Institutional Profile
Parameter I
RESOURCE GENERATION STRATEGIES
The Commission on Higher Education (CHED) has encouraged State Universities and Colleges (SUCs) to engage in Income Generating Projects (IGPs) to augment the budget allocation of government for higher education by virtue of Republic Act 8292 or the Higher Modernization Act.
Higher Education Institutions (HEIs), particularly the State Universities and Colleges (SUCs), are committed to foster quality education through its basic functions namely instruction, research, extension, production and internationalization initiatives. Then President Emanuel De Guzman’s Eight-point Agenda helped guide the Polytechnic University of the Philippines (the University/PUP) in accomplishing its mandates and functions including the challenge of engaging in income generating activities. Thus, having been geared towards operational efficiency, each sector in PUP made efficient use of its resources to maximize their available resources for sustainable IGPs.
To source out funds from other reliable sources aside from the subsidy of the government to help realize instructional development, to expand and strengthen research and extension undertakings, and to help compensate employees, PUP used different avenues such as curricular engagement, outreach, and partnership and collaboration.
I.1 RESOURCE GENERATION
Based on the data from the table above, majority of the funds are from local donors and partners. From 2017 to 2021, funding from local donors and partners accounts for 50% to 80% of the total funds generated by OIA and SFAS.
As presented in the table above, funding coming from both international and local partners are increasing year to year from 2017 to 2019. The impact of the Covid-19 crisis resulted to a decrease in the funding support starting 2020 however, the funds were still able to augment to the needed funding requirement of the University.
I.2 THE INCOME GENERATING PROJECTS
The University has committed to venture into IGPs as an immediate response to the call of the government to devise and implement resource generation activities that will augment the University’s resources. The enactment of Republic Act 8292, otherwise known as the Higher Education Modernization Act of 1997, specifically provides that:
“State Universities and Colleges (SUCs) are encouraged to enter into joint ventures with business and industry for the profitable development and management of the economic assets of the college or institution, the proceeds from which to be used for the development and strengthening of the college and university, and to privatize, where most advantageous to the institution, management and non-academic services such as health, food, building or grounds or property maintenance and similar such other objectives.”
SUCS need to strengthen their fiscal capability by entering into income generating projects to enhance limited resources as a consequence of the government budgetary cuts for public education. The increase in income generation is expected to offset the yearly decrease in budget for Maintenance and Other Operating Expenses (MOOE) and Capital Outlays (CO).
In 1999, the Office of the Vice President for Finance was created as one of the approved Revised Organizational Structure of the university in consonance with RA 8292 that empowers SUCs in the Philippines to engage in corporate activities in order to generate revenues. The operations of the Finance Division was further expanded by the creation of the Business Operations Division (now known as Income Generation Office). (This is adopted from Area 1 - Parameter D.1)
In order to support and improve the University’s function of providing quality education/service to its students/stakeholders, PUP through its income generating projects aims for the optimal use of its resources such as idle lands, existing facilities and other equipment.
PUP has mandated to support its IGPs through the following (Section 44 of the University Code):
The University aims to centralize all its income generating efforts through the Resource Generation Office (RGO). The RGO, however, is only tasked to manage, monitor, and supervise the operation of the income generating projects of the University. RGO works as the marketing arm of the university. Its primary task is to look for possible projects that has financial benefits to the university. The additional income generated thru RGO will augment priority programs and projects approved by the Board of Regents (BOR).
The following are the implementing guidelines on the IGPs of the University:
I.2.1 List of Income Generating Projects
The funds from income generating projects are the direct result of partnerships, collaboration and outreach, and curricular engagement entered into by the offices from the different sectors mandated to initiate and organize income generating activities for and in behalf of the University.
Some of the Income Generating Projects are from Resource Generation Office (RGO) and Special Programs and Projects Office (SPPO):
I.2.2 Funding from Other Sources
The university has various ways of outsourcing funds. Some of these are described below:
These priorities are either published by the concerned agency or organization and accessed through their websites or from calls for proposals announced in writing or through individual contacts between faculty and their counterparts from other universities, research centers and the agencies/organizations concerned. From these faculty develops proposals individually or jointly and passes these on to the agencies/organizations. Each faculty member is encouraged to look for funding opportunities. In addition, university administrators also establish linkages and partnership, and they constitute teams who will develop proposals for funding.
For proposals to get funded, groups of are tasked to develop proposals. These are then subjected to rigorous internal evaluation before transmission to donor agencies/organizations. Their competence in their fields of discipline is a must so that their track record becomes a good selling point for funders to trust their money with them.
The university encourages faculty to forge close collaboration between faculty and their counterparts from other universities and research centers here and abroad. In many cases, foreign partners have access to funds that they can bring to the university under joint programs.
