2011
UNIVERSITY OF THE PHILIPPINES: MOOE ALLOCATION
APIT, Abraham Jose
MONDRAGON, Rey Mark
Accounting 12.2
1/9/2011
Table of Contents
CHAPTER 1 ............................................................ 3
CASE BRIEF ......................................................... 3
MANAGEMENT’s DILEMMA ............................................... 3
MANAGEMENT’s QUESTION .............................................. 4
RESEARCH QUESTIONS ................................................. 4
CHAPTER 2 ............................................................ 5
INDUSTRY ........................................................... 5
Brief Description: ............................................... 5
Regulating Agencies: ............................................. 5
Nature of Activities: ............................................ 7
Accounting Practices: ............................................ 8
Types of funds: .................................................. 8
Regulatory Constraints: .......................................... 9
NATURE OF THE ENTITY .............................................. 11
CHAPTER 3 ........................................................... 14
References: ......................................................... 22
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CHAPTER 1
CASE BRIEF
The newly appointed Vice President for Planning and Finance
of the University of the Philippines is faced with the problem
of a reduced budget for Maintenance and Other Operating Expenses
(MOOE) for the CY 2000. As a first step, she reviewed the
previous year’s MOOE allocation and found herself unsatisfied
with the way the allocation was done. To address this matter,
she then called up a meeting with the unit heads of the
different autonomous campuses of UP to discuss the issue on the
reduced budget. Different problems and arguments were raised by
the said unit heads regarding the previous year’s budget. This
was then taken into consideration by the VP for Planning and
Finance in coming up with a formula that would objectively
allocate MOOE among the campuses. Additional data, considered as
important by the VP, were gathered to aid her in the process.
MANAGEMENT’s DILEMMA
The MOOE budget allocation, as perceived by the Vice
President for Planning and Finance is inadequate in responding
to the different needs of the constituent universities. This is
because the bases for allocation included only few variables
(i.e., number of students, presence of laboratory requirements
per campus). There are also biases from the congressmen and DBM
that were considered in the budget allocation. Some of these
biases are political in nature. In addition, the proposed budget
of the different universities is subject to the influence of the
president’s thrusts. Hence, the heads of the units need to
integrate the priorities of the president in their proposed
budget.
With this, the VP is facing the dilemma of how will she
allocate the budget. Will it be following the previous
allocation which is inappropriate yet conforms the president’s
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thrusts or make her own allocation basis which she believes is
fair but might not get the president’s approval?
MANAGEMENT’s QUESTION
Considering the dilemma above, how can the management of
UP, specifically the VP for Planning and Finance, achieve and
implement a more objective process of coming up a MOOE budget
allocation formula that is commensurate to the different needs
of the constituent universities and that will probably get the
president’s approval?
RESEARCH QUESTIONS
These are the research questions we would like to explore
in this case study:
a. What is MOOE and the common classifications of expenses
included in it?
b. What are the most appropriate bases or critical variables
to be considered in allocating the appropriated MOOE budget
to the entire UP system?
c. Is the additional information gathered by the VP for
Planning and Finance adequate enough in order to create a
budget allocation that is reasonable considering the
circumstances at hand?
d. Why should a budget allocation made from the information
gathered by the VP for Planning and Finance be pursued even
if it may not otherwise be totally in accordance with what
the president wants?
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CHAPTER 2
INDUSTRY
Brief Description:
The Philippines is considered to be one of the most highly
educated middle-income countries. It has high enrollment rates
at all levels of education and it has achieved near universal
access to primary education (World Bank website 2008). The first
baccalaureate degree granting institution is the University of
the Philippines.
Regulating Agencies:
On May 18, 1994 through RA No. 7722 or the Higher Education Act
of 1994 authored by Senator Francisco Tatad, the Commission on Higher
Education (CHED) is created. The CHED oversees the higher education
system. It is an agency attached to the Office of the President of the
Philippines for administrative purposes.
CHED is responsible for administering and supervising both
public and private higher education institutions in the Philippines.
