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Contribution of income generating activities to financing secondary school education in Kenya Department of Educational Management and Foundations Maseno

University, Kenya (13 February, 2011) Income Generating Activities that schools engaged in

largely depend on the type of the school and its status. Ho Ming Ng, (2000) cited the ability of schools to create income positively correlates to the school status. The Income Generating Activities made available invaluable contribution towards the purchase of teaching and learning resources. The main Challenges facing the Income Generating Activities were lack of capital, lack of entrepreneurial skills on the part of the principals and poor record management. Toward financial sustainability as a SUC in the commencement exercise at Laguna State Polytechnic University http://bongbongm.com. Senator Ferdinand R. Marcos Jr. cited the importance of public universities and its capacity to produce quality graduates that the dilemma in reducing government subsidy of higher education. SUCs need to be creative in a reasonable return of investment by engaging income generating activities to raises needed fund like LSPU generates its own resources by upgrading its facilities, faculty and academic programs, by engaging in production or income generating activities. It was mentioned that CHED launched SUCs Corporation Project to help SUCs to become financially self-reliant and they identified 24 SUCS with the suitable assets and ready technologies that could be utilized for IGP, then provided some training, technical and funding support (ranging from 100,000 to 1.2 Million per SUC) to help them get started with their IGPS. In 2005, an additional P6 Million was released for the three most promising IGPS.

SUCs engaged in business or income generating project that two condition need to be meet so that the quality of education would not b sacrificed. First, it was directive to undertake income generating project that is compatible with its function and area of strength to go into an activity and developed expertise that acquired some suitable assets to capitalize on. Second, SUCs has been required to tap a private sector partner to take care of the business end so that the academic people could concentrate on their teaching chores.

13 feet wide( lapad) 22 feet long ( haba) Income generating higer ed. Income generation tool - www2.redbridge.gov.uk/.../school.../idoc.ashx... http://www.manilastandardtoday.com He quotes Andrew Savitz, a governance scholar, who says that a sustainable business enterprise (SBE) is one that creates profits while protecting the environment and improving the lives of those with whom it interacts. A sustainable social enterprise, on the other hand, is one that improves the lives of people while protecting the environment and fulfilling the economic needs of the owners.

http://www.schoolenterprise.com/financial/income_generation/income_generation.html Nick Durkin is the former bursar of Charterhouse and is now a consultant with Athis.

Income Generation

Exploiting school assets

What sort of person would fit the role of commercial manager and how can you overcome some of the pitfalls he or she is likely to meet? By Nick Durkin

The level of appointment of a commercial manager will depend on a review of the schools letting potential and whether or not the person appointed will control the sports centre and retail outlets clothes shop, sports shop, and bookshop. Such a review is best undertaken by outside professionals who come with a fresh pair of eyes to explore the commercial opportunities. They can make an objective assessment of the schools income potential in all areas and suggest annual attainment targets. It is important that the subsequent business plan is endorsed by the governors and the schools senior management. While not impossible, it is likely that a commercial manager will come from outside the academic/support staff community. He/she will bring skills from other businesses that will be essential in running a successful lettings programme for the school, whose turnover could grow to a substantial six figure sum. A successful track record in business development is essential, but the school should realise that to outsiders schools have hierarchical management structures which can appear daunting. It is therefore essential to appoint someone with resilience and sense of humour who can maintain excellent relations with academic and support staff alike. The commercial manager will usually report to the bursar, sit on the board of the schools trading company(s) and be a member of the common room. Non-fee income Schools generally refer to lettings as the generic term for non-fee generated income. This category of income includes courses, dinners, hire of facilities, music school theatre, art school, sports pitches and sports centres. The commercial manager will have to allocate priorities for each area of business under his or her control. One area with the potential to increase school facilities and income generation is the sports centre, particularly if combined with a swimming pool. Many schools, both boarding and day, now run dual-use sports centres that combine both pupil and public use. While pupil use will be the priority, there is substantial free time for commercial use. Managed professionally, a sports centre should generate a revenue surplus and cover yearround running costs
http://spamastedu.com/index.php? option=com_content&view=article&id=71:article-additions-to-thefamily&catid=36:about-us

Article: Additions to the Family


Monday, 28 February 2011 08:12 1. Graduate School Headed by none other than Mr. Rommel D. Cabalquinto from CAFMS, and with coordinator in CAS in the person of Dr. Helen W. Noel, SPAMAST Graduate School is now ready than ever to serve those who wish to earn graduate degrees in Education, Agri-Business Management, Marine Biodiversity, and Fisheries. The job description of the Chairman of the Graduate School is the same with the abovementioned job description of DAS Chairman.

1. Business Enterprise Development Office (BEDO) All income generating projects of the College are now under the supervision of the Business Enterprise Development Office (BEDO), managed by Mr. Godofredo F. Lubat, Jr. The job description of the Manager of BEDO is the following:

Organizes production units, which shall be composed of appropriate set of officers designated by the President Supervises and monitors production units that undertake income-producing projects and sees to it that the earnings derived there from shall form part of the revolving fund of the Institution likewise the observance of proper procedures involving financial transactions. Sees to it that the production projects shall also serve as laboratory and demonstration area for instruction, research and extension programs Proposes incentive scheme, based on the net income, to encourage personnel involved in optimizing the production activity income. ARBP

http://www.usethekey.org.uk/school-evaluation-and-improvement/fundraising/raising-funds-and-applying-for-grants/generating-additional-income-for-aschool

Generating additional income for a school


Ref: 4117 Last updated on 16 Aug 2011 How can schools raise money? One of our associate education experts lists ways in which schools can generate income. We include information on lettings, fundraising and working with local businesses. We also look at a case study of a primary school that is a leader on income generation.

Contents [Hide]
1. 1 Letting school facilities 2. 2 Fundraising 3. 3 Working with local businesses 4. 4 Applying for grants 5. 5 Alternative ways to generate income in a school 6. 6 Income generation: Cotgrave Candleby Lane Primary School 7. 7 Additional sources and further reading

In this article, one of our associate education experts, Nazli Hussein, suggests some ways in which schools can generate additional income.

