Funding & Self-Sustainability Towards Efficient

1. Funding & Self-Sustainability Towards Efficient & Effective State University Autonomy: The Case of Bicol University by Dr. Fay Lea Patria M. LaurayaDr. Helen M. LlenaresasProf. Flor R. A. Jenkin

2. The Philippines  Home to some 86 M Filipinos

3. The Philippines  There are 1,723 HEIs (2007 count) in the country 9 in 10 Filipinos still prefer government-run HEIs 1 in 3 college students attends government funded HEI

4. Bicol Region the poorest region in Luzon and the 4th poorest in the country, next to Region 9, ARMM & CARAGA population grows by 1.92%, higher than the national average of 1.68%, with an average household size of 5.4 higher than the national average of 5.0  Almost half of the Bicolanos (48.5%) in 2003, live below the poverty threshold it is in the typhoon belt with about 20 typhoons visiting the region in a year on average, aggravating its poverty situation

5. These are the challenges to Bicol University (BU) and all other HEIs in the region. low quality of basic education;  youth’s inability to pursue higher education beyond secondary level; low levels of skills acquired in tertiary education; inadequate employment opportunities; mismatch between the skills acquired by the labor force and the skills required by the labor market; and  low productivity

6. Bicol University, along with the rest of the SUCs are mandated to address the societal goal of “human development towards poverty reduction and sustainable development.” They share the common goal of “enhanced knowledge and skills, attitudes and values of Filipinos to lead productive lives,” by producing globally competitive graduates, generating and disseminating new knowledge and technologies, and improving the welfare of local community through its three-fold function of instruction, research and extension services.

7. SUCs are encouraged to undertake reasonable cost recovery measures for goods and services delivered…to assist in the revenue enhancement effort of the government and encouraged better service delivery. SUCs leadership is called upon not only to exercise internal efficiency but to generate resources; to be more creative in resource generation and management though adoption of value adding activities.

8. The paper has the twin-purpose of: Showcasing the practices of Bicol University with respect to funds generation towards self- sustainability guided by the framework for financial resource generation contained in the BOR-approved COMDEV Plan: 2003-2013; and Illustrating the mainstreaming of production into the core competencies of the teaching and non-teaching personnel as they carry out their instruction, research and extension functions.

9. Methodology Descriptive case research with factual information drawn from internal documents – i.e. policies and guidelines and procedures contained in administrative orders.

10. Data and Discussion Government Funds for BU: CA 2004-2008 by type of Operating Expenditure (in Million Pesos) as reflected in GAA

11. The BU Comprehensive Development Plan: 2003-2013 Approved by the BOR in September, 2003 for implementation effective January 2004. Provides a 10-year framework for all development activities in the areas of academic programs, the organizational structure, human resource, physical resource development and financial component including resource generation or production function. Academic program component defined the development directions of BU’s curricular programs to be more relevant and responsive to regional, national and global development needs along its mandated functions: instruction, research and extension.  Production mandate of BU is undertaken to improve the University’s financial capacity through productive endeavors along its mandated functions.

12. Cont... Integrated within instruction, the research and extension agenda of BU address the worsening problems of poverty in Bicol focusing on its root causes and effects.  Financial component of the plan relies on an innovative resource- generating and fund-sourcing program. Internally generated funds or university revenues are intended primarily to finance the BU Development Investment Program. These revenues include (a) income from tuition and other school fees, (b) income from fiduciary fees, and (c ) other incomes.  As projected, the University would be able to generate a progressively increasing aggregate income annually, targeted at Php 955 M over the 10-year period programmed to finance the various activities and projects of the university including: Staff and Students Welfare Php 66.9 M MOOE Augmentation 382.1 M Capital Outlay 429.8 M Support to University Operations 47.8 M Investment Portfolio 28.7 M

13. Cont...  External sources of funding outside the regular national subsidy are strongly pursued to fund priority programs such as staff and student development, modernization of physical facilities including providing interconnectivity, among others.  Collaborative undertakings in research and extension are explored through strong linkages with research and development agencies as well as foreign funding donors.  Production activities are undertaken not only on the basis of financial return but as income generating projects anchored on departmental expertise, resources and the University’s academic thrusts.

14. Figure 1. Framework for Bicol University’s Financial Resource Generation

15. Fiscal Policy Statements A. Income Generation All income accruing to the University that includes collections from student tuition and other fees, net proceeds of entrepreneurial ventures, grants and aids, as well as miscellaneous income shall be managed by the University General Administration under a “One-Fund Concept.” Rates for tuition and other fees, and other services charged by the University to its client shall be subjected to regular/periodic review that shall seek to rationalize the rates vis-à-vis the economic conditions obtaining in the country in general, and the region in particular. New rates shall only apply to incoming freshmen. Fund sourcing shall be vigorously pursued tapping the BU alumni, the legislative branch of government for outright donations for infrastructure facilities modernization and development. Other donor agencies/organizations and individuals shall also be invited to donate funds for scholarship, research and development funds.

