PASIG CITY, June 29, 2018 – The Department of Education (DepEd) affirms that it has made significant strides in addressing its fiscal challenges, and is finally on its way to closing the gap of underspending within the agency.

From 88% obligation rate in 2015, DepEd has increased its budget utilization to 90% in 2016, and finally, to 97% in 2017. This improved performance is brought about by program and financial management, procurement process reforms, and strategic interventions, among others.

From 10% underutilization in 2016, the figure has dropped remarkably to only 3% underutilization for 2017 primarily based on the Registries of Allotment and Obligations (RAO) for the said year. The 3% that remained unutilized translates to P15,734,573,153 which represents unobligated allotments that will revert to the general fund.

Significant improvements

A three-year comparison of DepEd’s budget utilization shows a massive decline in underspending—from 12% in 2015, to 10% in 2016, and finally, to only 3% in 2017.

Year Allotment Obligation Unutilized Allotment Underspending Rate
2015 351,113,569,961 308,135,967,600 42,977,602,361 12%
2016 412,434,829,282 369,435,120,445 42,999,708,837 10%
2017 471,982,544,896 456,247,971,742 15,734,573,153 3%

Source: COA-AOM dated April 24, 2018

While DepEd Secretary Leonor Magtolis Briones admitted backlogs in procurement at the beginning of her term in 2016, she immediately initiated efforts to speed up the process and effect efficient budget utilization. Given the Department’s budget, she deemed it necessary to engage experts and assign focused units that will oversee its financial performance.

“Since we are committed to support the President’s 0+10-Point Socio-Economic Agenda and implement the 10-Point Agenda of DepEd, it is inevitable to get the best and the brightest individuals to join my team who are experts in the field of public financial management,” Briones shared.

To promote better financial management resulting to effective budget utilization, it may be recalled that the Department’s Finance Service was divided into two strands—Budget and Performance Monitoring under the leadership of Undersecretary Annalyn M. Sevilla, and Disbursement and Accounting under the leadership of Undersecretary Victoria M. Catibog.

In addition, Assistant Secretary Revsee A. Escobedo for Procurement Service and Project Management Service has spearheaded reforms in procurement processes. A full-time delivery unit, the Education Programs Delivery Unit (EPDU), was also created to keep track of budget utilization and monitor major programs, activities, and projects of the Department.

Organizational developments

The Department’s improved performance in budget utilization may be attributed to various efforts initiated across all levels of the organization.

The Office of Finance—Budget and Performance Monitoring has advocated and reiterated the early downloading of funds to implementing units in order to facilitate the delivery of projects at the school level. A Department Memorandum was issued to ensure that there shall be no more downloading of funds during the fourth quarter of the year, so that projects and activities are accomplished before year-end.
Likewise, the Secretary spearheaded the creation of a Fiscal Reforms Committee for the implementation of DepEd’s public financial management reform program. The areas of concern covered the establishment of an integrated system of planning, budgeting, management of internal control, accounting, and reporting of the Department’s public finances.

In addition to the reconstitution of the six (6) Bids and Awards Committees (BACs) which will expedite projects needing BAC approval and procurement, the Office of Procurement Services has advocated resorting to alternative forms of procurement that are allowed by law such as the use of a framework agreement—a contractual arrangement that may be used for expendable or non-expendable goods that are repeatedly acquired by the procuring entity. As a method, it is deemed practical, efficient, and economical arrangement within the bounds of the law that will help facilitate and expedite DepEd’s procurement-heavy projects.
With regards to transfer of funds to the Department of Budget and Management–Procurement Service (DBM-PS), a DepEd Task Force has been created to constantly monitor the progress and status of these funds to assure the delivery of resources and services intended for such.
Even public schools have initiated reforms such as the conduct of a School-Maintenance and Other Operating Expenses (MOOE) Day where the school accountants, bookkeepers, and cash division personnel convene to process all the School-MOOE requirements of the principals—a best practice by Lanao Elementary School in the Schools Division of Ilocos Norte.
These developments strengthened collaboration among the Executive Committee, Planning Services, Finance Services, program implementers, and various stakeholders. The conduct of national clustered conferences and collaboration sessions, including review and rationalization of existing program policies, processes, and guidelines, has improved program implementation and monitoring.

Unusual challenges, continuing efforts
In a span of three years, the Department has done what it can to address the systemic problems and dysfunctions within the bureaucracy, and hurdle the challenges in the budget process. The Agency Performance Review (APR) rating issued by DBM on May 30, 2018 and the Audit Observation Memorandum (AOM) on 2017 budget utilization issued by the Commission of Audit (COA) on April 24, 2018 have recognized DepEd’s improved performance at its various levels of governance.

Given that increased budget utilization is a function of performance, DepEd assures its stakeholders that it will continuously deliver programs and services, accomplish its physical targets, and ensure that deep-seated bottlenecks, challenges, and constraints are fully addressed and eventually eliminated.

All of these efforts are geared towards the prompt delivery of quality, accessible, relevant, and liberating basic education to its 27.7million and continuously increasing number of learners.