Letting school facilities


Nazli recommends having one document that includes a clear lettings policy, transparent charges per area and a booking form.

A single document like this is easier to email out to people who enquire about hiring space at the school. Think about what extras you can include, such as car parking, IT equipment and catering. Create a document for marketing the facilities that are available to hire... Create a document for marketing the facilities that are available to hire, and source a database of local organisations that this document can be sent to. Ensure that internal staff dealing with lettings respond quickly to enquiries. For more information about charging for the hire of school facilities, see an additional article from The Key: Letting school premises: charging http://www.usethekey.org.uk/administration-and-management/facilities-and-supplies/sitemaintenance/letting-premises-charging

Fundraising
Schools can also try to raise money through fundraising events. Nazli says that these do not usually generate a huge amount of income but are fun and help foster a sense of community spirit. There are a huge number of fundraising activities to choose from. Unusual sponsored activities are more likely to attract attention from the local community and generate sponsorship from parents, stakeholders and the community. Schools could also think about ways in which their pupils (as opposed to staff and parents) can raise money, particularly in secondary school. Another article from The Key has ideas about fundraising events that schools could hold: Ideas for effective fundraising http://www.usethekey.org.uk/school-evaluation-and-improvement/fund-raising/raising-fundsand-applying-for-grants/information-on-fundraising-in-the-wider-community Schools might also want to consider employing a professional fundraiser. See The Keys article, linked to below, for tips on working with a professional fundraiser: Employing a professional fundraiser http://www.usethekey.org.uk/school-evaluation-and-improvement/fund-raising/raising-fundsand-applying-for-grants/employing-a-professional-fundraiser

Working with local businesses


Schools can approach local businesses for funds and help in kind. Nazli suggests that schools develop links with blue chip companies that have a corporate social responsibility (CSR) policy of working with schools. While this does not generate income, it can allow schools to access free services, such as mentoring or assistance with small capital building works. Schools can also approach businesses about sponsoring activities or facilities Schools can also approach businesses about sponsoring activities or facilities, such as sports events and kit/clothing, prize-giving events, a school minibus, publicity-related events, computer equipment, open days or community events.

A video from Teachers TV shows how one primary school in London has successfully raised funds from local businesses. The top tips from the expert fundraisers in the programme include:
Ensure that your project links with the potential funders' priorities, for example check whether they have a policy on CSR Think about what the funder will get out of it or what the school can offer in return: fulfilling the companys CSR aims, advertising, or use of the schools facilities Tap into parents contacts in organisations that could provide funding for the school. Collect information on the professions of all parents, ex-pupils and anyone to do with the school, as they might be able to provide a personal contact within a company If your parent teacher association has an annual income that exceeds 5,000, it can register as a charity. This reminds businesses that youre raising money for the benefit of other people Always say thank you. Think about sending photos of the event or letters from the children to let businesses know what their money was used for

Leadership toolkit local business fundraising, Teachers Media (14 minutes) http://www.teachersmedia.co.uk/videos/local-business-fundraising

Applying for grants


There are numerous funding opportunities from local authorities and grant-awarding bodies. It is worth making yourself aware of these and applying to as many as possible. Information on writing applications for funding grants can be found in this additional article from The Key: Fundraising: applying for grants http://www.usethekey.org.uk/school-evaluation-and-improvement/fund-raising/raising-fundsand-applying-for-grants/fundraising-applying-for-grants Nazli Hussein entitled Generating additional income for a school posted August 2011. He cited that school photos generate a percentage of income for the school. School uniform shop can generate income by selling basic uniform items to pupils and school should ensure that it has a good marketing and communications plan in place to entice new pupils to the school

Alternative ways to generate income in a school


Nazli suggests a number of other activities that could be used to generate income or save on costs.

Art and photography shows

Pupils at the school could organise shows to display and sell their work. These shows could be held in the school, or in a local library in order to attract a wider audience. Pupils at the school could organise shows to display and sell their work
School photos

All orders placed for school photos generate a percentage of income for the school. Photos can be taken at the end of the school year; or you could take them in November and sell them in time to be Christmas presents.
Car boot sales and parking facilities

Schools with large car parking areas could team up with a car boot sale organiser who will pay the school a percentage of the takings (from each car paying entry). Schools could also consider offering additional parking facilities for nearby events, such as sporting events.
Recycling equipment for cash

Schools can encourage pupils, parents and staff to bring in their old mobile phones. These can then be sent to organisations that will pay for them, such as: Phone recycle bank http://www.phonerecyclebank.com/ This can also apply to computers and printer cartridges, and could bring in 1,000 a year for the school, if well organised. We buy any laptops http://www.webuyanylaptop.co.uk/ Cash for cartridges http://www.cashforcartridges.co.uk/ Recycling for cash http://www.recyclingforcash.co.uk/ The websites listed above, and any other companies listed in this article, are included for your information and do not constitute a recommendation from The Key.
Voucher schemes

There are a lot of schemes where pupils, parents and staff collect vouchers for the school, which can then be exchanged for curriculum equipment. Sainsburys Active Kids is a scheme where schools can exchange Sainsburys vouchers for sports equipment. Box Tops for Books offers free educational books from Dorling Kindersley in exchange for tokens found on the top of Nestl cereal boxes. Sainsburys Active Kids http://www2.sainsburys.co.uk/activekids/

Box Tops for Books http://www.boxtops4education.co.uk/home.aspx


School uniform shop

Schools can generate income by selling basic uniform items to pupils. You could also think of one-off promotions, such as selling hooded jumpers with all the pupil names on the back at the end of the school year. Allowing pupils to help with the design or choice of colour can encourage them to buy and wear these items.
Adult education classes

A varied timetable of evening and weekend adult education classes allows the school to use its facilities to generate an income. Make sure that the cost of the administration required for organising this is covered by the charges made for the classes.
Media resources

Schools could develop their media resources/reprographics department into a professional operation and offer services, such as full printing and design, to local businesses.
Catering

Schools have a greater influence over the quality and flexibility of their catering service if it is brought in-house. This also enables the school to offer catering as part of a lettings package. The option of catering can increase the attractiveness of the lettings offer for individuals and organisations interested in hiring areas of the school. Setting up an on-site cafe could generate income from pupils, staff and visitors, as well as saving schools the need for expensive leasing arrangements for vending machines.
Share services with other schools

