TESDA clarifies COA-flagged transactions, use of dev't fund

August 26, 2019

The Technical Education and Skills Development Authority has clarified reports of the Commission on Audit (COA) regarding the agency’s Php 403M flagged transactions as well as the alleged inappropriate use of the TESDA Development Fund (TDF).

TESDA Secretary Isidro Lapeña, said that 75% or Php 301 million of the flagged amount has already been complied in accordance with the regulations of COA.

This follows after a number of news articles have described how, according to a Commission on Audit report in 2018, the agency processed transactions with incomplete documents.

“Deficiencies in requirements do not necessarily invalidate a transaction.  We have always worked closely with the COA to ensure that all our financial undertakings are in order and strictly monitored,” Lapeña said.

The largest of these transactions reportedly inadequately supported are investments in securities amounting to around Php 170M, the copies of Certificates of Sales for which have since been submitted to the COA, satisfactorily complying with their requirements.

Similarly, supporting documents for disbursements previously tagged deficient, namely, scholarship expenses in NCR and various operating costs in Region 3 amounting to roughly Php 47M and Php 27M respectively, were already submitted to the COA middle of this year.  Meanwhile, Php 57M of accounts payables in Region XI lacking in proofs of obligation have also already been properly substantiated.

“I have already directed the regional offices to submit all needed requirements immediately,” added the TESDA head.

With regard to another recent COA memorandum indicating that the agency used the TESDA Development Fund (TDF) to invest in long-term bonds instead of spending it on training programs, Lapeña clarified that this is in line with the TDF’s original purpose of generating income.

“The TDF was established essentially to generate income through safe investments,” Lapeña explained.

Provisions within the TESDA Act of 1994 specify that the TDF is to be managed by TESDA “the income from which shall be utilized exclusively in awarding grants and providing assistance to training institutions, industries, local government units for upgrading their capabilities and to develop and implement training and training-related activities.”

“It is also incorrect to say that TESDA has made no plans as to how income from the TDF will be applied as our TESDA Board has continuously been discussing this as early as 2016,” according to the Secretary.

Board Resolutions 2016-13, 2017-21 and 2018-15 prescribe that the TDF be used: for upgrading of teaching capability (e.g. trainers, curriculum developers, etc.); for enhancing the capability and capacity of TVET institutions in the dual training system and other enterprise-based training modalities; and for TVET researches.

Also, a technical working group was formed last March and is already evaluating project proposals that may be funded by the TDF.

“We would like to assure COA and the public as well that the TDF is intact and has even grown considerably in the last 16 years.  Very soon, we can fully utilize this to reach even more of our kababayan through quality tech-voc training,” added the TESDA chief.

The TDF was established in 2002 with a seed capital of about Php 21M.  According to reports, as of the end of 2018, this has increased by 847% to roughly Php 201M.  Some Php 124.8M is invested in Retail Treasury Bonds and Fixed Treasury Notes, the earliest maturity of which will be in March 2021.  About Php 44.9M in Treasury Bills matured last June.   Thus, the uninvested portion of the TDF is only about Php 31M.

The TDF is on top of TESDA’s regular funds as provided by the General Appropriations Act or GAA.  While the GAA is used by the agency to perform its main functions, funds generated from the TDF are to be used for upgrading and intensifying TESDA’s capability to perform such functions.

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