Higher education institutions establish and maintain their own
internal organization. The framework of their organization is
generally divided into two areas, namely: policy formulation and
policy implementation. The formulation and/or approval of all
policies, rules and standards in the school is the main function of
the Governing Board. The implementation of policies and the management
of the school operations are vested in the administration headed by
the President.
The SUC's autonomy is assured by their individual charters. They
are authorized to open curricula and institutional programs, and award
their own degrees. However, on July 22, 1997, a landmark legislation
was made enacting into law Republic Act 8292 otherwise known as the
"Higher Education Modernization Act of 1997."
This Act provides among others for the uniform composition and
powers of the governing boards of SUCs with the Chairman of CHED as
the Chair of the governing boards of all SUCs (previously chaired by
the DECS Secretary). With this new set-up, in effect this places all
SUCs under the supervision, policy and development mandate of CHED.
This enables the CHED to exert influence or provide proper guidance on
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the quality and directions of the academic programs as well as on the
internal operations of the SUCs.
The private institutions, on the other hand, experience some
degree of freedom only when their programs are Level III accredited.
This means they are already deregulated and can initiate reforms in
their curricular offerings without the need for CHED's approval.
Otherwise, private schools have to apply for permit from CHED to open
a course, and they have to apply for recognition of their programs in
order to be allowed to graduate their students. Recognition of
programs is granted if the institutions have fully complied the
minimum requirements prescribed by CHED.
With regard to awarding of certificate, diploma or degree to
students, this is done only if all academic requirements have
satisfactorily been completed by the students. After verification of
the information, the CHED issues a "Special Order" number which is
noted in the student's transcript of records.
In the case of CHED-supervised institutions and local
universities and colleges, the CHED monitors the implementation of
policies, rules and standards. These institutions have to secure
authority from CHED if they want to open a course. If their program
offerings have the necessary authority from CHED (or DECS previously),
their graduates are automatically recognized.
Higher Education Institutions:
The Philippine Higher Education Institution is categorized
into: private and public. Each higher education adopts a certain
admission policy beyond the general requirement that all
candidates have to be graduates of secondary education. Some
institutions require passing an entrance exam and a medical
examination; others adopt open admission, but selective
retention.
Further, Philippines has relied on private institutions
and, at the turn of the century, private institutions have
increased in numbers. As of August 2010, there are 2,180 HEIs
geographically distributed over the country. There are a total
of 1,573 and 607 private and public HEIs, respectively.
The Public HEIs, on the other hand, include: 110 SUCs
main campuses, 388 satellite campuses, 93 LUCs, 10 Other
Government Schools, one (1) CHED Supervised Institution (CHEDARMM) and five (5) special HEIs.
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The State Universities and Colleges (SUCs) are chartered
public higher education institutions established by law,
administered and financially subsidized by the government. SUCs
have their own charters. The Board of Regents (BOR) for state
universities and a Board of Trustees (BOT) for state colleges
maintain the formulation and approval of policies, rules and
standards in SUCs. The Chairman of CHED heads these boards.
However, CHED Order No. 31 series of 2001 of the Commission en
banc, also authorizes CHED Commissioners to head the BOR/ BOT of
SUCs. Implementation of policies and management are vested on
the president, staff, and support units of the public higher
education institutions.
The local universities and colleges (LUCs) are those
established by the local government through resolutions or
ordinances. LUCs are financially supported by the local
government concerned. A CHED Supervised Institution (CSI) is
non-chartered public post-secondary education institution
established by law, administered, supervised and financially
supported by government. Other government schools (OGS) are
public secondary and post-secondary education institutions,
usually technical-vocational education institutions that offer
higher education programs. Special HEIs are directly under the
government agency stipulated in the law that created them. They
provide specialized training in areas such as military science
and national defense.
Nature of Activities:
The activities of an educational institution may be
classified as (1) instructional, (2) administrative, and (3)
auxiliary. Instructional activities include both resident &
extension instructions, public services, organized research, and
the operation of libraries. Administrative activities include
staffing and promotion, registration and enrolment, operation of
business office, and operation and maintenance of the
educational plant. Auxiliary activities include the operation of
residence halls, dining rooms, college unions and bookstores,
health centers, and athletic and cultural programs.
