by

Dr. Fay Lea Patria M. LaurayaDr. Helen M. LlenaresasProf. Flor R. A. Jenkin

Home to some 86 M Filipinos

86 M Filipinos

23.4 M (28%) youth population 2.4M (10%) enrolled in Higher Education

There are 1,723 HEIs (2007 count) in the country

196 (11.38%) government

funded

1,527 (88.62%)

privately run

9 in 10 Filipinos still prefer government-run HEIs 1 in 3 college students attends government funded HEI

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

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

These are the challenges to Bicol University (BU) and all other HEIs in the region.

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.

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.

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.

Descriptive case research with factual

information drawn from internal documents –

i.e. policies and guidelines and

procedures contained in administrative

orders.

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

Operating Expenditure 2008 2007 2006 2005 2004

A. ProgramsGeneral Administration and Support/Support to Operations/Operations1. Personal Services (PS) Php 255,002 Php 253,987 Php 239,922 Php 242,110 Php 242,110

-49.91% -53.08% -84.96% -92.71% -86.31%43,944 39,072 39,072 35,816 38,394-9.34% -8.87% -13.84% -13.72% -13.69%3.012 158.012 0.4 0.486 --

-0.06% -35.89% -0.01% -0.02% B. ProjectsLocally –funded Project(s)1. Financial Assistance to BU Gubat 18 9.5 3 3 --

-3.83% -2.16% -1.06% -1.01%(MOOE: 15M)

CO: 3M)

2. Infrastructure 164.6 -35%3. Scholarship Program for MOOE: 6 M Tertiary Education -0.03%

T O T A L Php 490,558 Php 460,571 Php 282,394 Php 281,412 Php 280,504

US $ 9,811 US $ 9,211 US $ 5,648 US $ 5,628 US $ 5,610

2. Maintenance and Other OperatingExpenses (MOOE)3. Capital Outlays (CO)

-- -- -- --

-- -- -- --

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.

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 MMOOE Augmentation 382.1 MCapital Outlay 429.8 MSupport to University Operations 47.8 MInvestment Portfolio 28.7 M

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.

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.

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

Excellence in Instruction, Research, Extension through Productive Scholarship

Institutional and Program Excellence

Instructional Facilities and Manpower Resource Development

Resource Generation for Fiscal Autonomy

Increased University Income

Facilities RentalService ContractingAgricultural and Fishery ProductionLease of LandDevelopment and Sale of Instructional MaterialsTraining, Seminars and Review CentersFood ServiceSale of Waste Materials and Disposable Property

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.

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

POLICY DIRECTIONS ACTION(s) TAKEN RESULT(s)/OUTPUT(s)Articulation of productive scholarship principle such that Annual presentation and review of each college's/unit's Work All income generating projects (IGPs) are aligned with investment in instructional facilities and manpower resource and Financial Plan. approved policies.development is indirectly an investment in resources that canbe harnessed for income generating activites/projects of theuniversity.Income generating projects shall fall into eight (8) categories: Guidelines for fees collected by the University/Colleges/Units Standaradization of collection of fees for all the 8 IGP categories.a) Facilities rental are firmly established and reviewed periodically.b) Service contracting Income derived from these projects from 2004 to 2008 have c) Agricultural and fishery production Each project has its own account code at the accounting office.shown a steady rise.d) Lease of Lande) Development and sale of instructional materials Except for agriculture and fishery production that suffered f) Trainings, seminar, short-term course and review centers losses due to Typhoons Milenyo and Reming, all of these IGPg) Sale of waste materials and disposable property; and projects showed a steady increase in production income.h) Food service

The sale of the faculty's research and training capabilities hasshown/demonstrated the highest earning potential.

Four (4) seminars/trainings per quarter (24 per year) on ave.which are mainly regional in coverage, are conducted by theuniversity based on the faculty's core competencies.