You might want to consider whether you could work with other local schools to share services such as site and finance teams, and human resources.
Outsourcing specialist staff

Schools could outsource their business manager, or other staff with specialist skills (including the headteacher), to schools that need the support but cannot afford full-time staff. In order to create the time to allow staff to do this, the school must have its own systems and procedures streamlined and operating well. Schools could outsource their business manager... to schools that need the support
Using a procurement specialist

Schools could consider employing the services of a procurement consultant, which is usually guaranteed to save the school money in a number of areas. While a consultant will take a cut of any money saved in the first year, the school will be able to keep all the savings in subsequent years.
Using a timetabling consultant

Schools could also think about employing the services of a timetabling consultant. A consultant can scientifically map out all your teaching staff, generate a cost per period of teaching, and

show where individuals have slack in their timetabled hours or where they should be doubling up and teaching other subjects. This type of consultant could also show you where staffing cuts could be made to develop a leaner staffing structure.
Volunteers in schools

Schools can use volunteers in all sorts of ways that could reduce staffing costs. Have recruitment systems, such as job descriptions and induction procedures, set up to make maximum use of volunteers.
Attracting more pupils

As each pupil is worth an amount of funding, a school should ensure that it has a good marketing and communications plan in place to entice new pupils to the school. A marketing plan can cover anything from developing a clear and well-designed website to having a policy of the headteacher visiting primary schools.
Free school meals

Nazli says that it is worth ensuring that as many eligible pupils as possible apply for free school meals, irrespective of whether they eat a school meal or packed lunch. This is because local authority funding is based on the number of pupils that qualify.

Income generation: Cotgrave Candleby Lane Primary School


Cotgrave Candleby Lane Primary School in Cotgrave, Nottinghamshire is a large primary school (over 500 pupils) in a former mining town. The school is regarded as a leader on income generation, and the school business manager has presented at a conference for the National College for School Leadership (National College). The schools enterprising use of its buildings and resources has the dual effect of aiding community cohesion, as well as generating substantial finances for the school.
Extended school hours

The school is open from 8am to 9pm, with site staff being responsible for closing the school at the end of evening activities. The site manager has contractual terms which stipulate weekend working, and he receives an hour overtime pay at the beginning and end of each session. The school hosts a wide range of activities, from Scouting groups to local sports teams, monthly cinema nights and local authority (LA)/National College/business meetings.
Interacting with local businesses

Business in the Community has details of community projects that local businesses can research and take part in. Schools can apply to become considered as one of these community projects. The organisation acts as a go-between for businesses and communities. Business in the Community http://www.bitc.org.uk/

The school also has a creative curriculum in which the aim is to introduce 'real-life' situations to the children. This involves pupils setting up mini-businesses as a way of learning about their community. The school interacts closely with all sizes of business, from small family businesses to large corporate organisations based nearby.
Differential rates for users

The school has different rates business and community - which it sets for groups leasing its facilities. The business rate is set at a competitive rate, similar to those for other facilities such as leisure centres or conference facilities. The community rate is a lower charge which is levied for local groups. Where there is some debate over what rate should be set, the governing body convenes to decide.
Being proactive at generating ideas

The school has been proactive in sourcing potential customers for its facilities, and has approached local sports associations directly and through marketing campaigns (sending out eleaflets as well as having banners displayed on the school gates and around the site). The school has also sought to integrate itself into the community by approaching both large and small local businesses and asking how the school might be involved in their CSR initiatives. The school business manager says: Schools might not think that they have the capacity to institute the kinds of changes and the schemes that they do at Cotgrave. However, they should be proactive and creative and look at new challenges as opportunities rather than difficulties. Cotgrave Candleby Lane School http://www.ccls.notts.sch.uk/

Additional sources and further reading


Nazli Hussein is an experienced school business manager who has worked in both primary and secondary schools. She has a degree in business/finance and a diploma in school business management.
http://www.codesria.org/IMG/pdf/04-BUTARE.pdf

http://etd-library.ku.ac.ke/etd/handle/123456789/719

Analysis of income generating activities in public secondary schools in Mulot division of Narok south district, Kenya
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dc.contributor.author Mutegi, John Miriungi dc.date.accessioned dc.date.available dc.date.issued dc.identifier.uri dc.description 2011-08-11T13:01:03Z 2011-08-11T13:01:03Z 2011-08-11 http://172.24.15.15:8080/etd/handle/123456789/719 Abstract en_U S

dc.description.abstrac Recent research has shown that almost all secondary en_U t schools in Kenya face serious financial difficulties due to S failure by parents to pay fees. As a result, schools are unable to meet their budgetary estimates, and this compromises the quality of secondary education in the country. Furthermore, there is rising concern about the amount of study time wasted by students as they are sent home for fees. At the same time, some headteachers feel that the recommended fees structure should be amended to allow schools to increase school fees in line with rising cost of living in the country. The problem addressed by this study, therefore, was that of the need for schools to make efficient use of all available opportunities to raise supplementary finances for funding their programs. The study therefore sought to find out how secondary schools in Narok South District had utilized existing school resources and income generating opportunities to raise extra funds for financing their programs. The study was carried out in secondary schools in Mulot Division of Narok South District in Rift Valley Province. from the 11 schools in Mulot Division, one school was randomly selected for a pilot study. All the remaining 10 schools took part in the final study. All the headteachers from the ten schools participated in the study. The research instruments

employed were questionnaires for headteachers and an observation schedule. After all data was collected, it was coded and entered in the computer for analysis using the Statistical Package for Social Sciences (SPSS). Descriptive statistics such as percentages, means and frequencies were used to report the data, which was reported in summary form using frequency distribution tables. The study established that although secondary schools in Mulot Division of Narok South District have made some efforts to generate income to supplement what they get from traditional sources, not all opportunities had been utilized. The schools earned between KShs 180,000 and KShs 16,000 annually from income generating activities, which is an indication that school-based income generating activities can be profitable ventures that schools could tap into to raise extra funds for financing educational programmes. Instead of over relying on the government and parents to raise funds for schools, headteachers should become more innovative and lead their schools to initiate activities that would be profitable for the schools. Furthermore, some of the initiatives are important learning opportunities for students. By incorporating participatory planning and innovative technologies, school headteachers will be able to overcome most of the challenges faced in implementation and management of school-based income generating initiatives. dc.description.sponso Kenyatta University rship dc.language.iso En Analysis of income generating activities in public secondary schools in Mulot division of Narok south district, Kenya Thesis en_U S en_U S en_U S

