THE Commission on Audit has called out the management of the University of Science and Technology of Southern Philippines (USTsP) for non-compliance with the guidelines set by the Commission on Higher Education (CHED) on funding research and extension services in 2024.
In a Compliance Audit released on June 11, 2025, state auditors revealed that the state university underfunded research by P8.84 million and extension services by P19.08 million.
Citing CHED Memorandum Order No. 20, s. 2011, the COA noted that both research function and extension services are supposed to be allocated a fixed rate of 10 percent of tuition after deducting allowance for administrative costs.
The budget for research shall cover “expenditure related to the formulation or implementation of programs, projects, and activities, such as, but not limited to honoraria and incentives of researchers, lecturers, or research presenters, research assistants (with contract of employment) and wages of other personnel, office and IT equipment, facilities, supplies and materials, training and travel expenses.”
On the other hand, the budget for extension services is intended to fund “the dissemination of the research output for the use and benefit of the community or locality in which the SUC is located.”
Chargeable against the said budget are “instructional materials necessary for technology transfer, skills training in livelihood relative to the research output, honoraria of trainers undertaking the technology transfer of research outputs to the community, travel, training and seminar of extension services personnel, trainers’ industry immersion program, wages of contract of job order personnel.”
Auditors said the final budget allocation of the university in 2024 approved by the Board of Regents was P308.69 million, which left a balance of P262.38 million after deducting the 15 percent common cost of P46.3 million.
Out of the balance, research and extension services were supposed to be allocated P26.238 million each, but instead received only P17.29 million and P7.15 million, respectively.
“The analysis revealed that the University’s budget allocation for Research and Extension Services was relatively low compared to the requirements outlined in CMO 20. The directive emphasizes the importance of adequate funding for research and extension initiatives. The reduced allocations may hinder institutional compliance,” the COA said.
The audit team noted that instead of complying with the funding requirements in the CHED order, the university based budget allocations on “predetermined ceilings influenced by utilization trends.
It warned that if the non-compliance continues, the state university runs the risk of incurring obligations not backed by available funds or even a budget overdraft.
“We recommended that Management proactively adhere to the provisions of CMO 20 s. 2011 …when utilizing actual tuition collections for budget allocations. This will ensure that funds are properly allocated and available for essential functions, including research and extension services,” the COA said.
The university management, however, defended its practice, saying the applicability of CHED Memorandum Order No. 20 has been questioned during the 2025 budget deliberations, where lawmakers supposedly agreed that the CMO No. 20 is no longer binding.
The USTsP management took this to mean that compliance with the CHED order is not discretionary to individual university boards.
However, the audit team insisted that the CHED memorandum “remains in full force and effect” and would remain so until there is an official issuance repealing or superseding it.
