COA flags CHEd’s P548-M overpayments to 3 state universities and colleges
In 2023, the Commission on Higher Education (CHEd) overpaid three state universities and colleges (SUCs) by more than P548 million, along with overpayments to students and incomplete documents to aid various scholarship programs.
The latest annual audit report by the Commission on Audit (COA) found that CHEd made overpayments of P548.7 million to three SUCs for the implementation of Free Higher Education (FHE) program from 2018 to 2022.
FHE was created in 2017 as one of the projects launched in response to the enactment of the Universal Access to Quality Tertiary Education Act.
It exempts eligible students who are enrolled in any bachelor’s or certificate course at SUCs or any CHEd-accredited local universities and colleges from paying tuition and other miscellaneous fees.
Of the total flagged payment transfers, Cebu Technological University (CTU) received the biggest amount at P502.7 million, which included fees for “enhancement and maintenance,” computer services, medical and dental services, laboratory services, handbooks, school IDs, and admission.
In particular, the university was found to have “doubtful validity” of lab and graduation fees, state auditors noted. The lab fees, for instance, were billed to students “other than those students enrolled in subjects with actual laboratory units.”
CTU was followed by the Pangasinan State University (PSU), which got P42.08 million in overpayments; and the University of Science and Technology of Southern Philippines (USTP), which received P3.97 million in excess fund transfers.
In the case of PSU, the rates billed against CHEd for the National Service Training Program (NSTP) of the covered scholars were “excessive” at P750 per student, instead of just P375. Computer and lab fees were also “ineligible” to be billed against CHEd.
USTP, on the other hand, erroneously charged or double-billed CHEd for similar fees, such as computers, labs, handbooks, school ID and admission, said COA.
Excessive billings
“Both the UniFAST (United Student Financial Assistance System for Tertiary Education) and the accounting office of CHEd (central office) failed to capture those excessive billings because of deficient control mechanisms in place at that time,” state auditors said in the report.
UniFAST is the law that authorizes all types of state-funded financial aid for college students.
State auditors also blamed the absence of a computerized billing checker system, which forced UniFAST personnel to manually check the billings instead, calling it “a system of checking prone to human error.”
There was also a shortage of personnel, particularly “billing assistants,” to attend to the “staggering number” of reimbursement claims from higher education institutions (HEIs). This, they added, affected the accuracy and consistency of the billings under the FHE program.
The CHEd’s accounting department also failed to conduct an independent review of the billings, relying solely on the pre-audit done by the UniFAST secretariat.
Under the Tertiary Education Subsidy (TES) program, there were overpayments totaling P210,000 to seven scholars, as well as disbursements worth P529.06 million that had “incomplete or deficient” supporting documents, noted COA.
The grant for seven TES beneficiaries doubled to P60,000 each, instead of just P30,000, for the second semester of the academic year 2022 to 2023, according to the examination done by COA due to a lack of a “sound system of internal control in processing the benefits of students.”
COA also declared “doubtful” the validity of the liquidation of TES funds in the Ilocos and Central Luzon regional offices of CHEd due to insufficient documentation.
K-12 scholars
Meanwhile, only 279 out of the 703 scholars in four regions were able to finish their courses subsidized by the Scholarships for Graduate Studies-Local under the K-12 program.
The rest were still enrolled as scholars as of the end of 2023, while the subsidy for 125 students had to be dropped or were due for termination. This outcome “affect[ed] the effectiveness” of the program, COA pointed out.
Scholarship privileges and incentives amounting to P39.3 million, also under this program, are subject to refund by the grantees due to their withdrawal or termination.
To recover the overpayments, COA advised CHEd to immediately order the concerned SUCs to return the flagged amounts, or to “avail other appropriate modes of settlement” in line with existing laws, “unless a justifiable reason” is raised.
For its part, CHEd informed COA that it has conducted a review of the school fees in question, and asked the auditors to reconsider and adjust the total overpayments flagged at P386.03 million, which will be reduced by around P116 million.
COA, in response, said that it would validate the adjustment “if found proper and warranted.”
