TESDA’s billions: Goody story turns sorry with pork

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TWO PICTURES in stark contrast have been drawn about one agency: the Technical Education and Skills Development Authority (TESDA).

The first, a none-too-flattering one, by the Commission on Audit (COA), which speaks of “deficiencies” by the dozen in the agency’s implementation of its massive training and scholarship programs.

The second, glowing and pretty, by President Benigno S. Aquino III, who has heaped generous praise on TESDA on many occasions, citing it as an exemplar of performance in the executive branch, in terms of the volume of scholars that it has trained in recent years.

For sure, given the billions of pesos it has received in the last several years, the odds that TESDA would fail in delivering a bounty of results should be small. Then again, also because of its billions, the odds that TESDA would falter in project implementation, and slide to corruption and wasteful spending, would seem to be not small, either.

Thus, even as President Aquino seems confident that TESDA has been performing right and well, state auditors have been less than happy with the agency, which describes its main tasks as providing “direction, policies, programs, and standards toward quality technical education and skills development.”

Among other things, COA says that there have been many “deficiencies” in TESDA’s scholarship programs funded with pork monies and awarded to private training institutes, including missed number of target beneficiaries, alleged overpricing of supplies and training courses, contracts awarded without bidding, improper selection of beneficiaries, seminar attendance sheets of doubtful integrity, and the holding of different seminars on the same day and time for the same dubious beneficiaries, but at different locations.

Grew big too fast

According to COA’s 2013 annual agency report on TESDA, such deficiencies were particularly present in its implementation of two major programs that had been expanded using lumpsum monies that had been loaded up in TESDA’s budget that year: Training for Work Scholarship Program (TWSP) and Cash-for-Training Project (C4TP).

The report also revealed what the state auditors said was “non-compliance” in the implementation of TWSP by TESDA’s partner Technical Vocational Institutions (TVIs) or partner training entities from the private sector.

For 2012 and 2013, data from COA and the Department of Budget and Management (DBM) showed that TESDA received a total of P427.09 million in PDAF from legislators, including 19 who gave their pork monies to projects implemented by at least nine apparently favored TVIs.

(Ilaw ng Bayan and Informatics Computer Institute Valenzuela did not appear in DBM’s data on PDAF releases coursed through TESDA.)

TWSP had been funded under TESDA’s regular budget in previous years. In 2012, TWSP was expanded, while C4TP was started as “a program funded from DSWD (Department of Social Welfare and Development) designed to focus on the potential contributions of disadvantaged youth to nation building by engaging them in gainful employment by providing relevant, high quality and efficient technical education and skills development by TESDA.”

In 2012, TESDA received additional monies from the Priority Development Assistance Fund (PDAF) of legislators. It also got Disbursement Acceleration Program (DAP) funds that year, one sum being its own DAP allocation, and another representing a big portion of the DAP assigned to the DSWD.

But it was when TESDA had expanded too fast and its budget had grown too fat that COA found major discrepancies in project implementation. This was even as COA cited that TESDA had reported good to outstanding results on its “key performance indicators” – i.e., number of scholars trained, graduated, assessed, and employed, and number of seminars conducted – in 2013.

In the end, the picture that emerges is that while TESDA has been striving to surpass the targets of its regular programs, its more generously funded training tracks have gotten caught in a web of conflicting interests – politics, commerce, and corruption – involving some TVIs favored by a number of legislators, and favored further by some TESDA officers at the central, regional, and provincial offices.

It’s an image that TESDA Director General Emmanuel Joel Villanueva obviously doesn’t cherish. Speaking with PCIJ by phone recently, he said that his problem with COA is it does not update its prior year’s reports to reflect agency action on its findings in subsequent months.

“Ang ano ko lang sa COA, every time they come out with report, they do not lift a finger to update the report and say naayos na. Hindi raw nila policy ’yun .  (My concern with COA is, every time they come out with a report, they do not a lift a finger to update the report and say that the problem has been addressed. They say it’s not their policy),” Villanueva said

He also said that despite COA’s adverse findings on TESDA in COA’s report for 2013, “since I took over, at no time has COA issued a notice of disallowance or notice of suspension on me or TESDA.” Villanueva became TESDA chief in July 2010.

Non-compliant TVIs

COA found at least 11 TVIs non-compliant or with deficiencies in implementing TWSP: Asian Touch International Institute Inc.; Asian Spirit Career Foundation, Inc.; Meridian International College of Business, Arts and Technology; Phil-Best Entrepreneurs; Ilaw ng Bayan Foundation, Inc.; Informatics Computer Institute Valenzuela; I-Connect Solutions Tek Bok Inc.; Matuwid na Landas Foundation, Inc.; Serbisyong Pagmamahal Foundation, Inc.; Mechatronics Technologies, Inc.; and BSC Technological Institute, Inc.