dc.title dc.type

http://www.pia.gov.ph/

PIA Press Release Tuesday, May 31, 2011

CHED to encourage state schools to engage in income generating projects


by Gideon M. Gapayao

MANILA, May 31 (PIA) The Commission on Higher Education (CHED) will encourage state universities and colleges (SUC) to engage in income generating projects (IGPs) to augment their budget, as government budget allocation for higher education was reduced last year. These are hard times all around and government is really tightening its belt. I understand why we cannot give a bigger budget to higher education, CHED Chairperson Dr. Patricia Licuanan said. So what is the solution since higher education is obviously very important? We have realized (and CHED is moving onto this), that SUCs have a lot of assets but they dont know how to use this well, she said. We are undertaking a project where we will have an inventory of the assets of SUCs, then we will get experts to help these SUCs develop these assets so they can be a bit more economically sustainable institution. Dr. Licuanan was guest, together with Atty. Tonisito Umali, Department of Education spokesperson at the Communication and News Exchange Forum (CNEX)/Talking Points sponsored by the Philippine Information Agency in cooperation with the Philippine Communications Operations Office. She said that SUCs cannot rely anymore totally on government. In fact, some SUCs already have income-generating projects, and they are allowed to use this income for their own operation, she added. Thus, CHED wants this strategy to be adopted by other SUVs. She said that the CHED wants that the opportunity to go into IGPs are distributed, and not only limited to those that have entrepreneurial skills. We want to help everybody at the same time, she said. Licuanan, however, admitted that there is currently no definite system in place yet to monitor the funds, which may be misused by some SUCs. She said that this will be very much the responsibility of the board of regents. CHED sits in the said body. Its a double-edged sword, she said. We have to watch out for that. (PND GGPIA-GHQ)
http://ccs.adnu.edu.ph/era/

ISORENA, Salvador V The Income Generating Strategies of State Universities and Colleges Research, 2002 CATANDUANES STATE COLLEGES

description: Higher Education Modernization Act of 1997 (RA 8292) subject: State Universities and Colleges--Income Generating Strategies geoindex: Income Generating Strategies

The principal source of income of SUCs is the government subsidy. Additional sources are tuition fees and other miscellaneous fees, but these fees are miserably low. The other sources of income of SUCs are those from the income generating projects and joint venture with business and industry. With these opportunities SUCs , can effectively earn resources for their own operation and become less dependent on national government subsidy ( PCER Report, 2000 ). In an attempt to encourage SUC to generate more revenues, the Higher Education Modernization Act of 1997 ( RA 8292 ) empowers the governing boards of SUCs to retain any income generated by the university or college and disburse it for any program or project, a privilege solely held by government-owned and controlled corporations (GOCC) in the past, the Report continued. The law also provide for the governing boards to go into the joint ventures with business and industry for the profitable management of the SUCs economic assets. These privileges should effectively enable the SUCs to support their own operation and rely less on the national government subsidy. The same report, however, noted that the combined SUC revenues for the last ten years average only to 1.29% of their yearly appropriation. On the average, therefore, 98.71% of their annual budget is subsidized. Although it still early to asset the effect of RA 8292, the 1998 and 1999 data showed a revenue rate that is even less than the 10year average. This is implies that the passage of RA 8292 has apparently failed to provide the incentives for the SUCs to improve income generation, possibly due to an assured government subsidy, the report added. The basic problem of the universities and colleges, according to Bermudo (1993), is funds. Such problem, he said, had resulted in low salary scale, poor school facilities, poorly trained teachers, ineffective instruction, inadequate research outputs and limited extension service. Sooner or later this problem can be compounded by the paralyzing effect of the government's perennial national budget deficit and may have taken its toll on the overall operation of SUCs if not given serious consideration by the concerned authorities. Since 1999, there has been a marked decrease of budgetary allocation for education and SUCs particularly on MOOE and capital outlay. In view of the belt-tightening measures adopted by the Arroyo administration, the Department of Budget and Management (DBM) had started pruning down the budgetary allocation on the entire bureaucracy, including allotment for MOOE and capital outlay among SUCs. Worse, there is even a very disturbing information circulating among these institution that the budget intended for MOOE will be totally phased out by the

DBM in 2005 In the propose 2003 national budget, for instance, Se n. Teresa Aquino Oreta criticized Malacaang for reducing by 80 percent the funds provided for teacher. Oreta said the cut would seriously undermine government efforts to upgrade public school teacher's skills to handle the teaching of the Revised Basic Education Curriculum (RBEC) This fund slash reflect the serious neglect by the Arroyo administration of the basic education sector, the so0lon said. She further said this was contrary to Pres. Gloria Macapagal - Arroyo's pledge during the Asia- Pacific Economic Cooperation Summit to give priority to education as a tool to fight poverty, which was the primary cause to terrorism in developing countries like the Philippines (PDI, 2002) With this major fund slash for the Department of Education (DepEd), it would be safe to assume that SUC-member institutions will not be spared either. Faced with the dilemma providing quality of education to an increasing student population vis- -vis insufficient/reduced government subsidy, what will SUCs do to counter said gloomy scenario? The answer is simple although comprehensive, challenging, imperative and painful SUCs have no recourse left but to become financially and fiscally autonomous from the national government. Although easily said than done, the key word self-reliance. If SUCs are to be freed from the shackles of dependency and insufficiency of government subsidies, its respective educational leaders should aim for self-reliance, utilizing in the process whatever precious human and natural resources they have at hand with dispatch, clear vision and direction. If SUCs cannot rely on the government subsidy they must exercise creativity at seeking other sources of funds to pursue effectively delivery of basic service of institution, research and extension (Bermudo, 1993). It should seek for endowment funds, locally or abroad, he added. The Advent of SUCs Corporation Projects: Legal and Strategies The present economic and political conditions leave SUC administrators no other portion but to engage in income generating projects in their respective institutions. This depressing scenario gradually creeping into the nerves of planners And decision-makers in the academe have led the SUCs though PASUC in making the united front and putting their acts together in order to soften the impact of the impending loss of MOOE subsidy. Essentially, it expedited the integration/internalization of corporation in the life of every SUCs Dr. Toyado of the CSC Planning Office said. The corporate personality of SUCs had been more or less, clearly define in Section 4 of the Higher Education Act of 1997 (RA 8292) which enumerates the specific powers and duties of the governing boards in addition to its general powers of administration

