CNU Smart Hub project: P28M gadgets left unutilized

CEBU, Philippines — At least 1,000 tablets worth P28.25 million are left to gather dust in storage room at Cebu Normal University (CNU) more than nine months after their delivery due to the delay in the university’s nearly ?948-million Centralized Student Smart Hub Project.

The tablets were delivered and accepted on May 14, 2025, but have yet to be used because of delays in completing the project’s smart e-library and related civil works, the Commission on Audit (COA) report said. As of February 2026, state auditors said the project was only 34.29 percent complete.

The 1,000 Apple iPad 10th-generation tablets, each with 64GB of storage, have been stored at the university’s Tandang Sora function hall instead of being used for their intended purpose.

State auditors said the prolonged storage exposed the equipment to possible damage, loss and technological obsolescence, raising concerns over the university’s management of government-funded assets.

"Moreover, this arrangement deprives the students and other stakeholders on the use of the function hall for its intended purposes," reads a portion of the report.

The tablets were part of the ?947,831,750 Centralized Student Smart Hub Project, which was intended to provide smart classrooms, electronic laboratories, an e-library, a learning management system and other information and communications technology facilities.

In a previous report published by The Freeman in January 2025, former CNU president Daniel Ariaso Sr. said his administration had secured nearly ?2 billion in funding for modernization projects and state-of-the-art technology initiatives.

Of this amount, ?998 million was allocated for the university’s Information and Communication Technology (ICT) modernization development program, while ?947 million was earmarked for the centralized student smart hub.

The projects were approved by the CNU Board of Regents under Resolutions No. 266 for the Smart Campus Project and No. 267 for the ICT Project. Both were awarded to Lancaster Technology and Development Corporation (LTDC).

The audit findings covered not only the idle tablets but also deficiencies in procurement, pricing, subcontracting arrangements and progress payments.

The  Board of Regents granted time extensions and suspended work through Resolutions No. 150 and 152, respectively, both series of 2025, amid implementation delays, the Sept. 30, 2025 earthquake in northern Cebu and pending clearance from the Office of the Building Official.

The unfinished smart e-library and related civil works prevented the tablets from being used despite their delivery and acceptance. The COA also warned that prolonged storage could affect the equipment’s warranty coverage.

Since the one-year warranty period began upon delivery and acceptance, defects discovered after extended storage could potentially fall outside the warranty period.

The Tandang Sora function hall, normally equipped with sound and lighting facilities for university events, had also been converted into a storage area, depriving students and other stakeholders of its use.

Other equipment, including 75-inch interactive display boards and network cameras, was also stored in the facility, the report said.

The audit likewise found deficiencies in the documentation of equipment distributed under the project.

Of the 280 Apple MacBook Air M2 laptops delivered, worth a total of ?22.05 million, only 139 were covered by Property Acknowledgment Receipts (PARs).

The remaining 141 laptops had been distributed without the required PARs, contrary to Section 2 of Presidential Decree No. 1445, which governs the proper administration and accountability of government property.

Procurement process questioned

Beyond the implementation delays, the COA raised concerns over how the ?947.83-million project was procured and evaluated.

The university entered into the contract with Supplier A on Oct. 1, 2024, under the 2016 Revised Implementing Rules and Regulations of Republic Act No. 9184, or the Government Procurement Reform Act.

The audit team found that the bidding documents posted on the Philippine Government Electronic Procurement System did not include plans and drawings for converting conventional classrooms into smart classrooms and electronic laboratories.

Detailed cost estimates for items under the different project components were also missing, while certain items in the terms of reference lacked technical specifications.

"The foregoing conditions indicate that the detailed engineering requirements and cost estimates for the civil works component were not fully established prior to the conduct of the procurement," the COA report said.

"These omissions diminish transparency in the procurement process and raise questions as to how the winning bidder was able to submit a responsive bid for the project despite the absence of the pertinent plans, drawings, detailed engineering information and cost estimate," it added.

The project was classified as a procurement of goods because information technology equipment, software and systems accounted for a greater share of the project than civil works.

However, the COA said the mixed nature of the procurement required the university to specify the conditions applicable to each component under Section 17.2 of the revised implementing rules of RA 9184.

In its response, the Bids and Awards Committee (BAC) maintained that detailed engineering designs were not mandatory because the project was classified as a procurement of goods.

It also said the terms of reference had been reviewed by the Department of Information and Communications Technology (DICT) and found consistent with the university’s Information System Strategic Plan.

Red flags on bid prices

The COA also flagged discrepancies in the winning bidder’s price schedule, including items whose quoted prices substantially exceeded their approved budgets.

The learning management system under Component 6 had a bid price of ?307.23 million, exceeding its approved budget of ?35.76 million by ?271.47 million, or 759.14 percent.

Component 7, which included human virtual artificial intelligence, had a bid price of ?204.455 million against an approved budget of ?15 million, exceeding the allocation by ?189.455 million.

The price schedule also included a separate ?28.25-million line item for the supply and delivery of tablets under Component 7, although the item was not listed as a separate component in the invitation to bid or the terms of reference.

The COA said including an unrequested component was inconsistent with Section 32.2.1 of RA 9184, which requires complete bids to be evaluated using non-discretionary criteria.

The audit team further noted that the BAC technical working group completed its bid evaluation on July 23, 2024, the same day the evaluation was conducted, despite the project’s technical complexity and substantial cost.

The BAC maintained that the evaluation considered the totality of the bid offer and that the total calculated bid price remained within the overall approved budget of ?950 million.

The audit also questioned the approved budgets and bid prices of several information technology and other equipment items after comparing them with prevailing market prices.

A 75-inch interactive display board had an approved budget of ?700,000 per unit, while the bid price was ?470,000. The audit team cited a market price of ?188,954, a difference of about ?281,046 per unit.

For 34 units, the difference between the bid price and the cited market price amounted to approximately ?9.56 million.

A Hikvision TCP/IP-based CCTV camera was priced at ?180,000 per unit, compared with a cited market price ranging from ?31,000 to ?35,000.

A dome network camera was priced at ?85,000, against a cited market price of ?65,495.

The COA also questioned the university’s market research documentation, noting that the Information System Strategic Plan placed the estimated unit cost of a smart interactive board at ?216,320.39, substantially below the ?700,000 approved budget.

University management cited freight, taxes, installation, training and inflation as factors considered in its pricing, and said the costs were aligned with its information systems plan.

"They further asserted that installation costs were incorporated into the unit prices, which would understandably result in higher costs compared to baseline market prices that typically reflect supply only," the annual report explained.

However, the audit team stressed the need for thorough market research, particularly for information technology equipment whose prices can change rapidly because of technological developments.

The state auditors also questioned the arrangements for the learning management system, which accounted for a substantial portion of the project’s cost.

The system was initially assigned to Y Corporation before Supplier A sought approval to replace it with X Corporation for the ?307.23-million component. The change was approved by the previous university president and the Board of Regents on May 14, 2025.

Separately, the COA questioned a gross progress payment of ?262.746 million for four learning management system modules: administration, professor, student and parents.

The contract’s special conditions stated that progress payments were not applicable, and no payment milestones had been stipulated.

Nevertheless, the university paid the amount for the modules’ perpetual licenses based on a validated Statement of Work Accomplished.

A certificate of inspection dated May 15, 2025, stated that the modules were only partially delivered for payment purposes and that their necessary functions could be tested after system analysis and completion of the project.

The COA questioned the payment because the modules’ functionality had yet to be demonstrated through the necessary testing, raising concerns over whether the payment was adequately supported by evidence of completed and functional deliverables. — (FREEMAN)