PCIJ research on these TVIs reveals that two of them had already ceased operations in 2014, after cornering multimillion-peso contracts from TESDA.  Two others have clear political connections, while at least two more also appear to have links with a Napoles-like network of dubious nongovernment organizations (NGOs). One TVI meanwhile was incorporated in the same year that it snagged multimillion-peso projects with TESDA. Three others are sister-firms that share the same set of directors and owners.

In sum, of the P125.95-million pork funds that was downloaded to TESDA in 2013, TESDA’s offices in NCR (National Capital Region), Region 1V-A (CALABARZON), and Region IV-B (MIMAROPA) received P98.63 million or 78.31 percent. By yearend, they had disbursed P92.2 million, mostly to the favored TVIs.

Nine of these TVIs, according to DBM, received a low of P12.5 million to a high of P90.95 million in various tranches from TESDA, which in turn received the pork monies of legislators. These TVIs, DBM data showed, started receiving portions of pork in 2010.

19 legislators

Altogether, according to COA and DBM reports, there were at least 19 legislators who enabled these TVIs to secure contracts with TESDA: Representatives Mar-Len Abigail Binay, Monique Yazmin Lagdameo, Ma. Rachel Arenas, Oscar G. Malapitan, Romero Federico S. Quimbo, William Irwin C. Tieng, Cinchona C. Cruz-Gonzales, Sigfrido R. Tinga, Sherwin N. Tugna, Antonio C. Alvarez, Victorino Dennis M. Socrates, Arnel M. Cerafica, Cesar V. Sarmiento, Tobias Reynald M. Tiangco, and Winston T. Castelo.

(Cruz-Gonzales and Tugna are representatives of the party-list group Citizens’ Battle Against Corruption or CIBAC. TESDA’s Villanueva had also sat in Congress as a CIBAC representative from 2001 to 2010.)

COA noted as well that there seemed to be a select few among the TVIs that received the bulk of pork monies from TESDA’s offices in NCR, CALABARZON and MIMAROPA.

In 2013, of total pork disbursement of P92.18 million from the three TESDA regional offices, P52.17 million or nearly 60 percent went to only three TVIs: Asian Spirit Career Foundation, Inc., Asian Touch International Training Institute, Inc., and Phil-Best Entrepreneurs, Inc., according to the COA report. COA observed, though, that the three were “the only accredited mobile training providers, which can offer the requested training by the constituents and can reach out to far-flung barangays.”

Between 2011 and 2013, the three firms were endorsed by nine legislators in all. Four lawmakers, however, endorsed all three companies during this period: Binay, Lagdameo, Quimbo, and Tieng. Interestingly, too, corporate records filed by the three companies with the Securities and Exchange Commission (SEC) show them as having the same shareholders and owners. In an interview with PCIJ, an incorporator and director of Asian Touch confirmed that it is a sister company of the other two.

More money for less

But this was not the only thing that COA seemed to consider as unusual with these TVIs. In its report, it said that TESDA had paid these three, as well as BSC Technological Institute, Inc., much more per scholar for attending seminars that were much shorter than those conducted by TESDA’s own training institutes. (COA based its calculations on the per capita rate per scholar and the number of hours that the seminars ran.)

Put another way, compared with TESDA institutes, these TVIs with projects under TESDA’s lumpsum funds got a lot more money for fewer scholars who attended shorter seminars.

COA also indicated that the employment of the same TVIs again and again “deprived other TVIs with equal training quality and resulted in instances of overlapping schedules of trainees/scholars; trainings conducted for more than 25 scholars per batch… and multi-availment of training programs of one scholar.”

More details on these findings appear in COA’s audit on TESDA for 2013:

• “Two or more batches/courses conducted with 33 to 76 scholars in the same place, day and time, and two or more batches conducted on the same day and time but in different locations with only one or the same instructor/trainer.”
• “Unreasonable training cost and lesser/disproportionate training hours that range from P314.60 to P13,000.00 and three days to 65 days difference, respectively… the number of training days were shortened by 12 to 26 days than the required number of training days.”
• In Region IV-A, “the number of training hours/days in the qualification for PDAF is lesser than as required in TVET (Technical Vocational Education Training) qualification title, thus the scholars might not have acquired the desired full core competencies.”
• “The training cost for the PDAF (courses/batches) was equal or even higher than the TVET qualification title, thus the government expended more for training cost under PDAF.”

