Pao 2018-02 Gastpe

Performance Audit Report
PAO-2018-02
GOVERNMENT ASSISTANCE TO
STUDENTS AND TEACHERS IN
PRIVATE EDUCATION (GASTPE)
DepEd Promoted Greater Choice for

Filipino Students Through the GASTPE
Program but it Needs to Strengthen its
Administrative Controls to Ensure
Economy, Efficiency and Effectiveness
of the Program Implementation
February 2019
Audit GOVERNMENT ASSISTANCE TO STUDENTS AND TEACHERS IN
Highlights PRIVATE EDUCATION (GASTPE)
DepEd Promoted Greater Choice for Filipino Students Through the

Why COA Did This Study GASTPE Program but it Needs to Strengthen its Administrative Controls
to Ensure Economy, Efficiency and Effectiveness of the Program
For FYs 2012-2017, the government Implementation
allocated approximately ₱86.00 billion
for the Government Assistance to What COA Found
Students and Teachers in Private
Education (GASTPE) Program. The DepEd focused more on student coverage and provided less attention to the
Department of Education (DepEd), Program’s effects and assessment of level of success of the Program. Based
through this Program, provides on 2012-2017 DepEd data, GASTPE provided assistance to 5,199,200 Junior
financial assistance to students and High Students, 1,915,886 Senior High Students and 128,853 Teachers. This
teachers in order to improve access to means that DepEd had hit more than 80 per cent of its student coverage target
quality education and decongest the for six years. According to DepEd, this is in pursuance of the State’s obligation
public schools. The Commission on to protect and promote the right of all citizens to quality education, whether
Audit (COA) has identified the education is availed in public or private basic education institutions. Further,
GASTPE program as one of the the DepEd also provided greater choice to the students by partnering with
schools, which offers diverse academic tracks. However, we observed that
priority programs that will be subjected
DepEd had limited data on the Program’s effects on decongestion of public
to performance audit apart from the
schools and does not have adequate and suitable performance indicators.
request of the Secretary of Education. While decongestion may not be the Program’s priority, it has been established
that the level of congestion greatly affects the provision of quality education.
This audit evaluated the economy Hence, it would be prudent to provide greater attention to Program’s effect on
efficiency, and effectiveness of the decongestion. DepEd admitted that it has limited performance indicators and
Program by looking at the following: committed to fine-tune the outcomes, outputs and targets of the Program.
(1) to what extent the Program
achieved its goals and objectives; (2) In promoting greater choice, DepEd grants subsidies even to students coming
to what extent DepEd ensured the from non-poor families. For Educational Service Contracting (ESC) scheme/
neediest were prioritized; and (3) to program, DepEd does not check whether or not the students are actually
what extent DepEd ensured proper underprivileged. Management argued that the law only used the term
administration of the Program. “preference”; hence, they are not obliged to ensure that only underprivileged
students receive the benefits. For Senior High School Voucher Program (SHS
In this audit, COA did the following: (1) VP), DepEd did not use its selection formula since the budget is more than
looked at DepEd data for SY 2012- enough. For the past six school years, DepEd paid approximately ₱4.76 billion
2013 to 2017-2018 and compared it (for Grade 7 alone) and ₱10.22 billion (for Grades 11 and 12) to ESC and SHS
with relevant laws, rules, and VP-participating schools, respectively. This means that about ₱14.98 billion
regulations; (2) interviewed DepEd were given to non-poor beneficiaries for SYs 2012-2017. Each student
officials; (3) conducted a survey with received the amount ranging from ₱5,000 to ₱22,500.
GASTPE beneficiaries and their
DepEd lacks the necessary mechanisms to ensure proper administration of the
parents as respondents; and (4)
GASTPE Program. The interim Project Management Office or GASTPE
conducted information system Composite Team, which is supposed to be in-charge of monitoring and
evaluation on the four information oversight, remains inoperative. As a result, DepEd heavily relies on the PEAC
systems of the GASTPE Program. in implementing the GASTPE Program. Currently, DepEd has delegated
important functions to PEAC.
What COA Recommends
GASTPE-related functions exercised by PEAC
COA recommends that DepEd: (1)
GASTPE Program Management
craft appropriate performance
indicators to determine the extent the ORIENTATION ESC CERTIFICATION
SHS VOUCHER
APPLICATION
Program improved access to quality
education and decongest the public PROCESSING OF
IN-SERVICE
BILLING MONITORING
schools; (2) ensure that the Program STATEMENTS
TRAINING
prioritizes the underprivileged; (3) REGULAR MEETINGS

