COA Circular No. 85-55A dated September 5, 1985.
(Page 1 of 4)
An Investitute is an important tradition in the University of the Philippines that is also practiced by many universities all over the world. In UP, it is during the investiture ceremony when the Board of Regents, through the President, invests on the Chancellor with the authority of office, and the proper symbols and clothing. It is this ceremony whee the chain and medallion of the Chancellor are conferred. The investiture ceremony allowed the campus and the larger academic community to recognize the Chancellor as the new leader of U.P. Mindanao. The activity also forged unity among the U.P. Minadanao constituents.
The UP-Min conducted the investiture rites of its chancellor on July 30, 2007.
Upon solicitation, the UP-Min provided a machine copy of a letter dated 18 June 2007 (Annex “1”), captioned “Proposed budget allocation for the Investiture Rites” (Annex “1-a”) signed by the Vice Chancellor/Chair Ad Hoc Committee for the Investiture Rites (Annex “1-b”). The letter was addressed to the UP-Min Chancellor (Annex “1-c”) and was requesting for a budget allocation amounting to P/ 360, 216.00 (Annex “1-d”). In the letter's upper portion appeared what seemed to be in stamp pad, the word “Approved” (Annex “1-e”) and the “Name amd Title of the UP-Min Chancellor” (Annex “1-f”). In ink is the signature of the UP-Min Chancellor (Annex “1-g”) and presumably in the handwriting of the latter is the clause “for at least P/ 374,216.00” (Annex “1-h”). Also in ink in the lower right portion of the letter are the figures “360, 216.00 + 14000/P/ 374,216.00” (Annex “1-i”). The subject letter bears the stamped words “Certified True Copy”, “By” and “Date” and indicated in ink is an illegible signature of the certifying person and the date “5/25” (Annex “1-j”).
Vouching and verification of the disbursement vouchers representing the expenditures incurred in relation to the conduct of the subject investiture rites had shown that the total amount incurred reached P/ 643,800.67 (Annex “2”) and had exceeded by P/ 269,584.67 or 72% over the approved budget allocation amount of P/ 374, 216.00.
In reply to the Audit Observation Memorandum (AOM) issued, the UP-Min Chancellor downplayed the incurrence of expenditures over and above her own approved investiture rites' budget allocation.She ratiocinated that the amount of budget allocation for the investiture rites she approved in the amount of P/ 374,216.00 was the minimum amount as expressly mainfested in her approval when she inscribed the clause “for at least P/ 374,216.00” in the aforementioned letter. According to her, the clause “at least” meant the minimum amount.
While the UP-Min Chancellor may have been correct in the meaning she gave on the clause “at least”, her ratiocination runs counter to the logical context of a budget which was define in the Encarta Dictionary as “Money for a Particular Purpose – the total amount needed or allocated for a particular purpose or period of time” (Underscoring supplied). The clause “total amount” of the Encarta Definition has no other meaning but the maximum amount since taking the same as the minimum amount, as what the UP-Min Chancellor wanted, would result to absurdity and does not sit well with the present financial capability of the country.
Besides, instructive is the second sentence of the first paragraph of the Vice-Chancellor's letter, being discussed above, as it is categorically stated - “This amount is the sum of all the projected expenses of each sub-committee” (Annex “1-k”). Thus, the UP-Min Chancellor's ratiocination is not only illogical and absurd but no basis as well.