To illustrate the discrepancies, COA compared the unit cost per scholar and total training hours required in TESDA-run seminars with those conducted in CALABARZON and NCR by Asian Spirit, Asian Touch, and Phil-Best, which were endorsed by party-list and district representatives.

• Beauty Care No. II course: TESDA-run seminars cost P5,000 per scholar for 1,098 training hours in 138 training days; For the PDAF-funded seminars, P3,000 per scholar for 24 training hours in three training days.
• Hilot (Wellness Massage) course: For TESDA-run seminars, P5,000 per scholar, 120 hours in 15 days; for PDAF-funded seminars, P7,000 per scholar, 80 training hours in 10 training days.
• Hairdressing NC II course: For TESDA-run seminars, P5,000 per scholar, 656 hours in 82 days; for PDAF-funded seminars (Basic Hair-Cutting), P3,000 per scholar, 24 hours in three days.
• Bartending course: For TESDA-run seminars, P5,000 per scholar, 286 hours in 36 days; for PDAF-funded seminars (Basic Cocktails), P3,000 per scholar, 24 hours in three days.
• Food and Beverages course: For TESDA-run seminars, P3,500 per scholar, 336 hours in 42 days; for PDAF-funded seminars (Basic Waitering), P3,500 per scholar, 24 hours in three days.
• Beauty Care NC II: For TESDA-run seminars, P5,000 per scholar, 1,098 hours in 138 days; for PDAF-funded seminars (Manicure/Pedicure with Nail Art), P3,000 per scholar, 24 hours in three days.

In a recent interview with PCIJ, Ma. Joycelynn L. Rodriguez, an incorporator and board member of Asian Spirit, Asian Touch, and Phil-Best, said that the legislators allotted their PDAF to the three TVIs’ schools because “they know that these implement the TESDA-funded programs properly” and that their constituents would “really benefit” from the programs.

Rodriguez said that TESDA pays them only after the training sessions are over and an audit is done. She said that they have no “ghost trainings.”

COA, she said, had wanted “to be God.” According to Rodriguez, COA follows a different set of implementation guidelines. She added that they had invited state auditors to conduct a check on their training centers, classes, and their students, but no one from COA showed up.

“We are doing our part in helping out-of-school youths, mothers,” said Rodriguez. Most of those taking classes at Phil-Best institutes, she said, are indigents, some of who are former drug addicts, she said. According to Rodriguez, Phil-Best trains students “interested in marketing and food and beverages.” TESDA’s website also has Phil-Best offering training courses on “ body massage, beauty care, make up, foot spa, and hand spa.”

Rodriguez said that Phil-Best, Asian Touch, and Asian Spirit are all TESDA-accredited. Asian Touch – which started out as a caregiver training center – in particular was the first to get national accreditation from TESDA, she said.

Rodriguez pointed out that Asian Spirit even bought trucks for mobile training sessions, which she described as the first of their kind in the country. She explained that for the mobile training sessions, it is the institute that goes to barangays instead of the trainees going to training sites. This solves the problem of transportation costs for trainees, said Rodriguez.

According to TESDA’s website, the TESDA courses offered by Asian Spirit include those on “Beauty Care Services, Hilot, Housekeeping, Body Massage, and Body Scrub.” But Rodriguez said that there are now plans to close down Asian Spirit because, she said, its partnership with Japan-based agencies has already ended.

Rules don’t apply?

Meanwhile, in response to COA’s queries on how the discrepancies it observed came about, the Management of TESDA Region IV-A said that “under the Guidelines on the Implementation of the Training Programs under PDAF, qualifications which are not regulated by the Training Regulation can be covered by PDAF.”

The PDAF-funded seminars, it reasoned out, are “not covered” by TESDA’s training rules, except that these should adhere, “whenever applicable,” to the competencies or cluster of competencies prescribed in TESDA’s Training Regulations.

“This would mean that programs without training regulation (NTR) can be implemented under the Technology-Based Community Training Programs, which would gear toward self-employment or entrepreneurship or technopreneurship,” said TESDA’s Management.

TESDA Region IV-A Management’s response to COA ended with this: “The training program conducted under the program were identified/approved by the concerned Congressperson with proposals and submitted to TESDA.”

COA’s queries on the pork-funded seminars conducted by BSC Technological Institute, Inc. would draw similar responses from TESDA. BSC had gotten P3 million for the “Scholarship Program for Hairdressing NC II” courtesy of pork monies from Arenas, Pangasinan’s representative. Scrutinizing the PDAF-funded training courses run by BSC, COA had noted the same discrepancies – higher cost per scholar for much shorter seminars – it had observed with the three sister TVIs that conducted seminars in CALABARZON.