PUP is an active partner in various local and international networks. These networks normally have members who also are from the funding agencies themselves or members who have existing strong linkages with funders.
Through participation in these for a PUP establish linkages with funders. The university has a policy of encouraging its faculty to go and participate in these for a with full or counterpart funding to make sure that the university is represented and gets updated on the state of the art in the field or industry.
Many visiting faculty and professors bring in resources to the university.
The university has an aggressive policy of bringing in decision makers from various agencies, departments, organizations so that they can see what the university is doing, what more does it need and what can they do to help. These are done during special occasions such as university founding anniversaries, research and scientific conferences hosted by the university, project meetings, project launchings and end-of-project evaluations.
The university maintains a stringent policy for complying with donor standards in financial reporting to donors. Each faculty using funds from external partners is required to comply with procurement policies by the government and the donor agency, observe accounting a auditing rules of government and donor agency including the use of reportorial templates prescribed by partners.
Partnerships/collaborations between the university and its partners may be formalized using various types of agreements such as Memorandum of Understanding (MOU), Memorandum of Agreement (MOA), Letter of Agreement (LOA) Consultancy Contract, Financial Agreement, or other formats provided they are not in contravention of Philippine laws and suited to the donors’ preferences. The contracts and agreements can also be forged between the university and the donor or the university-organized foundation and the donor. The foundation provides some flexibility for some donors who have particular interest in simpler terms of reference, faster financial transaction processes and modified rates of remuneration and other costs.
I.2.3 Linkages with Government and Non-Government Agencies
The table shows that from 2017 to 2020, most of the funds are being subsidized by non-government agencies. There are also subsidies from the different government entities like the DOST and CHED.
Based on the information provided above, majority of the funding requirements are being provided by the different government agencies to augment the needs of the University to support its institutional development plans.
I.3 THE BUDGET PROCESS
The University’s budgetary process is centralized under the Budget Services Office (BSO), and undergoes three (3) major processes, namely: Budget Preparation, Budget Allocation and Budget Utilization. The budget is sourced from the General Fund or the General Appropriations Act (GAA) and the Special Trust Fund (STF) or the institution’s income/ savings.
I.3.1 Budget Preparation
For reiteration, following the issuance of the Budget Call, the Office of the Vice President for Finance, thru the Budget Services Office (BSO), prepares and issues schedule for Budget Forum within the first quarter of the year and issues a Memorandum to all Sectors of the university who are directly involved in the preparation of the budget. Representatives from all sectors are required to attend the forum. Representatives of each office/college/department/branch prepare and submit detailed budget proposals (PPMP, market surveys, etc.) to the assigned Focal Persons within the prescribed period. The involvement of the offices with IGPS in the budgetary process is the provision of budget proposal/estimate. At present, the budget of the IGPs is based on the actual collections for the period.
The funds from IGP form part of the STF. The budget process is discussed in Parameter G Section 3.1.3 (Management and Financial Control).
I.3.2 Budget Allocation
The General Appropriations Act (GAA) is the legislative authorization that contains the new appropriations in terms of specific amounts for salaries, wages and other personnel benefits; maintenance and other operating expenses; and capital outlays authorized to be spent for the implementation of various programs/projects and activities of all departments, bureaus and offices of the government for a given year. While the income of the institution is placed under the Special Trust Fund (STF).
The budget of the university is allocated to General Management and Supervision, Support to Operations, Higher Education Program, Advanced Education Program, Research Program, Extension Program and is not determined by its distribution per college/ branch/ office. These Program/Activities/Projects (PAPs) are part of the GAA. All allocations which may be insufficient to cover the expenses of the university will be sourced from the STF. (This is adopted from Area 1 - Parameter G.3.2)
I.3.3 Budget Management
The University, through the OVPF, maintains 4 (four) funds from various sources, namely: General Fund (Fund 101), Special Trust Fund (Fund 164), Regular Trust Fund (Fund 184), and Revolving Fund (Fund 163). They are described below, to wit:
Regular Fund (Fund 101) is the appropriation incorporated in the Annual General Appropriations Act (GAA). Consistent with the approved budget program, the BSO records the appropriations in the Registries by expense classification. Recording is done for every transaction to prevent incurrence of obligations in excess of allotment. The report of the balance of the General Fund must be available anytime, especially every month end to be used for decision making of the Management.
Special Trust Fund (Fund 164) represents the income of the University derived from collection of tuition & miscellaneous fees, business concessions, professional development training and special projects. Both Obligations and Disbursements are encoded through the database created by the Budget Services Office. A monthly reconciliation between the BSO and Accounting Department to update and monitor the changes on the obligations and disbursements. The BSO submits to the Office of the Vice President for Finance the Statement of Allotments, Obligations and Balances (SAOB) monthly.