immediately establish the GASTPE RESOLVING CASES AND
RESEARCH AND
OF SCHOOLS WITH CONSULTATIONS
Composite Team and, thereafter, a ADVERSE FINDINGS WITH
DATA GATHERING
STAKEHOLDERS
dedicated and functional office to
manage the Program; and (4) develop Source: PEAC, Available at https://peac.org.ph/aboutpeac/
its Information Systems Strategic Plan
in order to integrate all the relevant DepEd argues lack of funds and human resources but it has paid PEAC the
Information Technology (IT) systems, amount of ₱813.00 million for its services for SY 2012-2013 up to SY 2017-
including those purportedly owned by 2018. Furthermore, the audit team discovered during its regional visits that
even the DepEd Regional officials and employees hardly check the accuracy
PEAC.
of PEAC’s submissions. DepEd also relies on PEAC to identify the duplicates
in its database. As evidenced by its lack of an ISSP, DepEd is not in full control
of its IT systems.
Government Assistance to Students and Teachers in Private Education
Contents
Letter 1
Background 3
DepEd has number of grantees, participation and
completion data, but does not have adequate and
suitable performance indicators to assess the level
of success of the Program 6
GASTPE is not designed to prioritize coverage of
underprivileged students 33
DepEd lacks the necessary mechanisms to ensure
proper administration of the GASTPE program 45
Persisting issues on the juridical personality of PEAC
threaten the continuity of the GASTPE program 60
Conclusions 70
Recommendations 72
Agency Comments 74
Appendix I Objectives, Scope and Methodology 75
Appendix II Educational Service Contracting (ESC) Scheme/

Program 77
Appendix III Senior High School Voucher Program (SHS VP) 81
Appendix IV Survey Result 90
Appendix V Relevant Tables 96
Appendix VI COA Contact and Staff Acknowledgements 101
Tables Table 1 DepEd Appropriation and GASTPE

Program Allocation 5
Table 2 Performance Indicators for MFO of
Regulatory and Developmental Services
for Private Schools per GAA and Number
of Grantees per PRO 7
Table 3 Number of Students Enrolled in JHS 9
Table 4 Number of ESC Grantees per Grade Level
vis-à-vis Public JHS Population 9
Table 5 Distribution of ESC Grade 7 Grantees vis-
à-vis Grade 7 in Public JHS 9
Table 6 Target Number of Grantees and the
Corresponding Budget 11
Table 7 Slot Allocation Policies in the Early Years of
ESC Scheme/ Program 12
Page i PAO-2018-02
Contents
Table 8 Schedule of Slot Allocation 13

Table 9 Target and Actual – Number of ESC
Grantees 16
Table 10 Number of ESC Grantees from SYs 2012-
2013 to 2017-2018 19
Table 11 Promotion and Completion Rate of ESC
Grantees 19
Table 12 Participation Rates of Private JHS in ESC
Scheme/ Program for SYs 2012-2013 to
2017-2018 20
Table 13 Number of Students Enrolled in SHS 21
Table 14 Target vs. Actual– Number of VPBs 21
Table 15 SHS VP Participation Rate of Grade 10
Enrollees by Region 23
Table 16 SHS VP Participation Rate of Public and
Private JHS Grade 10 Completers 24
Table 17 VPBs Retention Rates by Region 26
Table 18 VPBs Retention Rate by Student Type 27
Table 19 Total Number of SHSs 27
Table 20 Actual Number of TSS Recipients and the
Corresponding Amount Paid Annually
for SYs 2012-2013 to 2017-2018 33
Table 21 Voucher Applicants and Successful QVRs 38
Table 22 Respondents Awareness Rate on the SHS
VP 41
Table 23 Reasons Provided by Respondents from
Public SHS Students who apply/did not
apply for the SHS VP 42
Table 24 Scholarship Policies and Practices in
Application of Grants/ Subsidies and
Scholarship Benefits 44
Table 25 SHS VP - Participating Schools Monitored
by PEAC against Target and Number of
SHS Providers and with Adverse
Findings 47
Table 26 Fund Releases by DepEd to PEAC 48
Table 27 Schedule of Payment to PEAC for
Administrative Function 48
Table 28 Details of Fund Releases by DepEd to
PEAC 49
Table 29 Applications Developed by BEST and
PEAC 54
Table 30 Amount of ESC Grants 80
Page ii PAO-2018-02
Contents
Table 31 Distribution of ESC Slots to Public