TESDA-MuntiParLasTaPat Management’s reply to COA: “The guidelines for the Priority Development Assistance Fund (PDAF) under TESDA Circular 23, series of 2011 dated October 10, 2011, has not provided a ceiling for the training cost and prescribed number of training hours under the Technology-based Community Training Program.”

“For this, reason,” it continued, “it cannot be concluded that the BSC’s training cost is higher by P13,000.00 per scholar than the standard.  Absent any express prohibition on charging beyond what is supposed to be the ceiling, the claim of the BSC cannot be deemed irregular.”

“It bears emphasis,” it said, “that TESDA controls and regulates only the amount of assessment fee but not the tuition fee for every course or qualification being offered to the public by a private TVI under the PDAF-sponsored scholarship program, as compared with C4TP/TWSP where funds come from the budget of TESDA.”

In other words, while PDAF and other lumpsum monies had been loaded up in TESDA’s budget, TESDA should not and could not, direct or control how these are spent, even in instances when its own rules are being defied. When it comes to pork funds, only legislators and local officials could say how and where these should go.

A secret purse?

The transformation of a tiny agency attached to the Department of Labor and Employment (DOLE) into a virtual catchment basin or even secret purse for bankrolling the so-called “scholarship programs” of legislators and local officials under the Aquino administration appears to have begun in 2012.

Under the present government, TESDA started with a “regular” or “agency specific budget” of only P2.84 billion in 2010 and 2011. It dipped slightly to P2.75 billion in 2012. It then rose a bit to P2.97 billion in 2013, jumped to P5.12 billion in 2014, and grew further to P5.32 billion in 2015.

It was 2012, however, which actually marked the start of TESDA’s foray into big money. This was when it received P2.95 billion in lumpsum funds or more than its own agency budget, supposedly to expand TWSP and to launch the Cash-for-Training Program of DSWD.

The amount included P1.35 billion from the Disbursement Acceleration Program (DAP) for 2012 and as “continuing appropriation” from 2011; and P301 million in PDAF.

Another P1.31 billion came just as the year was ending in December 2012, from the DSWD for the implementation of TESDA-DSWD Cash-for-Training Project; this, though, was not used in 2012.

In 2013, TESDA’s regular agency budget was listed under the General Appropriations Act (GAA) to be only P2.97 billion. In truth, however, TESDA received a total appropriation of P3.82 billion.

Aside from its agency specific budget of P2.971 billion, it also got a P365-million special purpose fund and P144.8-million automatic appropriations.

In addition, it received P1.72 billion in lumpsum funds — P1.47 billion of its own DAP and portions of the DAP of DSWD; and P125.9 million in PDAF.

The Supreme Court, however, ruled pork to be unconstitutional in November 2013. So in 2014, the government put in place a modified system of budget earmarks. The pet projects of legislators were enrolled in the budgets of five executive agencies, including TESDA. As a result, TESDA’s “agency specific budget” grew twice as much to P5.12 billion in 2014.  This year, its allocation rose further to P5.32 billion.

Such additional monies, though, were being downloaded mostly to TESDA’s provincial and regional offices, released at the discretion of their directors, and for “scholars” and typically private training institutes endorsed and/or preselected by legislators and local officials.

Missed target, deadline

All these complications, of course, did not excuse TESDA from meeting its targets. But the agency seemed to have taken more than it could deliver with its pork-infused and expanded programs.

According to COA’s report that was released in June 2014, TESDA had missed its targeted number of scholars/trainees under TWSP in 2013 by 10 percent. It had also failed to spend all of its lumpsum funds for both TWSP and C4TP within the year.

TESDA had aimed to train 261,865 scholars under TWSP and C4TP in 2013, COA noted. By mid-2014, however, it had only 234,223 “graduates/ongoing trainees,” for a balance of 27,642 scholars.

In addition, COA said TESDA had an unused balance of P292.11 million by mid-2014, and that the agency had failed to revert this amount to the Treasury.

In his reply letter to PCIJ last week, TESDA’s Villanueva wrote that as of June 2015 – or a year after the COA had finalized its audit report on TESDA’s budget in 2013 – “based on monitoring of the TESDA-Project Management Office, out of the 261,865 targeted scholars, 240,648 enrolled and 233,776 graduated, of which 6,872 dropped out/did not continue the training (or 2.86% drop-out rate).” This, he said, was “below the allowable 5% drop-out rate.”

Again as of June 2015, Villanueva said, “the adjusted total unutilized fund as reported to COA is only P109.84 million,” and that “the entire amount was totally reverted to: (a) General Appropriations Fund – P6.97 million; and (b) National Treasury – P102.87million.”