Performance Audit Report on the
Special Education Fund
The provision of free elementary education is one of the priority programs of the government identified in the Medium Term Philippine Development Plan for the year 2001-2004. The provision of school education by the government carries with it the responsibility to provide facilities by which education will be delivered
The appropriation for school education in Calendar Years 2001 Ė 2002 for the Department of Education (DepEd) is P169.385 billion, the highest among all agencies, representing 12.73% of the total governmentís budget. Of the total budget, P1.609 billion was allocated for the procurement of textbooks.
For school year 2001-2002, there were 11,927,480 students enrolled throughout the country distributed in 16 regions. Of the total students, 139,744 were enrolled in 50 schools within the Division of Caloocan City.
The adequacy of textbooks largely relating to quantity access has been a long standing issue for a number of years. Newspaper articles, budget debates and the July 23, 2001 State of the Nation Address (SONA) of President Gloria Arroyo highlighted the importance of the provision of education including textbooks as a means of improving quality education. The government aims to increase the number of textbooks per student to strengthen and enhance the education services thereby developing a foundation of qualified resources to assist in the future economic growth of the Philippines.
The access of students to textbooks has an impact both on the effectiveness of the education system and the educational opportunities available to students. The importance of textbooks as a tool in the learning process has been recognized by the government. For this reason, the provision of textbooks was included in the Social Expenditure Management Project (SEMP) I of the government funded by the World Bank and implemented by the DepEd Main Office in coordination with the field offices (Region, Division and District Offices). Of the total loan amount of P2.963 B for the education component, P1.648B was allocated for the procurement of textbooks. SEMP I was intended to be implemented from February 2000 to December 31, 2002.
SEMP I aims to produce 25,000,000 textbooks for elementary and high school students by the end of 2002 in order to achieve a 1:2 textbook pupil ratio. The projected quantity of 25,000,000 to be purchased under the loan was computed by the DepEd based in an estimated cost of P70 to P 80 per book. The books however were actually acquired at a lower cost of P 30 to P 40 resulting in procurement of more books than the targeted quantity.
The DepEdís objective for SY 2001-2002 was to move to a textbook pupil ratio of 1:1 in 5 priority subjects (English, Math, Science, Filipino and Social Studies) for Grades I to IV. The textbook pupil ratio in School Year 1999-2000 as reflected in the briefing materials for the proposed DepEdís budget for calendar year 2001 was 1:5.
As of August 2002, approximately 42,213,558 books for elementary and secondary students nationwide, had been contracted by the DepEd to be funded under SEMP I of which 9,586,889 textbooks were allocated for the National Capital Region (NCR).
As the financing agency for SEMP I, the World Bank assesses the implementation and progress of the project on an on-going basis. In one of their Assessment Reports, it was noted that, there has been a number of long standing problems in the distribution and utilization of textbooks under the project including procurement and receipt, financial reporting, communication links between the Central and Regional Offices and links between planning and financial management functions. The absence of a reliable, integrated and timely information system was also reported to be a major weakness.
In addition to the loan secured to finance SEMP I, the Division Offices, including the Division of Caloocan City, also procure textbooks from their own appropriation of Maintenance and Other Operating Expenses (MOOE).
In order to further ensure the delivery of education services, the Special Education Fund (SEF) under the Local Government Units (LGUs) created under Republic Act No. 5447 was enacted by the Philippine Congress in 1969 for the purpose of providing additional financial support for education facilities and services as provided by the constitution. Among the activities to be undertaken through SEF is the procurement of textbooks.
Using SEF, the City Government of Caloocan procures textbooks for the use of schools under its jurisdiction.
The funding of textbooks for the educational needs of the National Capital Region is therefore being funded through three sources: SEMP I, the Divisional MOOE and the SEF. This sectoral audit focused on evaluating whether through the implementation of these programs, the governmentís objective of achieving 1:1 textbook pupil ratio for Grades I to IV had been attained. In the process, the team assessed the operations of the different agencies involved in meeting this objective by determining the textbook requirements and monitoring the progress of the program.
The audit objective was to assess whether the implementation of SEMP I and SEF have been effectively managed to contribute to the effective achievement of the governmentís objective of providing quality education thru the provision of textbooks, considering the determination of textbook requirements and distribution of available textbooks.
AUDIT SCOPE AND METHODOLOGY
The audit covered the implementation of textbook component of SEMP I and SEF programs of the government for elementary education from January 2001 to September 2002 intended for SY 2001-2002 considering the determination of textbook requirements and distribution of available textbooks. The agencies included in the audit were the DepEd Main Office, DepEd NCR, Division Offices and the LGUs in the Cities of Quezon, Caloocan and Mandaluyong.
As of audit date, the total textbook allocation from SEMP I in five priority subjects for Grades I to IV for the Division of Caloocan City was 386,993. Procurement of textbooks by the Division Office from January 2001 to September 2002 amounted to P97,449.80 while procurement by the City government out of SEF for the same period amounted to P413,000.
The performance of the City Government was assessed using the following criteria:
During the audit, the team performed the following procedures, among others;
The audit was conducted from July 18 to October 31, 2002 pursuant to COA Assignment Order No. 2002-023 dated July 18, 2002. The results of the audit were discussed with the City Mayor, the Division Superintendent and other City Government and Division Office Officials on October 30, 2002.
The DepEd thru the Division Office and the City Government of Caloocan have not effectively managed the implementation of SEMP I and SEF thru the determination of textbook requirements and distribution of available books contributing to a failure to attain the governmentís objective of achieving 1:1 textbook pupil ratio in five (5) priority subjects for Grades 1 to 4.
Textbooks procured by both Offices were sometimes the same books being addressed by the IMCS. As a result, as of August 31, 2002, available books in two (2) subjects exceeded the requirements by 6,633 while books in other subjects are still short by 290,751. The excess books will still increase to 33,288 due to the forthcoming deliveries of books from IMCS out of SEMP I 2000 Reorder. This reduces the effectiveness of the education services provided to students and wasted limited and valuable governmentís resources.
The excess books were among those procured by the IMCS under SEMP I, by the Division Office out of MOOE and by the City Government out of SEF.
The audit concluded that the shortcomings in the implementation of SEMP I, thru the Division Office, and SEF programs discussed above were caused by the following:
The audit covered the implementation of textbook component of SEMP I and procurement of books by the City Government and the Division Office from January 2001 to September 2002. The textbook program is again included in SEMP II to be implemented from September 2002 to December 2005 to complete the on-going reforms started in SEMP I. The City Government and the Division Office are also continuously addressing the textbook needs of students. Therefore, for a more effective implementation of SEMP II and SEF and to avoid the recurrence of the problems discussed above, the City Government and the Division Office should seriously consider addressing these concerns.
MANAGEMENTíS REACTIONS TO AUDIT OBSERVATIONS
The results of the audit were discussed with the City Mayor, Division Superintendent and City and Division Office officials in an exit conference conducted on October 30, 2002. The City Mayor acknowledged the teamís observations but did not provide written comments. On the other hand, the Division Office assured the team that they will consider the teamís recommendations.