Revenues in support of these different activities are
provided by such varied sources as contributions, governmental
appropriations, student fees, endowment income, and revenues
from the sale of goods & services.
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Accounting Practices:
Considering these activities of the educational
institution, a “modified accrual basis” of accounting is
generally employed in summarizing the operations of the state
universities and colleges (SUCs). Since the primary purpose of
accounting for educational institutions is to report on the
stewardship of the funds and property entrusted, rather than to
determine the net profits and net worth (American Council of
Education). However, privately-owned institutions do not receive
any appropriations. Therefore, the accrual method is commonly
followed.
Depreciations, in addition, are rarely recognized on
properties that are used for educational functions by SUCs.
However, these are appropriate under following circumstances:
a. When certain properties of the educational plant render a
service function and the institution plans to replace
such properties from operating revenue.
b. When properties are identified with auxiliary enterprises
that are expected to be self-supporting- bookstores,
cafeterias and dormitories, for example.
c. When properties are transferred to the educational unit
under the terms of endowment that limit expenditures from
endowment resources for general and specific purposes to
periodic net income after the recognition of
appropriation charges for depreciation.
Types of funds:
SUCs are highly subsidized by the government. Funds are
further grouped into: current fund (restricted and
unrestricted), loan funds, endowment and other nonexpendable
funds, annuity funds, plant funds- which is subdivided into:
unexpended plant fund, retirement of indebtedness fund, and an
invested in plant section, and agency funds.
Current funds are composed of current resources that are to
be employed in meeting obligations arising from the general
operations of the educational institution, with or without
restrictions. Student fees and resources from gifts, for
example, that carry no specific limitations as to use, then, are
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reported in the current unrestricted fund. On the other hand,
resources from gifts that can be spent only for specified
purposes, such as for the library, for scholarship, for an
athletic program, or for research, would be classified as
current restricted funds.
Loan funds consist of resources that are available for
loans to student. These funds originate from gifts which may be
built up over a period of time from student fees collected for
such purpose or from transfers from endowment fund whose income
is available for such purpose. However, loan fund balances will
change as a result of uncollectible loans, fund administrative
expenses and the like.
Endowment funds are formed when cash or other properties
are transferred to the institution under conditions that provide
only the income produced by such resources can be used for the
institution.
Annuity funds, on the other hand, are formed when cash and
other properties are transferred to the institution subject to
the requirement that specified payments be made to a designated
beneficiary during his lifetime. However, these funds are
sometimes included with endowment fund for accounting and
reporting purposes.
As indicated by its name, plant funds are resources related
to educational plant while agency funds are funds given to
educational institution which acts as an agent or trustee;
holding certain asset on behalf of others, for example, student
deposits and tax withholding amount.
Regulatory Constraints:
Budgetary allocations and allotment received by SUCs depend
on the budget proposals made by the Department of Budget and
Management (DBM) which is duly approved by the Congress. It is
then believed that some legislators want to allocate more funds
in the region that support their candidacy.
As of this year, SUCs will experience drastic cuts in their
budget if the Congress approves the Aquino government’s 2011
budget proposal.
In the budget proposal submitted by the Department of
Budget and Management (DBM) to Congress last August 25, the
combined budget for 110 SUCs is cut by 1.7% from P23.8 billion
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in 2010 to only P23.4 billion this year.
Among those with the biggest budget cuts are University of
the Philippines (-P1.39 billion or 20.11%), Philippine Normal
University (-P91.35 million or 23.59%), Bicol University (P88.81 million or 18.82%), University of Southeastern
Philippines (-P44.39 million or 20.03%), Central Bicol State
University of Agriculture (-P31.65 million or 15.91%).
Huge cuts are proposed in the budget for maintenance and
other operating expenses (MOOE) of all but 15 SUCs, some by more
than 50%. The combined total operations budget for SUCs will be
cut by P1.1 billion, or by 28.16%.
Budget distribution:
The DBM has devised a scheme to check fund allocations for
each school through a system called “normative clemency.”
This is based on the three major types of government
expenditures: capital outlays which deal with financing building
construction; personal services, which cover faculty salaries;
and maintenance and other operating expenditures, which cover
electricity, water, telephone, and janitorial services.