16. Fiscal Policy Statements B. Income Allocation Internally generated funds shall be prioritized according to approved Work and Financial Plans consistent with the development direction of the University per approved Development Plans. Fiduciary funds and outsourced funds shall be strictly utilized for their intended purposed. Any realignment shall have the imprimatur of the donor and of the University Governing Board. Allocation from internally generated funds shall cover the following areas of concern: Faculty and staff development through scholarship and training Research-development and extension Information and communication technology modernization including administrative efficiency Faculty and staff welfare benefits Library and instructional facilities modernization

17. Policy Directions

18. Policy Directions

19. Bicol University Income

20. BU's Operating Manual for IGPs: All projects under the University Production and Business Affairs (UPBA) shall be included in this incentive scheme, except income from lease and rentals. Incentives shall be given if the program or project obtains an ROI of 10% or better at the end of a calendar year. The overall net profit of each production and business project shall be allocated as follows:

21. BU's Operating Manual for IGPs:...cont...

22. BU's Operating Manual for IGPs:...cont... Set C. The distribution of net income from IGP by Contact Management Agreement and IGP by Joint Venture shall follow those defined or stipulated in the Memorandum of Agreement signed by the University President with authority from the Board of Regents. The maximum incentive for personnel directly and indirectly involved in production and business affairs shall be as follows: Incentive for the members of the support staff and other office personnel directly and indirectly involved in servicing the University Production and Business Affairs shall be determined by the UPBAC and approved by the President. Its funding shall come from the 10% Net Income for Administrative Group.

23. Year-End Bonus, Cash Gift & other Forms of Performance Rewards Year-end bonus and cash gift shall be given to all qualified IGP personnel, subject to availability of funds. This benefit shall be intended for project laborers, casuals, data encoder, clerk, messenger, SGs, utility workers, illustrators, etc. The profit sharing and incentives scheme defined in this manual may be revised anytime when deemed necessary, subject to approval of the President upon the recommendation of UPBAC. Other rewards may be given subject to the provisions of the BU- PRAISE. Project Managers shall undertake filed visits to SUCs and private companies to obtain new techniques, expenses may be charged against the program funds subject to fund availability.

24. BU’s target & investment in various activities and projects: Target vs Actual (in million pesos)

25. Sources of University's Income

26. Conclusion Generating additional resources is a big challenge to any university president. All SUCs operate on a combination of government and self-generated funds. As government funds allocation diminish, the need for raising revenues from both external and internal sources at the initiative of the SUC management becomes all the more pressing. The need to generate more resources is greater among big SUCs like Bicol University with more than 17 thousand students and more than a thousand personnel. BU has to harness and derive income from all its resources to supplement government subsidy to fund its major thrusts and directions. The first half of the COMDEV Plan implementation of its production policy directions (2004-2008) has seen a substantial headway toward the achievement of its set targets. But more needs to be done.

27. Recommendation Maximize the use of BU’s 829 hectares of agricultural lands and derive income from agri-tech business projects. The uplands and hilly lands could well be used as demonstration farms. Alternative productivity arrangements may be offered to the informal settlers occupying portions of BU’s land resources. Provide special incentives to stimulate patentable innovation. Forge research and development (R & D) collaboration with all the SUCs in the Region especially in projects that address food security and climate change adaptation, recognizing that each SUC has strength in areas the others may need. Monitor & regulate personnel’s IGP engagement so as not to jeopardize their regular functions. HEIs growing reliance on entrepreneuralism, if not properly regulated can compromise quality, if personnel in their entrepreneurial engagement, are sidetracked from their academic tasks. Safeguard the institutional autonomy of the university by becoming selective in the grants/gifts it accepts.

28. Recommendation....cont... Intensify local government units (LGUS) - academe partnership in addressing the educational needs of the students, particularly the poor but academically deserving students. Consistent with the Department of Budget and Management’s directive, Bicol University should undertake reasonable cost recovery measures for the educational services and other related services it delivers to the public and other agencies to assist in the revenue enhancement effort of the government. Introduce all BU personnel to its institutional model of organizational performance indicator framework (OPIF) which illustrates the mainstreaming of generation and use of income the trilogy of university function of instruction, research and extension.

30. Thank You!