Seed capitalization may be provided from regular MOOE, Entrepreneurial culture is encouraged through making avail- Acceptance by the academic community of the concept ofuniversity income or through other financial arrangements able support mechanism as provision of seed capitalization privatization as more and more personnel engaged in entre-such as joint venture and build-operate and transfer (BOT) taken from Fund 101, Fund 164 and possible grants and preneurial ventures.subject to project feasibility studies and appropriate gov'nt. donations.rules and regulations.Income generating activities shall preferably college/unit/ IGPs are included in the College's/Units Development Plans Every college conducts IGP projects/activities.department-based for purposed for monitoring and control. and the Deans/Unit Heads assume direct responsibility for the

over-all supervision and administration of all project compo- Timely submission of reports.nents under their domains to achieve established targetswith optimum efficiency. Cost minimization (efficiency) and outputs produced in quantities

and qualities according to the underlying goals (effectiveness).Monitoring, Evaluation and Control System is in place toensure that the investment in the IGP is spent in the right way.

POLICY DIRECTIONS ACTION(s) TAKEN RESULT(s)/OUTPUT(s)All income derived by the colleges and units through their Implementation of approved IGP programs/projects. Income derived from IGP initiatives of colleges/units are dis-productive scholarship endeavors shall accrue to the res- bursed following approved work and financial plan.pective college/unit except for a 5% share to the generalmanagement (GASS).Personnel benefits and maintenance of instructional facilities Profit sharing and incentive scheme is well defined and More and more faculty members are encouraged to participateshall be given top priority in the utilization of income from implemented. in IGP projects/activities.production activities.

One of the Personnel benefits established, partly financed by income from operation is the Bicol University Provident Fund(BOR Res. No. 079 s. 2005) that serves as a savings and loancredit facility catering to the needs of the BU offiicials and employees.

Non-teacing personnel shall be empowered through greater Proposal and implementation of IGP projects by non-teaching Non-teacing personnel themselves undertake IGP projects.participation and involvement in institutionalizing procedures personnel in line with their expertise.to facilitate income generation and fund management.For the long term, each college/unit shall formulate a strategic Included in each college/unit's plan. Strategic plans for income generation formulated for each plan for income generation based on current realities and college/unit.internal and external opportunities.For the short term, immediate investments should be made in A personnel has been assigned to take charge of this Eight lots, covering 422,247 sq.m. are now awaiting the property boundary, titling and fencing. concern. issuance of special patents.

Fencing of BUCAF property.Standard guidelines and procedures for management and Financial Management of the IGPs are guided by the follo- An Operating Manual for Income Generating Project (2005)operation of income generating program and projects shall be wing legal bases: is in place.set in place to include a systematic financial control mechanismNBC 331 (1980): For Agcirultural Operations (Fund 161)and a rational as well as equitable incentive scheme to moti- NBC 331A (1982): For Manufacturing Operations (Fund 162)vate personnel to participate in income generating activities. COA Circular 84-239: Accounting for Agricultural Product

DBM Circular 92-8 (1992): For Operation of AuxiliaryService (Fund 163)RA 8292 (1997): Modernization of Higher Education

An aggressive promotion and marketing mechanism shall be The Manual of Operation provides that the Project Manager Promotion and marketing mechanism set in place for every established to increase the viability of Bicol University (PM of each IGP) shall determine the type of promotional project funded and is embedded in the Feasibility Study.products and services. strategy appropriate for the product/undertaking and incor-

porate such in the proposed business plan including the costrequirement.

Income Source CA 2006 CA 2007 CA 2008

Php 294,393,000 468,569,000 666,523,000

(72.95%) (81.53%) (84.49%)

109,148,000 106,165,000 122,315,000

(27.05%) (18.47%) (15.51%)

Total Php 403,541,000 Php 574,734,000 788,835,000*Presented to and approved by the Board of Regents

Fund 101 (GAA Funds)

Fund 164 (Income)

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:Set A. IGP by Administration (capitalization coming from University or College)

Particulars Percentage

University Share 30

College Share 15

Capital Build Up 15

Project Manager 25

Laborer 5

Administrative Group 10

Total 100

Set B. IGP Funded by Personnel-Student Partnership

Particulars PercentageUniversity Share 10

College Share 20

Personnel and Student 70

Total 100

The maximum incentive for personnel directly and indirectly involved in production and business affairs shall be as follows:

Maximum Amount((PhP)/Year

Top and Middle Management 36,000.00

College Production and Business AffairsCoordinator

36,000.00

Project Manager 36,000.00

University & College Council Members 7,200.00

Laborer 12,000.00

Position

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.

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.

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.