Normative clemency ensures that no SUC will have an excess
or lack of funds for all three types of expenses, because they
are mandated to submit proposed expenses to both the Commission
on Higher Education (CHED) and the DBM.
Tax Exemption:
Per section 30 of National Internal Revenue Code of the
Philippine, income from government educational institutions are
duly exempted from income tax.
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NATURE OF THE ENTITY
The University of the Philippines is the national
university of the country. It was established on June 18, 1908,
an act of the First Philippine Legislature. Act No. 1870,
otherwise known as the "University Act", specified the function
of the University, which is to provide advanced instruction in
literature, philosophy, the sciences, and arts, and to give
professional and technical training.
At present, the University of the Philippines System is
composed of seven constituent universities (CU) located in 12
campuses around the country. These are UP Diliman, UP Los Banos,
UP Manila, UP Visayas, UP Mindanao, UP Open University, and UP
Baguio. UP Diliman is the flagship campus of the university and
offers the most number of courses.
Each constituent university of UP is headed by a
chancellor, who is elected on a three-year term by the Board of
Regents. The governance of the University is vested in the Board
of Regents of the University of the Philippines System. The
board, with its 12 members, is the highest decision-making body
of the U.P. system.
The Chairperson of the Commission on Higher Education
(CHED) serves as the Board's acting Chairperson while the
President of the University of the Philippines is the CoChairperson. The Chairpersons of the Committees of Higher
Education of the Senate and the House of Representatives are
members of the UP Board of Regents which are concurrent with
their functions as committee chairpersons.
The University offers 246 undergraduate degree programs and
362 graduate degree programs, more than any other university in
the country. The flagship campus in Diliman offers the largest
number of degree programs, and other campuses are known for
specific programs. The University has 57 degree-granting units
throughout the system, which may be a College, School or
Institute that offers an undergraduate or a graduate program.
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At present, the university has a total student population
of 53,285; 4,135 faculty, trained locally and abroad with 75%
having graduate degrees; administrative staff and personnel of
6,491; and 3,553 PGH staff.
The University is one of the three Universities in the
Philippines affiliated with the ASEAN University Network, and
the only Philippine university to be affiliated with the ASEANEuropean University Network and the Association of Pacific Rim
Universities.
The University has the highest financial endowment of all
educational institutions in the Philippines. In 2008, the entire
University system has a financial subsidy from the national
government of about PHP 6 billion. The total expenditure for the
same year, however, is PHP 7.2 billion, or approximately PHP
135,000 per student.
This estimated PHP 1.2 billion difference is supported by
other funds. These include general fund, revolving fund, trust
fund- student fees, and central fund. Central funds can be
tapped for the non-recurring expenses, for instance,
supplementary miscellaneous expenses. Central funds comprise of
general maintenance funds, faculty development funds, staff
development funds equipment fund, and reprogrammed or programmed
funds for PS, MOOE, or CO.
Trust fund, in addition, covers the laboratory fees,
educational development fees, library fees, athletic fees,
cultural fees, and medical fees paid by the students.
Admission, however, into the University's undergraduate
programs is very competitive, with over 60,000 students taking
the exam every year, with about 11,000 being accepted, an
admission rate of about 18%. Admission to a program is usually
based on the result of the UPCAT (UP College Admission Test),
and University Predicted Grade, which is an average of grades
obtained during high school and sometimes, a quota set by the
unit offering the program.
As it is funded partly by the Philippine government, and
private donations, the UP student shoulders a minimal tuition
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fee which is appropriately less than half than that of other
universities like the Ateneo de Manila, La Salle University and
the University of Santo Tomas, while providing a wider range of
courses and programs. At present, the estimated annual tuition
fee of UP is PhP 36,000 good for two terms at PhP 1,000 per
unit.
The Socialized Tuition and Financial Assistance Program
(STFAP) was implemented in response to the increase in tuition
in 1989. The program, proposed in 1988 by U.P. President Jose
Abueva and mandated by the President and Congress of the
Philippines, called for a radical departure from the old fee and
scholarship structure of UP, resulting in tremendous benefits
for low-income and disadvantaged Filipino students. The STFAP is
divided into four basic components: Subsidized Education,
Socialized Tuition, Scholarships and Student Assistantships.