and exercise of all the powers granted to the Board of Director of corporation under Section 6 of Batas Pambansa Blg. 68, known as the Corporatization Code of the Philippines. Given flesh and substance through a comprehensive blueprint manned by highly committed manpower, this corporate personality shall serve as viable mechanism that will transform these state-run academic institutions into becoming centers of excellence and development over considerable period of time. Cognizant of the dilemma being confronted by these members institutions, the Congressional Commission on Education (EDCOM) had suggested the following courses of action, namely, (a) utilize or lease land resources and other state institutions to generate additional funds and (b) SUCs should be treated as public corporations in accordance with their charters. Corporatizaton as Emerging Concept in Higher Education Molly N. Lee described corporatization of public higher education institutions as follows: a) The Ivory Towers would be freed from the sackles of government bureaucratic provision and would be run like business corporations; b) They would be empowered to borrow money, enter into business, raise endowments, set up companies, acquire and hold investment shares; c) The government would continue to own most of the institution's existing assets and provide government funds for new programs and expensive capital projects. The corporatized institutions would shoulder the heavy burden of raising a major portion of their operating cost and; d) They would be expected to raise funds through all sorts in income-generating measures such as increasing tuition and other fees, expanding student enrollment, conducting consultancies and researches for industries and government, running shortterm courses to meet the need of the private sector, renting out physical facilities and other kinds of activities which the university/ college can offer. Buchbinder (1993) as cited by the CSC Corporatization Committee, said that the emerging image of the University as a business corporation rather than a public social institution has many er reaching implications. Essentially, the production and transmission of knowledge as market goods and saleable commodity, can be tested and put to productive use, it being one of the objectives of higher education. Buchbinder and Newson (1993) reported that universities now are adapting the style, forms and methods of business organizations. For instance, which student markets to serve, which enrollment policy to adopt - all decisions which may have been once based on academic criteria alone - are now considered in terms of detailed cost-revenue calculations and the assessment of whether they represent good business decisions. The CSC Corporatization Plan 2002-2005: Mission and Objectives

Comprehensively, the Plan had identified the following activities as viable sources of income: A. Facilities rentals a.1. gymnasium a.2. computer a.3. audio-visual room a.4. CIMC Little Theater a.5. dormitory a.6. parking fee space a.7. post office a.8. hammer will, copra sealer, rice thresher, forage chopper, tractor, grass cutter a.9. rentals of chairs, tables and other office furniture a.10. car wash center B. Agricultural, Fishery and Industrial Production b.1. crop production orchard, rice, corn b.2. animal production swine, poultry, fish pond b.3. industrial production steel fabrication, lathe and milling operation, electric and arc welding, auto repair and body building C. Small - Medium Scale Enterprise c.1. commercial center operation c.2. foods and canteen operation c.3. computer rental / services c.4. printing press c.5. review press c.6. bottling mineral water D. Knowledge - Based Project d.1. book writing d.2. production of instructional materials d.3. promotion and marketing of produced materials d.4. laboratory manuals d.5. CD ROM publication and desktop publishing d.6. plans and specifications for engineering works E. Other Internally Generated, Fiduciated and Incident Income e.1. increase in tuition fee in selected programs e.2. documentation and certifications fees e.3. penalties for deadlines e.4. college share from research grants for the utilization for its resources e.5 corporate/staff development program e.6. internet usage fee e.7. internet connection/subscription fee Corresponding strategies, targets and indicator have been identified per proposed

activities. As to organization and management, the CSC Corporate Business Affairs (CBAF) shall be governed by the Board of Management (BOM) and its directly under the VP for Research, Extension and Production, who acts as a coordinator, The BOM is headed by a program director who is the director of the CSC president representing the different areas such as business, agricultural, fishery, finance and administration. The BOM is the policy-making body of CBAF. The Corporate Business Affairs will have its own distinct accounting procedures, practices and internal controls as may be defined by the corporate accountant. The business involved in the program might be owned and operated by private business or groups and associations which may also involve the CSC faculty and non-teaching personnel. Thus, a separate treatment of the accounting procedure/financial management appropriate for the business that would be involved in the project. Implementing rules and regulations shall be formulated through the initiative of the Director of Corporate Business Affairs in consultation with the BOM and the final approval of the CSC President and the Board of Trustees. Subject to the result of the feasibility study to be conducted by the administration, the Corporatization Plan requires a total capitalization of ten million three hundred thousand pesos (P10,300,000.00) prorated as follows: a) college press (P5, 000,000), b) other projects (P5,000,000) and c) human resources center building conversion to commercial center (P300,000.00). Capital investment may be acquired from foreign grants/loans, local financing agencies through soft loans and/or seed money from CHED, the plan further emphasized. In the absence of seed money or initial funding support for the implementation of this program and projects, those projects that do not require capitalization on the part of CSC such as land resources utilization will have the highest priority for implementation it finally stressed. Concluding Statements SUCs should take note of the major observations contain in the PCER Report. The unwritten of unspoken messages sent by the Arroyo administration and past dispensation are crystal clear - - - the SUCs have to sink or swim amidst the deep blue sea of growing national budget deficit and serious neglect of education. In fairness, the government needs respite from the onslaught of series of crises, manmade and nature-induced. Nature-induced calamities are inevitable and can be mitigated in short-run. Man-made calamities such as graft and corruption and political bickering, on the other hand, are disgusting, punishable and revolting. Dealt accordingly, let the full force of the law fall on the guilty parties. No mater how it hurts, SUCs have to be weaned, at least partially, from government subsidies, especially those which have been existing for several decades.