The Regular Trust Fund (Fund 184) are collections from non-income sources authorized by law for specific purposes such as research grants from private and government grantors and other payables. The Accounting Department maintains Subsidiary Ledgers for every source of funds collected thru Fund 184. A Fund Status Report can be generated every time the balance of a certain fund is needed.
The Revolving Fund (Fund 163) are resources derived from business type activities such as income from Canteen Services and Dormitory/Hostel. These funds are self-liquidating and monitored by the Accounting Department and reported periodically to the top management. (This is adopted from Area 1 - Parameter D.2)
I.3.4 Budget Control
Please refer to Institutional Portfolio Area 1 – Parameter D (Governance – Accountability) and Institutional Portfolio Area 1 – Parameter G (Management and Financial Control).
I.3.5 Participants in the Budget Process
Please refer to Institutional Portfolio Area 1 – Parameter D (Governance – Accountability) and Institutional Portfolio Area 1 – Parameter G (Management and Financial Control).
I.4 MONITORING AND EVALUATING IGP
With its continuous effort to improve/maximize income generating projects/activities, the University has issued guidelines though the issuance of Memorandum Order 8-2018. PUP aims to centralize all its income generating efforts through the Resource Generation Office (RGO). The RGO, however, is only tasked to manage, monitor, and supervise the operation of the income generating projects of the University. Based on the memorandum, all proposals/offers have to go through rigorous evaluation by an independent committee established particularly for this purpose.
Duties and Responsibilities of IGD Committee
Review and evaluate the feasibility of the new IGP proposal;
Review and evaluate the required documents as to their compliance with existing government and/or University rules and regulations, including the quotations/proposals submitted by prospective service providers;
Issue resolution as regards to the approval of the EXECOM;
Facilitate the conduct of ocular inspection of office/warehouse/establishment of the selected service provider to verify and ascertain the existence of its office, equipment and manpower capability;
Propose changes/amendments to previously approved but not yet implemented IGP proposal;
Recommend to EXECOM the blacklisting of and/or any legal action taken against a delinquent service provider; and
Such other function as may be assigned by the President.
Evaluation Procedures
For IGPs initiated by Private Entities
Proponent/s of an IGP shall submit a letter of intent/proposal addressed to the IGP Evaluation Committee thru the RGO Director for initial evaluation and endorsement. PUP stakeholders including those in branches and satellite campuses and/or private entities may submit an IGP proposal for screening and evaluation.
The RGO Director shall forward the IGP proposal including pertinent documents and attachments such as market survey and study, rates, measurements and other technical specifications, estimated income and others for deliberation, review and evaluation of the Committee.
The Committee shall prepare Resolution for each IGP and shall endorse the same for consideration and approval of the EXECOM.
For IGP projects that are within the delegated authority of the President, upon approval by the EXECOM and receipt of EXECOM resolution, the RGO shall immediately facilitate the implementation of the project.
For IGP projects that require prior Board approval, upon approval by the EXECOM and receipt of EXECOM resolution, the RGO shall complete all the staff work for inclusion in the Board of Regents-Finance Committee agenda and eventually to the Board of Regents for their consideration and approval.
Upon approval by the BOR, the RGO shall immediately facilitate the implementation of the Board-approved IGP.
For PUP- initiated IGPs
Notice of invitation to service providers shall be posted in the PUP Website and in conspicuous areas within the University.
The notice of invitation shall include complete technical specifications of goods or services needed by the University, the terms of reference, timeline and deadline for quotation submission.
Upon posting of the notice of invitation, prospective service providers shall be given 30 calendar days to submit their quotations/proposals and other necessary documents.
All quotations and documentary requirements must be submitted to the RGO.
The RGO shall evaluate the completeness of the documents submitted. The documents required by RGO must provide pertinent information relative to the qualification of the service provider which may include but not limited to the following:
a. letter of intent
b. DTI or SEC registration
c. BIR/tax certificate
d. business permit
e. business profile, including list of on-going or completed projects and location map of business establishment
f. sanitary permit
g. barangay clearance; and
h. other documents that may be required by PUP
Prospective service provider’s quotation/proposal must be submitted separately and placed in a sealed envelope. Only the envelope containing the documents mentioned in the preceding section shall be opened by RGO for evaluation.
Sealed proposals shall be turned over by the RGO to the IGP Evaluation Committee and shall only be opened on the meeting set for the purpose.
Upon determination of qualified prospective service provider/s, the RGO as the Committee’s Secretariat, shall facilitate the convening of the IGP Evaluation Committee to evaluate the quotations/proposals and select the service provider.
The selection of the official service provider shall be based on:
a. the merit of quotation/proposal (that which shall be most beneficial to PUP in terms of income generation);
b. service provider’s capacity to deliver the goods and services based on the technical specifications, terms of reference and other requirements stipulated in the notice of invitation;
c. service provider’s compliance with documentary requirements and existing government and University policies, rules and regulations;
d. service provider’s record and performance based on previously contracted work or project with the University or other similar institution; and
e. findings/recommendation of the ocular inspection team.