Elementary School Graduates from
Schools Visited 96
Table 32 Enrolment of JHS 97
Table 33 Percentage Share of Enrolment in Public
JHSs and of ESC Slot Allocation and the
Ranking, ESC-Participating Schools and
Participation Rate of Private Schools, by
Region 98
Table 34 Subsidy Ratio 99
Table 35 Interview Result: TSS Recipients in the
Selected Audit Areas 100
Figures Figure 1 GASTPE Program 4

Figure 2 ESC Grantees vis-à-vis Public JHS
Population, per Grade Level 10
Figure 3 Target and Actual Number of ESC
Grantees 16
Figure 4 Target and Actual Number, and Annual
Growth Rate of SHS VPBs 22
Figure 5 SHS Population and VPBs 22
Figure 6 SHS VP Participation Rate of Grade 11
Enrollees 23
Figure 7 Public JHS Students Transition to SHS 24
Figure 8 Private ESC JHS Students Transition to
SHS 25
Figure 9 Private Non-ESC JHS Students Transition
to SHS 25
Figure 10 Distribution of SHS VP VPBs for SYs 2016-
2017 and 2017-2018 37
Figure 11 VPBs in SHS VP-Participating Schools with
Total School Fees Above ₱100,000 39
Figure 12 Grade 11 VPBs for SY 2016-2017 vis-à-vis
Grade 12 VPBs for SY 2017-2018 43
Figure 13 ESC Scheme/ Program Objectives 78
Figure 14 Reasons for Termination from ESC
Scheme/ Program 78
Figure 15 SHS VP Objectives 82
Figure 16 SHS VP QVRs 83
Figure 17 SHS VP Voucher Application Process per
Student Category 85
Figure 18 Maximum Applicable Voucher Amount per
Student per School Year 87
Figure 19 Reasons for Disqualification from SHS VP 89
Page iii PAO-2018-02

Contents
Figure 20 Results of Survey – ESC Scheme/ Program

- Private School 91
Figure 21 Results of Survey – ESC Scheme/ Program
- Public School 92
Figure 22 Results of Survey – SHS VP - Private
School 93
Figure 23 Results of Survey – SHS VP - Public 94
School
Page iv PAO-2018-02
Abbreviations
ARMM Autonomous Region of Muslim Mindanao

A&E Accreditation and Equivalency
BEST Basic Education Sector Transformation
CAAR Consolidated Annual Audit Report
CALABARZON Cavite-Laguna-Batangas-Rizal-Quezon
CAR Cordillera Administrative Region
COA Commission on Audit
CY Calendar Year
DepEd Department of Education
DepEd DO Department of Education - Division Office
DepEd RO Department of Education - Regional Office
DO Department Order
DOJ Department of Justice
E-GASTPE Expanded Government Assistance to
Students and Teachers in Private Education
EO Executive Order
ESC Educational Service Contracting
FAPE Fund for Assistance to Private Education
FY Fiscal Year
GAA General Appropriations Act
GASTPE Government Assistance to Students and
Teachers in Private Education
GS Government Subsidy
HEI Higher Education Institutions
HUC Highly Urbanized Cities
ICTS Information and Communication Technology
Service
ID Identification
IMS Information Management System
INSET In-Service Training
ISSAI International Standards of Supreme Audit
Institutions
ISSP Information Systems Strategic Plan
IT Information Technology
JHS Junior High School
LET Licensure Exam for Teachers
LIS Learner Information System
LRN Learner Reference Number
LUC Local Universities and Colleges
MFO Major Final Output
MOA Memorandum of Agreement
NAT National Achievement Test
NCR National Capital Region
NEDA National Economic and Development
Authority
Page v PAO-2018-02
Abbreviations
OPIF Organizational Performance Indicator