The call of the times now is for the SUCs to be self-reliant, self-propelling and selfgoverning (Bermudo, 1993). Corporatization is a very promising and viable response to that call. Essentially, these corporatization projects aimed to transform SUCs into becoming financially stable and fiscally self-reliant through the adoption of strategies and measures from non-traditional sources other than the government. Confronted with this paradigm shift in administration vis- -vis corporatization of higher education, the more it becomes imperative for the SUC president to perform the role of leader-manager rolled into one. He/ she must be a leader who have the charisma to inspire, draw confidence, command respect and capability to steer the academe amidst socio-political storms, and a manager to get things done in the most effective and efficient manner. Bermudo (1993) added, the universities and colleges need certain vital characteristics in their president such as that of being an investment man and a fund raiser. He/ she must also be a risk taker, may I hasten to add. These leadership-managerial characteristics should be extended to include those in the hierarchy from the vice president down to the directors, deans, section/ division chiefs, project managers and others who are part and parcel of the planning, decision-making teams and implementers. The dilemma faced by the SUCs as regards constraints should not be construed as immovable stumbling blocks in their pursuit of academic excellence. Rather, it should serve as a challenge to their collective intellectual, leadership and managerial capabilities----they having a pool of precious natural resources and most of all, human capital ready for mobilization. Woe and pity, then unto SUC-member institutions, who are hibernating or who are at present in deep slumber and complacency while others have joined the band wagon of corporatization or rank of seasoned leader-managers. Never mind if the move is relatively late. It is better than doing nothing at all. The plan of the CSC administration to go into corporate business is a very sound decision indeed. To serve as a safety net to whatever drastic, unexpected budgetary cuts imposed by the Arroyo administration, this plan will surely cushion its impact on the academe, studentry and parents. in the meantime, SUCs will have to make do with whatever resources are available at hand. SUCs have to take off this CAVEAT, however. In the sourcing of funds and generation of income from projects and activities, SUCs must not shift the burden to the students. They should remain as affordable institutions of the higher learning, providing quality education while maximizing the utilixation of available human and natural resources for funds sourcing/ income generation. Although it remains to be seen, may the SUC corporation plan succeed as to produce

leader-managers who will transform the academe into center of excellence and development.

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He mentioned SUCs have to engage in business or income generating projects, the two conditions that had to be met so that the quality of education /instruction would not be sacrificed: First, the SUC was mandated to undertake a resource generating project that is compatible or consistent with its functions and area of strengthto go into an activity. That the SUC had developed an expertise in and has acquired some suitable assets to capitalize on utilized or commercialize, then it would be qualified to have an income generating project to that would utilize or commercialize such technology. Second, the SUC has been required to tap a private sector partner to take care of the business end so that the academic people of the SUCs could concentrate on their teaching chores and R &D. The SUC would just collect royalty or a reasonable return on their investment which could be funnelled back to the institution.

Towards financial sustainability as a SUC


Posted on March 19, 2011

Speech of Senator Ferdinand R. Marcos, Jr. Commencement Exercise of Laguna Polytechnic State University (LSPU) San Pablo City, Laguna 19 March 2011 Let me begin by first greeting your university officials led by President Ricardo A. Wagan, and the members of the Board of Regents, the distinguished faculty and staff of LSPU, family and friends and alumni, and of course, the graduating class of 2011. To the president, officials and academic faculty of LSPU, let me thank you and congratulate youfor inspiring and preparing our graduates for the world of work and for whatever noble pursuits they will choose to embrace. Considering that this institution is only four (4) years old as a State University, you certainly have accomplished so much for you to be proud of. To our dear graduates, families and friend, this day is a tribute to all of you. And your graduation rites should be an especially exciting day for you. For today marks your moving out day- from the sheltered walls of the academe; as well as your moving up day, another step up the ladder in your adult career. As you accept your diplomas today, I would like to take this opportunity to recognize the important role of public universities, especially LSPU, in transforming your lives, in preparing you to succeed to the next stages of your adulthood. I believe this years batch of graduates reflects the attributes of LSPU as a university. But will LSPU be able to sustain the capacity to produce quality graduates and its university-hood in the face of possible (or impending?) substantial reductions in government subsidy for higher education in the future? The answer is clearly a NO! Not without additional funds from non-government sources. How then can LSPU sustain or enhance its capability as a real university in face of the LSPU declining government subsidy? This is simply answered by LSPU generating its own resources for upgrading its facilities, faculty and academic programs, by engaging in production or income generating activities to raise the much needed funds. In 2004, CHED launched an initiative called- SUCS CORPORATIZATION PROJECT, precise to help SUCS become financially self-reliant. The commission identified 24 SUCS with the suitable assets and ready technologies that could be utilized for IGP, then provided some training, technical and funding support (ranging from