And what is troubling was the UP-Min Chancellor's own admission, in her comment to an another AOV issued which comment was dated 3 March 2010 (Annex “3”) where she expressly stated, among others, the following:
XXX”The University cannot afford to purchase office supplies in bulk and also does not have enough space for storeroom”.XXX
(Page 2 of 4)
XXX”Due to budget constraints, Accounting Office and the Supply Office lacks manpower to handle Materials and Supplies Inventory”.XXX
It must be stressed that the importance of the UP-Min Chancellor's Investiture is never questioned. However, it is a fact that the conduct of the investiture rites is not among the purposes of the Univesity of the Philippines as provided under Republic Act No. 9500, otherwise known as “An Act to Strengthen The University of the Philippines as the National University”, which Section 3 thereof is quoted verbatim, to wit:
“SEC. 3. Purpose of the University. – As the national university, a public and secular institution of higher learning, and a community of scholars dedicated to the search for truth and knowledge as well as the development of future leaders, the University of the Philippines shall perform its unique and distinctive leadership in higher education and development. The University shall:
(a) Lead in setting academic standards and initiating innovations in teaching, research and faculty development in philosophy, the arts and humanities, the social sciences, the professions and engineering, natural sciences, mathematics, and technology; and maintain centers of excellence in such disciplines and professions;
(b) Serve as graduate university by providing advanced studies and specialization for scholars, scientists, writers, artists and professionals, especially those who serve on the faculty of state and private colleges and universities;
(c) Serve as a research university in various fields of expertise and specialization by conducting basic and applied research and development, and promoting research in various colleges and universities, and contributing to the dissemination and application of knowledge;
(d) Lead as a public service university by providing various forms of community, public, and volunteer service, as well as scholarly and technical assistance to the government, the private sector, and civil society while maintaining its standards of excellence;
(e) Protect and promote the professional and economic rights and welfare of its academic and non-academic personnel;
(f) Provide opportunities for training and learning in leadership, responsible citizenship, and the development of democratic values, institutions and practice through academic and non-academic programs, including sports and the enhancement of nationalism and national identity;
(g) Serve as a regional and global university in cooperation with international and scientific unions, networks of universities, scholarly and professional association in the Asia-Pacific region and around the world; and
(h) Provide democratic governance in the University based on collegiality, representation, accountability, transparency and active participation of its constituents, and promote the holding of for a for students, faculty, research, extension and professional staff (REPS), staff, and alumni to discuss non-academic issues affecting the University.”
Summing up, by the UP-Min Chancellor's reasoning, the budget is unlimited when it comes to investiture rites, which is not one of UP-Min's purposes, but constrained when it comes to effecting mandated measures that would strengthen controls/safeguards over its inventories.
And as a way of discussing further the impact of the total expenditures incurred relative to UP-Min's investiture rites, we will take into consideration the Commission on Higher Education's (CHED) Safe Schoalrship Proram. Under this program, deserving student is given P/ 7,000.00 per semester financial assistance or P/ 56,000.00 of financial assistance for a four year course and P/ 70,000.00 for a five year course. Hence, the total amount spent for the
(Page 3 of 4)
UP-Min's investiture rites of P/ 643,800.67 would have been enough to provide financial assistance to eleven (11) deserving students enrolling four year courses of nine (9) deserving students enrolling five year courses.
COA Clr. No. 85-55A dated September 5, 1985, or the Amended Rules and Regulations on the Prevention of Irregular, unnecessary, Excessive or Extravagant Expenditures or Uses of Funds and Property provides the following:
XXX"A transaction conducted in a manner that deviates or departs from, or which does not comply with standards set, is deemed irregular. An anomalous transactions which fails to follow or violate appropriate rules of procedure is likewise irregular." (Underscoring Supplied).XXX
The above quoted proviso of COA Clr. No. 85-55A finds application to the investiture rites of UP-Min. The approved budget allocation in the amount of P/ 374,216.00 can be consided as the standard set by the UP-Min and was the maximum amount to be incurred in the investiture rites. The UP-Min Chancellor's ratiocination that was has been set by her was the minimum amount as she had added the clause "at least" (Annex "1-h") in her approval of the budget allocation has no basis in fact and in logic. As mentioned earlier, the UP-Min Vice Chancellor's letter had categorically stated - "This amount is the sum of all the projected expenses of each sub-committee" (Annex "1-k") and the Encarta Dictionary's definition of budget - "Money for a Particular Purpose - the total amount needed or allocated for a particular purpose or period of time", make the chancellor's ratiocination absurd and illogical. And since the actual expenditures incurred had breached the standard, the excess amount is considered irregular expenditures.
As being irregular, the excess amount of P/ 269,584.67 representing 72% of the budgeted amount of P/ 374,216.00 may be disallowed in the final settlement of accounts.
We recommend that the UP-Min Chancellor be admonished to prioritize the allocation of its funds on U.P.-Min's mandated purposes.
EDUARDO D. BASSTER
State Auditor III - Team Leader
(Page 4 of 4)
Breakdown and Itemization of the Expenses
(To enlarge the scans, just click on them)
Continuation of the COA Report
(Chanda Shahani is the Editor of the Diliman Diary)