Service providers which are previously banned or blacklisted by the University, or those with pending or involved in criminal/civil cases, are automatically disqualified. Proposals submitted by these entities shall not be entertained.
An ocular inspection of the business establishment of the service provider selected by the IGP Evaluation Committee shall be undertaken by the staff of the RGO and IAO to ascertain and verify the existence, legitimacy and capability of the business to supply/deliver the goods/services needed by the University.
The IGP Evaluation Committee shall issue a resolution endorsing to the EXECOM its selection of the service provider. If the EXECOM concurs with the decision/resolution of the IGP Evaluation Committee, the former shall issue a resolution signifying approval of the selected service provider and endorsement of the project.
If the service provider selected by the IGP Evaluation Committee failed the ocular inspection, or if it voluntarily withdrew from the selection process (manifested thru a written communication), the service provider with the second best offer/quotation shall be considered and endorsed as the service provider. The IGP Evaluation Committee shall issue a resolution and shall inform the EXECOM of the same.
For IGP projects that are within the delegated authority of the President, upon approval by the EXECOM and receipt of EXECOM resolution, the RGO shall immediately facilitate the implementation of the project.
For IGP projects that require prior Board approval, upon approval by the EXECOM and receipt of EXECOM resolution, the RGO shall complete all the staff work for inclusion in the Board of Regents-Finance Committee agenda and eventually to the Board of Regents for their consideration and approval. Upon approval by the BOR, the RGO shall immediately facilitate the implementation of the Board-approved IGP.
The Memorandum of Agreement/Contract shall be submitted to the Office of the University Legal Counsel for review and endorsement to the President.
Upon signing of the MOA, the service provider shall be required to post a performance bond (cash bond) equivalent to 10% percent of the estimated income share of the University from the project. The said amount which shall be remitted to the Fund Management Office is refundable subject to the provisions of the MOA.
The RGO shall notify through electronic and registered mail all qualified service providers of the result of the evaluation and selection of the Committee.
For existing IGPs
For IGPs that have already been pursued by the University in the past years (such as the college, SHS and PE uniforms, graduation photo and toga rental services, and the like) the RGO shall issue invitation to prospective providers of goods and services at least 45 days before the expiration of the existing MOA.
The notice of invitation shall include the terms of reference and complete technical specifications of goods or services, the timeline and deadline for quotation submission.
Upon posting of the notice of invitation, prospective service provider/s shall be given 15 calendar days to submit quotations/proposals and the required documents.
The above rules pertaining to PUP-initiated IGPs shall be applicable.
I.4.1 Monitoring
This is done through submission of status of implementation as per contract/memorandum of agreement to Sector Head, monitoring of collection from service providers, and issuance of statement of account by Accounting Department to service provider:
Submission of monthly financial reports to Internal Audit Service Office for review before submission to Commission on Audit (COA).
Preparation of letter addressed to the project managers for deficiencies noted in the reports.
I.4.2 Evaluation
An annual evaluation of the IGPs is conducted to evaluate the operations of the projects in terms of efficiency and effectiveness. This is done to come up with the overall assessment on how to improve its effectiveness, and set standard policies/procedures as well as its impact/benefits to the stakeholders per office/per sector.
I.5 MAJOR IMPLEMENTED PROJECTS
I.6 DISTINCT PREVAILING BEST PRACTICES
The PUP Income Generation Project Evaluation Committee (Regular conduct of University Finance Committee (FinCom) meeting for the discussion and initial evaluation of proposals, projects, and other financial matters prior to its endorsement to the ExeCom and BOR-Finance Committee. This practice has navigated a pathway toward ensuring financial accountability and transparency through discussion and dialogue from the PUP administrators/experts. The committee is composed of the Sector Heads, Budget Director, Accountant, Legal Officer, HRMD Director and Procurement Director. Its composition helps fast transactions of the requests facilitated.
The University conducts a regular coordination meeting with partners to discuss the status of billing and collections, reiterate the processes, and issues and concerns. This results to improved collection and processes, and resolves issues and concerns.
The PUP Income Generation Project Evaluation Committee (IGPEC) oversees the soundness and viability of all of the university's solely business-related initiatives. Its major goals are to assist the University increase the financial capacity and evaluate new sources of income. Additionally, it forges and creates connections with public and private institutions to improve the university's many commercial ventures. The IGPEC continues to implement the stringent criteria of evaluating and endorsing notable IGPs. It aims to identify, track, retain, and reward the strongest service providers for the various IGPs in the University. All IGP proposals that have undergone review and evaluation by the Committee shall be endorsed to the PUP Finance Committee for review and endorsement to PUP Executive Committee (EXECOM).