COA flags UP over P15 billion investments

MANILA, Philippines — The Commission on Audit (COA) has called out the University of the Philippines (UP) over allegedly questionable investment undertakings totaling P15.055 billion.

“Deficiencies were observed on the investment undertakings of the university amounting to P15,055,304,258.31, thereby affecting the reliability and propriety in the disposition of funds through investments and the manner of utilizing income,” the COA said in its 2022 annual audit report on the UP System.

Specifically flagged by the audit body was the UP Diliman’s placement of P400 million of its allotments and trust funds into time deposits “instead of using the funding for the purposes intended.”

The COA noted that “trust funds are not among the income contemplated in Republic Act 9500 or the UP Charter, which may be invested at the discretion of the university.”

The audit body cited Section 4.3 of Presidential Decree No. 1445 or the Government Auditing Code of the Philippines and Section 6 of the 2022 General Appropriations Act, which both state that “trust funds shall be available and may be spent only for the specific purpose for which the trust was created or the funds received.”

As for the investment of unutilized fund allotments from Congress, the COA cited Item No. 3.7 of the Department of Budget and Management National Budget Circular No. 587 dated Jan. 3, 2022, which states that “after the end of the specified applicable validity period, all unreleased appropriations or undisbursed funds shall revert to the unappropriated surplus of the general fund...and shall not be available for expenditure except by subsequent legislative enactment.”

Also flagged was the UP Mindanao’s placement into time deposits of P18.048 million in reprogrammed funds and P10.316 million in unutilized Trust Fund.

The COA said Section 10 of RA 11639 directs all state universities and colleges as well as government-owned and controlled corporations enjoying fiscal autonomy to “revert all balances of Special Accounts, Fiduciary or Trust Funds and Revolving Funds to the General Fund... when they are no longer necessary for the attainment of the purposes for which said funds were established.”

The UP Manila was called out for its investments in bonds and treasury bonds amounting to P234 million.

“The investments were placed for a period of more than two years, considering that UP’s funds are not idle and intended to be used to finance the university’s lined-up projects and commitments,” state auditors said.

The COA noted that as of Dec. 31, 2022, UP Manila had total investments amounting to P7.806 billion.

UP Baguio was flagged for investments in treasury bills, treasury bonds and time deposits totaling P741.399 million despite lack of any approved guidelines.

“The mentioned UP campuses’ lack of transparency in the nature of the funding placed for investments deprived the public of relevant information on the utilization and whereabouts of public funding that goes into the coffers of the university,” the COA said.