100,000 to 1.2 Million per SUC) to help them get started with their IGPS. In 2005, an additional P6 Million was released for the three most promising IGPS. Luckily your University the Laguna State Polytechnic University, formerly known as Laguna State Polytechnic College, was one of the fortunate recipients and was granted P1 Million for Production of Quality Tilapia Fingerlings In 2000; SUCS depended almost entirely on government subsidy for their operations, only 1.29% of their yearly budgetary needs were generated internally. By 2010, SUCs internally generated income soared and accounted for 24.6% of their total budgets. What can be gleaned from these successes in IGPs? From the experiences of the SUCs that have engaged in business or income generating projects, the two conditions that had to be met so that the quality of education /instruction would not be sacrificed: First, the SUC was mandated to undertake a resource generating project that is compatible or consistent with its functions and area of strengthto go into an activity. That the SUC had developed an expertise in and has acquired some suitable assets to capitalize on. If a SUC had been proven to be good at fisheries R & D and has developed a technology that could be utilized or commercialized to improve fisheries production, then it would be qualified to have an income generating project to that would utilize or commercialize such technology. Second, the SUC has been required to tap a private sector partner to take care of the business end so that the academic people of the SUCs could concentrate on their teaching chores and R &D. The SUC would just collect royalty or a reasonable return on their investment which could be funnelled back to the institution. Coming closer to home, in 2005-2006, A team of experts who visited and evaluated LSPU identified as among the universitys strengths Its close linkaging with industry (for OJT of students and employment placement of graduates) and The capability of its engineering and industrial technology departments to fabricate equipment. These identified strengths could then be the basis for identifying and conceptualizing potential areas for LSPUs future IPGs. Furthermore, in addition to aggressive resource generation, LSPU should review its programs to see if there are any that could be phased out or could be run more efficiently and more effectively. Savings from the phased out programs could be used to strengthen the more relevant and/or more market-responsive programs. At this point, ladies and gentlemen, let me reiterate: That in promoting SUCs resource generation, I do not mean to transform universities into business establishments or develop a commercial culture in the SUCs. I simply mean that universities should, work with industries more closely, combine theory with practice and contribute directly to economic development while at the same time enriching their programs with experiences learned from these partnerships and exposures to the private sector. In this process, I honestly believe that SUCs could be weaned from fiscal dependence on the national budget and rid themselves of bureaucratic fetters. After having read the historical rise of LSPU and its commitment to providing affordable and strong academic foundation for its students. I have become even more aware of its commitment to community service through extension programs and its practice of integrating your academic programs with these service opportunities. And the resulting outcome, I believe, are graduates who are practical idealists, like you, and that is precisely what the country needs today to help us

affect the needed reforms in our government and society, so as to accelerate the development and growth of our country and people! So my dear graduates, no matter what you plan to do with the diploma that you have earned and will now receive, I would like to take this single occasion of your graduation to enjoin all of you to find some way to give back a little-to your school and to the nation. In so doing you will not only help others, but will enrich your lives as well. The end result will be a stronger Philippines! And when you do, remember that you have a friend in the Senate! But for today, let us celebrate your success at LSPU and enjoy the moment! Good luck and God speed. Mabuhay kayong lahat! Mabuhay ang sambayanang Filipino!
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MANILA The Commission on Higher Education will encourage state universities and colleges to engage in income generating projects to augment their budget, as budget allocation for higher education was reduced last year, a government press release said. These are hard times all around and government is really tightening its belt. I understand why we cannot give a bigger budget to higher education, CHED Chairperson Dr. Patricia Licuanan said. We are undertaking a project where we will have an inventory of the assets of SUCs, then we will get experts to help them develop these assets so they can be a bit more economically sustainable institution, Licuanan said. She said that SUCs cannot rely anymore totally on government. In fact, some SUCs already have income-generating projects, and they are allowed to use this income for their own operation. Licuanan said that the CHED wants that the opportunity to go into IGPs are distributed, and not only limited to those that have entrepreneurial skills. She however, admitted that there is currently no definite system in place yet to monitor the funds, which may be misused by some SUCs so this will be the responsibility of the board of regents, the press release said.*
Wednesday, June 1, 2011

More biz schemes eyed for SUCs

posted on 04:38 PM, December 10, 2010 LORRAINE B. VILLEZA, Junior Researcher http://www.bworldonline.com

On SUC budget cut


The Aquino government has come under fire recently for proposing to slash the budgets of state colleges and universities (SUCs). This comes in light of its efforts to minimize its expenditures and channel its scarce resources towards priority projects that include basic education. The government plans to allocate some P23.4 billion to SUCs for 2011. In various interviews with print and TV media outlets, Budget Secretary Butch Abad explained that the proposal did

not include some P2.8 billion for maintenance and capital expenditures that were lumped in the 2010 budget through Congressional Initiatives (CIs), upon former President Gloria Arroyos conditional veto that the funds should not be released unless Congress enacted new revenuemeasures to support the expense. Hence, with no new revenue measures enacted, the actual budget for SUCs in 2010 is P21 billion, P2.4 billion higher than last years budget. The budget cut proposal underscores the issue of scarcity. Limited resources prompt the government to prioritize some socio economic objectives over others, and it ultimately reflects on its budget allocations. Of course, different sectors of society will find reason to disagree with these priorities and programs, especially if they see the distribution as inequitable. It is within this context that the new Aquino government proposes to channel resources from SUCs and towards basic education. Mr. Abad said that the move was intended to improve the quality of elementary and high-school education, which should in turn increase the number of students that get into college. According to government estimate, only 14 students go on to graduate from college for every 100 students who enter elementary. This suggests that the status quo is unsustainable. Mr. Abad said the government was looking into consolidating SUCs, because the country might have established too many SUCs. As a response, the government is pushing SUCs to become self-sustaining by tapping into their huge savings, or by pursuing income-generating partnerships with the private sector using their underutilized assets. The University of the Philippines, for one, leases out a portion of its land to Ayala Corporation for the UP-Ayala Technohub development. Cash-strapped SUCs could also turn to the Higher Education Development Fund, a continuing fund established under Republic Act 7722 using contributions from travel taxes, professional registration fees and lotto gross sales. The fund has approximately P750.8 billion budget. To be sure, however, some SUCs do not have the same privilege or luxury. The proposal has drawn much opposition from students, faculty members, and other lawmakers who believe that the allocation for SUCs is already inadequate as it is. National chairman of the League of Filipino Students (LFS) Terry Ridon said that removing these CIs could result in the further deterioration of SUCs. He was quoted as saying that that there should be an equitable distribution of government resources to both basic and tertiary education, citing that SUCs provide a viable alternative to expensive and "commercialized" private colleges. Protesters also believe that the main mandate of SUCs is to educate and train students, not to make money. They point to the critical role of the government in prioritizing education, as the time and effort utilized in raising funds can instead be channeled towards improving the state of education and producing good graduates. In addition, the Kilos Na Laban Sa Budget Cuts alliance questions why the government has decided to reduce the budget for SUCs even as it allots more for debt servicing and the pork barrel of lawmakers. Senate Minority Leader Alan Cayetano has proposed that the government tap some P66.9 billion in unprogrammed funds under the 2011 budget to augment the budget for SUCs. In an interview with news broadcast channel ANC, he suggested that funds devoted to conditional cash transfers be instead spent on basic social services such as higher education.