Through the Socialized Tuition and Financial Assistance Program
(STFAP), more popularly known as Iskolar ng Bayan, students
avail of discounted tuition fees to full tuition fee waivers,
plus cash subsidies, according to their individual income
brackets.
Most colleges in the UP System offer scholarship
opportunities in different programs — from the arts to the
sciences. Some of the scholarships available throughout the UP
System are the Oblation scholarship for the top fifty (50)
passers of the UPCAT, the UP Government Scholarship, the
Presidential Scholarship Grant, the Leadership Grant and various
private grants, all administered through the Office of
Scholarships and Student Services (OSSS).
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CHAPTER 3
1. What is MOOE and the common classifications of expenses
included in it?
Maintenance and Other Operating Expenses (MOOE) is one of
the general classifications of expenses in the operation of a
government institution. Other classifications include the
Personal Services, Capital Outlays and Financial Expenses.
MOOE includes expenses necessary for the regular operations
of a government agency like, among others, traveling expenses,
training and seminar expenses, water, electricity, supplies
expense, maintenance of property, plant and equipment, and other
maintenance and operating expenses.
The Chart of Accounts of the New Government Accounting
System of the Philippines lists the following expense line items
as composing the MOOE:
a. Traveling Expenses
b. Training and Scholarship Expenses
c. Supplies and Materials Expenses
d. Utility Expenses
e. Communication Expenses
f. Professional Services
g. Repairs and Maintenance
h. Subsidies and Donations
i. Confidential, Intelligence, Extraordinary and Miscellaneous
Expenses
j. Taxes, Insurance Premiums and other Fees
k. Non-Cash Expenses (Bad debts, Depreciation, etc.)
l. Other Maintenance and Operating Activities
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2. What are the most appropriate bases or critical variables
to be considered in allocating the appropriated MOOE budget
to the entire UP system?
Budget preparation is one of the difficult and timeconsuming, yet also one of the indispensable and beneficial,
activities that an organization’s management performs in line
with its vision, mission and goals. An organization can benefit
from creating a budget that shows how it plans to use its
resources and to make sure that its spending doesn’t get out of
control. By carefully planning how the organization spends and
saves its resources, it shall have a better chance of reaching
its goals.
As ruled, allocations of funds for expenditures to SUCs
shall be based on Normative Funding, as detailed in a joint
circular dated 2004 authored by the heads of DBM and CHED. This
Normative Funding shall serve as a tool for planning, preparing,
implementing and checking the budgeting process of an SUC.
In the UP budget process, the VP for Planning and Finance
has the following responsibilities:
a. Reviews the consolidated budget prepared by the UP’s
Budget Office in the early phases of budget preparation.
This budget is to be submitted to DBM for review and
revisions in the preparation of the General
Appropriations Act(GAA);
b. After the submitted budget is approved by the Congress
and the President of the Philippines, the VP reviews the
budget ceilings prepared by the Budget Office. The budget
ceilings are prepared for the UPSA units and the
autonomous campuses and shall be used in the preparation
of the Internal Operating Budgets (IOB) for said
units/campuses;
c. Helps in the preparation of IOB and reviews it before
requesting the university president to recommend the IOB
to the Board of Regents (BOR).
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The MOOE appropriated is generally subdivided into two
parts: MOOE for academic programs and the UP system
administration (UPSA); and MOOE for autonomous campuses.
In the case presented, the allocation is on the ratio of
66:34 for the UPSA and for the campuses, respectively.
Meanwhile, it is shifted into 62:38 in the following year. The
analysis is presented in the table that follows.
Maintenance and Other Operating Expenses (MOOE) Budget *
CY 1999
Ratio**
CY 2000
Ratio
Academic programs & UPSA
602,124, 000
66%
403, 561, 000
62%
Autonomous campuses
313, 801, 000
34%
250, 000, 000
38%
TOTAL
915, 925, 000
100%
653, 561, 000
100%
*Budgets are based on the figures presented in the case.