Framework
OVAP Online Voucher Application Portal
PEAC Private Education Assistance Committee
PHILCONSA Philippine Constitution Association
PMO Project Management Office
PSA Philippine Statistics Authority
QVR Qualified Voucher Recipients
RA Republic Act
RPCom Regional Program Committee
SHS Senior High School
SHS VP Senior High School Voucher Program
SUC State Universities and Colleges
SY School Year
TSS Teachers’ Salary Subsidy
TVI Technical-Vocational Institutions
TVL Technical-Vocational-Livelihood
VMS Voucher Management System
VPB Voucher Program Beneficiaries
Page vi PAO-2018-02
Republic of the Philippines

COMMISSION ON AUDIT
Commonwealth Avenue
Quezon City
February 21, 2019
SECRETARY LEONOR MAGTOLIS BRIONES

Department of Education
Pasig City
Dear Secretary Briones:
In line with its vision to become an enabling partner of the

government in ensuring a better life for every Filipino, the
Commission on Audit (COA) conducted performance audits to
help government agencies better perform their mandates and
achieve program goals and objectives more economically,
efficiently and effectively. It has identified the Government
Assistance to Students and Teachers in Private Education
(GASTPE) Program as one of the priority programs to be
audited. In addition, the Secretary, Department of Education
(DepEd) had requested on March 27, 2017 for a special audit
of the Fund for Assistance to Private Education (FAPE) and the
management of the GASTPE by the Private Education
Assistance Committee (PEAC). The audit aimed to determine:
(1) the extent the GASTPE program has achieved its goals and
objectives; (2) the extent the DepEd ensured the neediest were
prioritized to receive the benefits; and (3) the extent the DepEd
ensured proper administration of the Program.
Pursuant to Republic Act (RA) Nos. 6728, 8545 and 10533, the
DepEd, through the GASTPE program, provides financial
assistance to students and teachers in order to improve access
to quality education and decongest the public schools. For fiscal
years (FYs) 2012-2017, the government allocated
approximately ₱86.00 billion for this Program and assisted more
than 80% of the target grantees.
The audit focused on the three components of the Program: 1)

Educational Service Contracting (ESC) scheme/ program, 2)
Teachers’ Salary Subsidy (TSS) and 3) Senior High
School Voucher Program (SHS VP). The audit covered program
Page 1 PAO-2018-02
implementation from SY 2012-2013 to SY 2017-2018. We

reviewed program documentation, applicable laws, rules and
regulations, reports and related materials. We also interviewed
the key agency officials, personnel and stakeholders. To
validate the information gathered, we conducted survey
involving beneficiaries of the Program. Likewise, we evaluated
the ESC - Information Management System (ESC-IMS),
Voucher Management System (VMS) and DepEd related
information systems to determine database integrity, security,
and input controls.
We conducted our performance audit from May to August 2018

in accordance with the International Standards of Supreme
Audit Institutions (ISSAI) 3000 – Standard for Performance
Auditing. The standard requires that we plan and perform the
audit to obtain sufficient, appropriate evidence to provide a
reasonable basis for our findings and conclusions based on our
audit objectives. We believe that the evidence obtained
provides a reasonable basis for our findings and conclusions.
Page 2 PAO-2018-02
It is a declared policy of the State to promote and make quality

Background
education available to all Filipino citizens. The state also
recognizes the complimentary roles of public and private
schools in education system, especially the latter’s invaluable
contribution to education.1
Government assistance to students and teachers in private

education was established in 1989 with the passage of RA No.
6728 otherwise known as GASTPE Act. The GASTPE Act
provides assistance to private education, including the
expansion of the existing ESC scheme/ program.2
The ESC is an arrangement whereby the DepEd enters into

contracts with private schools to shoulder the tuition and other
fees of excess students in public high schools who shall enroll
under this program. This arrangement also covers communities
where there are no public high schools.3
In 1998, the GASTPE Act was amended by RA No. 8545 or the

Expanded GASTPE (E-GASTPE) Act to provide additional
assistance to teachers and faculty in private education in the
form of the in-service training (INSET) fund for teachers in
private high schools and the TSS Fund.4
The TSS is a DepEd program where an annual subsidy is

provided to qualified teachers in ESC-participating schools. The
subsidy is given to teachers as an incentive to stay in the ESC-
participating school. The TSS aims to improve the quality of
junior high schools (JHSs).
With the passage of RA No. 10533 or the Enhanced Basic