Furthermore, Kasangga party-list Rep. Teodoro Haresco said that the 2011 SUC budget could be augmented if the administration allots to SUCs at least 50% of the Asian Development Banks $400-million poverty loan. The government will likely have to reduce its spending on other priorities if it were to raise its budget for SUCs, unless it can draw other viable measures to raise revenue. The government also has the option to borrow, but doing so may have unpalatable effects on the governments future cashflow. The issue, then, becomes one of which trade-off the government and its constituents are willing to compromise over and ultimately accept. The Institute for Development and Econometric Analysis, Inc. (IDEA) is an economic think-tank based in the University of the Philippines - Diliman. For inquiries on IDEA, please contact Eduard Robleza at edjrobleza@idea.org.ph.
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Abad seeks understanding on budget cut for SUCs


By JC BELLO RUIZ November 27, 2010, 7:09pm MANILA, Philippines Amid the string of rallies of students protesting the budget cut on 110 state universities and colleges (SUCs), Budget and Management Secretary Florencio B. Abad begged on Saturday for understanding from affected government scholars, saying that with the governments ballooning fiscal deficit situation, the government could not increase funding for public tertiary schools. In a statement, Abad said the government has to prioritize funding for other pressing socioeconomic needs. If only our fiscal situation was better, we could provide additional support for SUCs. We ask for understanding that because our resources are lacking, we had to prioritize other more urgent needs, such as in basic education where more poor students will benefit from, Abad said. In an interview in Baguio City last Friday, President Aquino maintained that higher education is not being neglected by the national government. It is just that the national government is putting more importance on basic education, he said. Abad claimed that the proposed funding for SUCs of P23.407 billion for 2011 is not a reduction from this years funding level. While the 2010 budget allocates P23.845 billion for SUCs, p1.0 billion for maintenance expenditures and P1.8 billion for capital outlay are Congressional Initiatives (CIs). These CIs were subjected by the former president to a conditional veto that these cannot be released unless new revenue measures are enacted by Congress. These CIs were also not included in the 2011 proposed budget, together with other non-recurring expenditures, Abad said. The DBM chief also clarified that he is not pushing for tuition fee hikes for all SUCs. I did not say that. What I said was that SUCs should maximize the use of cash balances generated from tuition fees and revenue-generating projects and activities, that they are

authorized to retain. They could also pursue other income-generating partnerships using their underutilized assets, he said. Abad said SUCs should productively use their available funds. Right now, there is a total of P19.1 billion in cash balances by SUCs, or an average of P65.9 million per SUC, as of end 2009. Especially with our fiscal state, we want these SUCs to use their funds in productive ways, not just keep these in the bank, he said. "In addition, for 2011, the Higher Education Development Fund (HEDF) will have P750.8 million available to assist cash-strapped SUCs, he added. The HEDF a continuing fund established under Republic Act No. 7722 using contributions from the travel taxes, professional registration fees and lotto gross sales has a balance that amounts to P2.12 billion as of June 2010. Malacaang last Friday asked school officials to explain to students that they have enough funds and need not rely on national government funding. Presidential spokesperson Edwin Lacierda said SUCs need not depend on the national budget alone to finance their operations since they can also dispense whatever income they generate. http://www.mb.com.ph

GMA News - October 6, 2011] Angara to SUCs: Generate income to fill schools' budget gaps
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GMA News | October 6, 2011 by KIM TAN Senator Edgardo Angara on Thursday said state universities and colleges (SUCs) should generate income to fill schools' budget gaps due to insufficient government subsidy. "You've got to do your share to generate income. The government pie is not going to grow bigger," Angara, chairman of the Senate education committee, said during Thursday's hearing on the proposed budget of SUCs for 2012. Angara was president of the University of the Philippines (UP), a state university, from 1981 to 1987. Commission on Higher Education (CHED) chairman Dr. Patricia Licuanan earlier said SUCs have an approved budget of P26 billion for 2012, although their proposed budget was P39 billion. However, Angara said SUCs must not depend on the state subsidy or tuition to survive. "There is a limit on how much we can raise the tuition," he said. The senator said SUCs can utilize their land grants to generate income.

"Ang lalaki ng land holdings ng SUCs in the country, so that's one area," he said. "You must all learn how to generate funds from your land ownership--that's what lands grants are for, to raise extra money for operating expenses," Angara also said. Aside from this, he said SUCs can also try to attract foreign grants. However, Licuanan had also earlier said that they are already in negotiations with the Department of Budget and Management on how they can increase the budget for SUCs next year, which has been the call of several lawmakers and groups since the 2012 budget was proposed. UP's finances According to the financial statements of UP for the years 2008 and 2009 available on the website of the Commission on Audit, the state university earned, in both years, over P1 billion in income on top of the subsidy it got from the national government budget. Total Other Income" of UP in 2009 was P1.447 billion while in 2008 it was P1.475 billion. Significant chunks of that, 25 percent in 2008 and 30 percent in 2009, were hospital fees of the Philippine General Hospital. Tuition fees UP collected were P357.785 million in 2008 and P351.584 million IN 2009. UP earned interest income of P281.862 million in 2008 and P307.204 million in 2009 while income from grants and donations were P228 .165 million in 2008 and P63.845 million in 2009. Resource management In June 1997, Congress, through Republic Act 8292 or the Higher Education Modernizaton Act, empowered the governing boards of SUCs to generate and manage their economic resources. The SUCs were authorized to, among others: - receive in trust legacies, gifts and donations of real and personal properties of all kinds, to administer and dispose the same when necessary for the benefit of the university or college, subject to limitations, directions and instructions of the donors, if any; - enter into joint ventures with business and industry for the profitable development and management of the economic assets of the college or institution, the proceeds from which to be used for the development and strengthening of the college or university; and - develop consortia and other forms of linkages with local government units, institutions and agencies, both public and private, local and foreign, in furtherance of the purposes and objectives of the institution. - VVP/ELR, GMA News Source: http://www.gmanews.tv/story/234479/nation/angara-to-sucs-generate-income...