**Ratios are rounded-off to nearest whole number.
The VP for Finance and Planning should have allocated the
MOOE on the same ratio as of the previous year for the following
reasons:
a. Any cut in the MOOE budget must be applied across the
board on a pro-rata basis using the previous allocation.
It is quite unfair that academic programs & UPSA will
suffer a 33% decrease compared to the 20% decrease on
autonomous campuses; and,
b. Considering the thrust of higher authorities which is, UP
being a premiere university, should be promoting graduate
programs. Thus, any cut-back will impair the programs. A
4% variance in the budget allocation, roughly 26 million,
will greatly affect the performances of academic
programs.
However, it will be reasonable also to make the allocation
on a ratio of 62:38 considering also the demand of the
autonomous campuses. Different UP campuses offer different
programs and perform the trifocal function of SUCs, that is,
instruction, research and extension services in varying degrees.
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Now, the task of the VP for Planning and Finance is the
preparation of a reasonable budget allocation of MOOE to UP’s
constituent universities considering the budget cut. Critical
variables for budgeting should be properly taken into
consideration in order for the VP to achieve this goal.
To start, the VP may base this year’s budget on the
previous year’s actual expenses. Then, s/he may analyze the cost
drivers for MOOE for Instruction, MOOE for Research and MOOE for
Extension services by asking appropriate officers. These cost
drivers should be used in the allocation and should be as
detailed as possible in order to have a greater probability of
meeting actual expenditures. For example, the number of
buildings used to compute repairs may be broken down into number
of classrooms and adjusted for the age of such properties.
To be taken into analysis also is the varying degrees of
activities and achievements in the three functions of the
university. Priority allocation may be given to campuses whose
performance on a certain area might be greatly affected if
allocated a budget materially different from what it proposes
right from the start. For example, a campus suffers a decrease
in its licensure examination passing rate because of a reduced
budget for instruction. This is to ensure that the expenditure
funds go to where they are most worthy for.
After creating a preliminary budget based on these data,
adjustments may be made based on the campus’ ability to generate
income or cash flows out of its available funds. For example, a
campus is doing well in research activities and surely needs
funds for it to maintain or improve this status. It may still be
allocated funds way below its proposed budget if it generates
surplus funds from other sources. These surplus funds may serve
as a complement to the appropriated budget.
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3. Is the additional information gathered by the VP for
Planning and Finance adequate enough in order to create a
budget allocation that is reasonable considering the
circumstances at hand?
The additional data gathered by the VP as extracted from the
case include the following:
a. Number of students per campus based on predetermined
weights;
b. Number of students with laboratory subjects;
c. Number of Faculty and Research and Extension Personnel
Staff (REPS);
d. Number of Faculty, REPS, and Administrative Personnel;
e. Number of Buildings;
f. Number of Campuses.
For us, these data is helpful but not adequate enough to
address the problem on formulating a reasonable budget.
In order to have an objective and reasonable budget, all
data that would be gathered by the VP from the suggested
activities mentioned in the earlier discussion (answer to
number 2) should be integrated in the drafting of the budget.
The cost drivers or bases used in allocating budget to MOOE
for Instruction may be different from the ones to be used for
Research or Extension Services. Or it may use the same drivers
if reasonable, but the level of activity associated should be
considered. For example, student activity is expected to be
higher in Instruction than in Extension.
In MOOE for Instruction for example, the common applicable
drivers that could be used may include all of the data listed
in a to f but certain adjustments may be made such as the
following:
a. The weights reflected in the number of students are based
only on the level of education of a student. Weights to
reflect the respective courses of tertiary students
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should also be reflected because some courses are costly
than the other in terms of MOOE;
b. Excluding the Research and REPS from the analysis because
these data is most appropriate for MOOE for Research and
Extension;
c. Detailing the number of buildings as to how many are used
only for instruction;
d. Detailing the classified buildings as to number of
classrooms.
The above adjustments may be applied in the same logic to
MOOE for Research and for Extension.
