COA chides TESDA of using another gov’t agency to avoid returning P3B in unutilized funds

Published November 13, 2020, 8:27 PM

by Ben Rosario

A Commission on Audit report has chided the Technical Education and Skills Development Authority for making another government agency a depositary of over P3 billion in unutilized fund, apparently to avoid reversion of the money to government coffers or to evade other budgetary restrictions.


The 2019 TESDA annual audit report that COA released recently is bursting with adverse audit findings on violations of the procurement law and non-compliance to accounting and auditing procedures.

The audit report submitted by COA Director Elinore De Villa to TESDA Director General Isidro Lapena indicated the low employment rate for the agency’s various scholarship programs.

Under the Training for Work Scholarship Program, only 13,362 of the 208,530 graduates are employed.  For the Special Training for Employment Program (STEP), 1,498 landed jobs but this represents a small portion of the 49,651 graduates of the program.

For the Private Education Student Financial Assistance, 20,445 scholars graduated but TESDA found only 1,325 who were gainfully employed.

However, COA admitted that TESDA encountered difficulty in tracing the scholars who benefitted by landing jobs.

“But the Audit Team also has to consider the fact that it is really difficult to monitor the whereabouts of the scholars after the training and considering other factors for non-employment,” auditors said.

On the other hand, COA questioned the transfer of more than P3 billion to the Philippine International Trading Corporation which should have been aimed at facilitating the procurement of various goods and services.

State auditors pointed out that TESDA transferred most of the funds during the fourth quarter of 2019, making it difficult for PITC to speed up the purchases.

According to COA since there was a belated transfer of funds, it now “appears that the Agency may have taken advantage of the procurement outsourcing services to keep the unutilized fund to remain intact.”

In doing so, TESDA made PITC” a depositary of unutilzied funds for delayed or unimplemented programs and projects.”

“Moreover, 90 percent of the fund transfer or P2.7 billion pertains to the procurement of starter toolkits for TESDA’s UAQTEA  (Universal Access to Quality Tertiary Education Act) and STEP programs without reasonable basis whether this option is more efficient and economical and can address the recurring problem of delayed procurement of toolkits,” the report stated.

COA added: “As delay is already inevitable, it appears that the PITC was utilized as depositary of unutilized funds for unimplemented programs/projects to keep it intact and free from budgetary restrictions.”

State auditors observed that instead of returning to the Bureau of Treasury some  P744.25 million in unspent funds and savings, four TESDA regional offices retained the amount, thus exposing the funds to “risk of possible misappropriations.”  This practice also deprives government from spending the fund for urgent and priority projects.

In July, 2020, Lapena met with the PITC to discuss the audit observations raised by COA.

In its audit examination of UAQTEA program funds, COA found deficiencies in the procurement of instructional materials.

The deficiencies included purchase of several books from a “non-existing business establishment”, P905,606; flagrant violation of the rules for utilization of UAQTEA funds, P3,092,2729; purchase of assorted books from a non-bonafide  supplier, P958,000; purchase of flash drives and cellular phone unsupported by official receipt, P194,625; irregular disbursement of P3.3 million;  and incomplete supporting documents for purchases of instructional material, P2,542,900, among others.

The TESDA management gave explanations for each of the audit issues and vowed to address the audit recommendations made by COA.