Education Act in 2013, the Legislature further expanded the
GASTPE program to include Grades 11 and 12. This expansion
came to be known as the Senior High School Voucher Program
(SHS VP). Under this amendment, subsidy shall be given by the
State to qualified Grade 10 completers to enable them to enroll
in a non-DepEd Senior High School (SHS) of their choice. The
assistance helps to defray the cost of tuition and all other
published fees charged by a non-DepEd SHS. The subsidy is
1
An Act Providing Government Assistance to Students and Teachers in Private
Education, and Appropriating Funds Therefor [Government Assistance To Students and
Teachers In Private Education Act], Republic Act No. 6728, § 2 (1989).
2
Ibid. § 4 (3).
3
Ibid. § 7 (a) & (b).
4
An Act Amending Republic Act No. 6728, Otherwise Known As “An Act Providing
Government Assistance to Students and Teachers in Private Education, and
Appropriating Funds Therefor,” Establishing a Fund for the Purpose of Subsidizing
Salaries of Private School Teachers, and Appropriating Funds Therefor [Expanded
Government Assistance to Students and Teachers in Private Education Act], Republic
Act No. 8545, §§ 4(1) & 14 (1998).
Page 3 PAO-2018-02
not given to the student as cash; DepEd instead pays directly to

the non-DepEd SHS where the student enrolls.
The DepEd through SHS VP aimed to enable 30 to 40 per cent

of its students in public high schools to enroll in non-DepEd
schools which offers SHS, including private JHSs, private
Higher Education Institutions (HEIs), state and local universities
and colleges, and Technical-Vocational Institutions (TVIs). The
public-private partnership would serve to decongest public
schools, reduce or delay the need to construct DepEd SHS
facilities and hire government teachers, and provide less
affluent students more options for SHS education.5
Currently, the GASTPE program includes the following

components: (a) ESC, (b) TSS, (c) SHS VP, (d) INSET and (e)
Research Program. (Appendices II to III for the detailed
discussion of the Programs).
Figure 1: GASTPE Program
ESC TSS SHSVP INSET Research
GASTPE Program
Source: COA Analysis of DepEd orders
Based on the General Appropriations Act (GAA) for FYs 2012

to 2017, the Legislature has allocated a total amount of
₱86,003,039,000 to GASTPE. The allocation6 comprised 2.61
per cent to 6.59 per cent of DepEd’s entire appropriations
(Table 1).
5
DepEd, Department Order No. 11, Series of 2015 [DO No. 11, s. 2015], § 3, p. 1 (April
10, 2015).
6
GAA for FYs 2012-2017.
Page 4 PAO-2018-02
Table 1: DepEd Appropriation and GASTPE Program

Allocation
DepEd GASTPE
Percentage
Year Appropriation Allocation
(c=b/a)
(a) (b)
2012 ₱ 201,497,405,000 ₱ 6,286,387,000 3.12%
2013 231,437,428,000 6,973,723,000 3.01%
2014 280,702,764,000 7,447,470,000 2.65%
2015 319,230,973,000 8,337,273,000 2.61%
2016 410,381,976,000 21,189,043,000 5.16%
2017 543,185,614,000 35,769,143,000 6.59%
Total ₱1,986,436,160,000 ₱86,003,039,000 4.33%
Source: COA Analysis of DepEd data
The GASTPE program aims to improve quality in private

education by maximizing the use of existing resources of private
education, recognizing in the process the government
responsibility to provide basic elementary and secondary
education as having priority over its function to provide for
higher education.7 To implement the Program, DepEd
contracted PEAC as its service provider for the implementation
and monitoring of the ESC, TSS and SHS VP nationwide. PEAC
is responsible for the conduct of orientation conference,
continuous certification of ESC-participating schools,
evaluation, processing of billings of schools, submission of
billings to DepEd for processing of payments, and monitoring of
beneficiaries of the ESC, TSS and SHS VP and its participating
schools.
In addition, PEAC is responsible for the conduct of field audits

of participating schools, reporting of violations of Program
policies and guidelines, maintaining a database for
beneficiaries and participating schools, formulation,
management, and conduct of teacher and administrator
training, and propose and conduct research and evaluation
studies on the ESC, TSS, SHS VP schemes and INSET
programs.8
DepEd, as the institutional owner and regulator of the ESC,