It should be noted that the data presented are applicable
only in making the preliminary cost budgets. Adjustments to
reflect a campus’ liquidity and profitability advantages could
not be made using only these data. Hence, the VP may gather
the following data from the previous school year to address
this problem:
a. Statement of Operations of the individual campuses in
order to assess their profitability;
b. Statement of Cash Flows in order to have an idea of the
different sources of cash inflows and outflows and as
well as the magnitude of these cash flows;
c. Statement of Financial Position for the computation of
liquidity and other financial ratios that may be used in
the analysis.
4. Why should a budget allocation made from the information
gathered by the VP for Planning and Finance be pursued even
if it may not otherwise be totally in accordance with what
the president wants?
A budget allocation that would be made using the discussed
procedures should be pursued because of the following reasons:
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a. Budgeting based on detailed data is beneficial because
there’s a greater chance of meeting anticipated costs. Take
note that the budget would be used in calculating tuition
fees and other fees of the students. If the budgets
prepared are based on inappropriate drivers, the resulting
calculations for fees of students might be much higher or
lower, or fees of students in one campus might be much
higher or lower when compared to other campuses and may
prove inequitable.
The problem on budget cuts for SUCs is still around in
today’s times. It is reflected in the recently approved
2011 national budget. The reduced budget for SUCs elicits
varied comments from the people (specially the students)
noting that increases instead for debt servicing, military
spending and ‘corruption funds’ (pork barrel, dole-out and
patronage funds) were pursued.
We think that this way of budgeting would help carry
on one of the important roles of the State as stated in
Article 14, Section 1, of the Philippine Constitution,
which says that “The State shall protect and promote the
right of all citizens to quality education at all levels
and shall take appropriate steps to make such education
accessible to all.”
When equitable fees are charged by the University and
other SUCs, there’s a better chance for Filipinos to avail
of higher education and earn a degree considering that
private schools are a lot more expensive. This would
further help them land a job and improve the economic
status of the country. As observed, the effects are spilled
over positively.
b. The budgeting would, in effect, allow cost-sharing among
the campuses. Since the constituent universities have the
same mandates and are under the same system, it is but
justifiable for them to undertake such kind of strategy.
This helps maximize the use of idle excess funds of other
campuses. But this does not mean that the less productive
campus would exploit the financial wellness of the other.
The System should also devise a scheme of giving job
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credits to the heads of a unit who performs well in terms
of income generation so that they would be inspired to
continue their ways. On the other hand, the heads of the
unit who performs subpar from expected should be monitored.
They should also be inspired to undertake revenuegenerating activities if these are feasible considering the
available funds under their control. The effects of these
strategies would likely result to the formation of a
management who always strives for the best and not just
settle for mediocrity.
c. If fees are equitable and when budgets allocated to
campuses are commensurate with what they need, then the
University’s status as a premier university would likely be
improved because of the following:
- Satisfaction of students, hence, more and more students
will likely be inspired to enroll
- Higher rates of graduates because of affordable fees
- Catalyst for curbing unemployment rate of the country
because UP graduates will likely easily find a job
- Satisfaction of managers, hence, they will likely work with
enthusiasm and thus would result to reaching organizational
goals
- An overall improvement in the financial status of the UP
System
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References:
http://www.upd.edu.ph/~ovca/budgethome.htm
http://officialweb.upm.edu.ph/studentsupport.php
http://www.thepoc.net/blogwatch-features/10441-faq-aquinosbudget-cut-on-sucs.html
http://www.mb.com.ph/articles/289779/abad-seeks-understandingbudget-cut-sucs
http://www.senate.gov.ph/press_release/2010/1214_angara2.asp
1987 Constitution of the Philippines
www.dbm.gov.ph/GAA2010/SUCS/SUCS_Provision.pdf
http://www.rihed.seameo.org/index.php?option=com_content&task=vi
ew&id=34&Itemid=41
http://colleges.indiaedu.com/asia/philippines/higheducation.html
National Internal Revenue Code of the Philippines
www.up.edu.ph/pdf2/senate_resolution_51.pdf
www.thepoc.net/.../9585-aquino-slashes-budget-of-state-schools-in2011-proposal.html
Punzalan, A. Cardona, M. Government Accounting System, revised 2009
edition. Manila, Philippines: GIC Enterprise & Co, Inc., 2009
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