Programs and Target Total Percent Actual InvestmentActivities (over 10 yrs (over 5 yrs Accomp.

period) period) 2004 2005 2006 2007 2008 (partial)

Staff and Students Welfare 66.9 114,327,536 170.89% 10,588,706 15,614,330 15,859,900 30,156,500 42,108,100

MOOE Augmentation 382.1 84,120,211 22.01% 6,143,509 10,780,900 13,782,100 24,868,802 28,544,900

Capital Outlay 429.8 254,269,948 59.16% 44,053,820 50,085,800 74,633,430 42,464,898 43,032,000

Support to University Operations 47.8 19,274,080 40.32% 641,080 1,500,000 3,278,000 5,225,000 8,630,000

Investment Portfolio 28.7 8,845,000 30.82% 300,000 500,000 1,595,000 3,450,000 3,000,000

Total 955.3 480,836,775 50.33 61,727,115 78,481,030 109,148,430 106,165,200 125,315,000

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

Category 2004 2005 2006 2007 2008 Total %

Tuition & Other School Fees 53,585,070.56 74,964,787.08 84,921,188.72 102,414,931.63 109,090,000.00 424,975,977.99 65.38

Invest., Busi. & Prod'n Income 9,335,206.82 7,217,898.54 7,323,809.39 9,940,524.08 13,225,000.00 47,042,438.83 7.24

Fiduciary 30,325,160.40 31,299,852.87 34,407,839.62 38,885,995.88 43,077,645.00 177,996,493.77 27.38

Total 93,245,437.78 113,482,538.49 126,652,837.73 151,241,451.59 165,392,645.00 650,014,910.59 100.00

Tuition Fees & Other School Fees

0.00

20,000,000.00

40,000,000.00

60,000,000.00

80,000,000.00

100,000,000.00

120,000,000.00

2004 2005 2006 2007 2008 (est.)

Tuition Fees & Other School Fees

Investment, Business & Production Income

0.00

2,000,000.00

4,000,000.00

6,000,000.00

8,000,000.00

10,000,000.00

12,000,000.00

14,000,000.00

2004 2005 2006 2007 2008 (est.)

Investment, Busi. & Prod'n Income

Fiduciary

0.005,000,000.00

10,000,000.0015,000,000.0020,000,000.0025,000,000.0030,000,000.0035,000,000.0040,000,000.0045,000,000.0050,000,000.00

2004 2005 2006 2007 2008 (est.)

Fiduciary

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.

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.

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.

LOGICAL FRAMEWORK (Bicol University)

Societal Goal

Sectoral Goals

OrganizationalOutcomes

Major FinalOutputs (MFOs)

Programs/Activities/Projects

Human Development Towards Poverty Reduction and Sustainable Development

Globally Competitive Public Higher Education

Graduates

New Knowledge and Technologies Generated

and Disseminated

Welfare of Local Community Improved

Advanced and Higher Education Services

Research Services

Extension Services

Enhanced Knowledge and Skills, Attitudes and Values of Filipinos to Lead Productive Lives

InstructionAdvanced Education Services 7 Doctoral Programs 21 Master's Program 18 Diploma Programs (leading to Master's)Post-Baccalaureate Programs 2 Certificate ProgramsBaccalaureate Programs 45 Degree ProgramsAlternative Learning Systems Distant Education ETEEAPSpecial Programs RSTC Language Center Sentro ng Wika ICT PRogram Women Studies & Advocacy CenterQuality Assurance Services Accreditation Program Admissions/Testing Center Personnel Development Center Merit & Promotion Program (incl. PRAISE Prog) Center of Excellence (COE)Auxiliary & Student Services Library System Medical & Dental Services Student Services & Development Scholarship Placement Student Assistantship Educational Loan Program Guidance and Counseling Student Discipline Student Leadership Programs Student Publications

ResearchResearch & Development Program Areas Poverty reduction and food security Enhancing the competitiveness of business and industry Environment & natural resources management Climate change adaptation Gender and Development Improving Basic Social Services Delivery Policy Studies

ExtensionA Wholistic Extension Services Program

Production Action-cum-research Information packaging and dissemination Training Specialist Support Services

Promotion Action-cum-research Information packaging and dissemination Training Specialist Support Services

Marketing Action-cum-research Information packaging and dissemination Training Specialist Support Services

Consumer Education Action-cum-research Information packaging and dissemination Training Specialist Support Services