TSS, and SHS VP, is responsible for organizing the Regional
Program Committees (RPComs) to oversee compliance of
participating public and private schools in their regions with the
policies and guidelines of the GASTPE programs of assistance.
7
Government Assistance to Students and Teachers in Private Education Act, § 2.
8
MOAs between DepEd and PEAC for SYs 2012-2013 to 2017-2018.
Page 5 PAO-2018-02
DepEd has number

of grantees,
participation and
completion data,
but does not have
adequate and
suitable
performance
indicators to
assess the level of
success of the
Program
DepEd focused more on student coverage and provided

less attention to the Program’s effects and assessment of
level of success of the Program. Based on 2012-2017
DepEd data, GASTPE provided assistance to 5,199,200
Junior High Students, 1,915,886 Senior High Students and
128,853 Teachers; though it still fell short of the targets. In
addition, DepEd had limited information on the extent the
Program decongested the public schools and does not
have adequate and suitable performance indicators. Due to
the lack of data, it is difficult to attribute any education-
related outcome or trend to the Program.
DepEd does not The existing performance indicators for the GASTPE program
have adequate and are inadequate and unsuitable to assess its level of success.
suitable Pursuant to the GAA, under the Major Final Output (MFO) of
performance Regulatory and Developmental Services for Private Schools,
GASTPE performance indicators include numbers of grantees,
indicators to assess
percentage increase of grantees who scored average or better
the level of success in the National Achievement Test (NAT) and ratio of completers
of the Program to grantees. However, upon validation, we found that DepEd’s
Physical Report of Operations (PRO) only contain information
on the number of grantees, which is incomplete and
inconsistent with the GAA. While the data on the number of
grantees provide context about the Program’s size and reach,
these outputs are not measures of effectiveness of the
Program. Failure on the part of DepEd to include, in the PRO,
information relevant to the performance indicators identified in
the GAA would deny the Department of Budget and
Management (DBM) and other stakeholders, accurate
information, which would be vital in making decisions especially,
during budget deliberations.
Page 6 PAO-2018-02
In addition, the numbers of grantees and ratio of completers to

grantees are merely measures of outputs, which is only a
fraction of what an agency should be looking at in evaluating
the effectiveness of a program. According to the World Bank’s
Performance Monitoring Indicators Handbook, “performance
indicators are measures of project impacts, outcome, outputs,
and inputs that are monitored during project implementation to
assess progress towards attainment of project objectives.”9
Based on this, even the performance indicators identified in the
GAA are inadequate to properly monitor the attainment of
project objectives. Other than outputs, DepEd should also be
looking at outcome and project impacts.
Table 2 presents the performance indicators identified in the

GAA and PRO, and its corresponding targets from FYs 2012 to
2017.
Table 2: Performance Indicators for MFO of Regulatory and

Developmental Services for Private Schools per GAA and
Number of Grantees per PRO
Physical
General Appropriations Act10 Report of
Operation11
% Increase of
Fiscal Year
Grantees who Ratio of
Number of Number of
Scored Completers
Grantees Grantees
Average or to Grantees
Better in NAT
2012 Not available Not available Not available Not available
2013 Not available Not available Not available 1,000,000
2014 1,044,899 2% 80% 995,000
2015 1,083,396 2% 82% 999,000
2016 1,808,554 3% 84% 1,824,584
2017 2,664,611 6% 86% 2,664,611
Source: GAA and Physical Report of Operations for FYs 2012-2017
As seen above, the only available data is the number of

grantees covered by the Program annually. If the DepEd would
be able to supply data on the second performance indicator,
which is “% Increase of Grantees who Scored Average Better
in NAT”, the stakeholders would have, at least, an indication of
the level of quality of the education in the Philippines. However,
even if DepEd supplies this information, this alone will be
insufficient to attribute any impact to the GASTPE program. This
is the reason why apart from gathering information relevant to
9
The International Bank for Reconstruction and Development/ The World Bank, World
Bank Technical Paper No. 334, Performance Monitoring Indicators Handbook, p. 1
(1996).
10
11
DepEd, Physical Report of Operations for CYs 2012-2017.
Page 7 PAO-2018-02
the other two performance indicators, DepEd needs to add new

indicators and/or refine the existing ones.
To ensure consistency, accuracy, relevance and usefulness of

data collected for monitoring and evaluation, the indicators must
have the SMART attributes:
a. Specific – focused and clear

b. Measurable – quantifiable and reflecting change
c. Attainable – reasonable in scope and achievable
within set time-frame
d. Relevant – pertinent to the review of performance
e. Time-bound/ Trackable – progress can be charted
chronologically.
DepEd acknowledged that performance indicators confined to

number of beneficiaries and related indicators may not be
sufficient for broader performance monitoring and evaluation,
but it does not mean that there are no other parameters by
which they evaluate the Program. They used to follow the
Organizational Performance Indicator Framework (OPIF) but in
2016, they needed to adjust to align with the Program
Expenditure Classification (PREXC). It was pointed out that
they are now currently reviewing and fine-tuning the outcomes,
outputs and targets of the Program in conjunction with the
review and fine-tuning of Program goals and objectives.
ESC Scheme/ Program
Congestion has DepEd has targeted about a million ESC grantees annually for
been slightly the past six years (Table 6). For the same school years,
relieved through enrolments in public JHSs have been constantly increasing
ESC scheme/ (Table 3) from 5.6 million in SY 2012-2013 to
program although 6.4 million in SY 2017-2018. This implies that public JHS will be
congested in the absence of new classrooms. However, even
the extent of this
based on this data, we cannot still say whether the program
relief was neither made an impact since the trend seems to remain steady. It does
measured nor not show significant student migration from public JHS to private
assessed JHS since only a small portion of the total JHS population is
being given ESC slots every year which might not be sufficient
to decongest the public JHSs (Figure 2). Moreover, significant
percentage of ESC grantees were students from private
elementary schools which lessen the program’s impact.
Page 8 PAO-2018-02
Table 3: Number of Students Enrolled in JHS
SUCs/
School Public JHS Private JHS Total
LUCs
Year (a) (b) (d=a+b+c)
(c)
2012-2013 5,641,898 1,421,081 60,699 7,123,678
2013-2014 5,772,578 1,397,941 45,382 7,215,901
2014-2015 5,928,042 1,353,320 35,389 7,316,751
2015-2016 6,012,761 1,337,386 43,903 7,394,050
2016-2017 6,177,876 1,341,159 45,792 7,564,827
2017-2018 6,412,233 1,365,684 48,497 7,826,414
Source: DepEd, Q & A FY 2018 Basic Education Statistics, p. 24
It was notable that the percentage of ESC grantees to total

student population in public JHS has increased from 12.86 per
cent in SY 2012-2013 to 15.2 per cent in SY 2017-2018 or an
average of 14.43 per cent (Table 4). However, the percentage
of ESC Grade 7 grantees from public elementary schools to
Grade 7 public JHS population for the past five school years
remained at around 10 to 11 per cent or an average of 10.47
per cent (Table 5).
Table 4: Number of ESC Grantees per Grade Level vis-à-vis Public JHS Population
Public
Grade 7 Grade 8 Grade 9 Grade 10 Total JHS Percentage
School Year
(a) (b) (c) (d) (e=a+b+c+d) Population (g=e/f)
(f)
2012-2013 251,375 173,438 163,798 136,827 725,438 5,641,898 12.86%
2013-2014 257,754 227,007 159,068 154,695 798,524 5,772,578 13.83%
2014-2015 264,769 233,215 207,004 150,922 855,910 5,928,042 14.44%
2015-2016 267,523 239,107 212,109 192,067 910,806 6,012,761 15.15%
2016-2017 278,761 242,134 216,907 195,926 933,728 6,177,876 15.11%
2017-2018 293,731 254,769 223,369 202,925 974,794 6,412,233 15.20%
Average 866,533 5,990,898 14.43%
Table 5: Distribution of ESC Grade 7 Grantees vis-à-vis Grade 7 in Public JHS

Public Private
No. of
Elementary Elementary
Uncategorised Total Percentage Grade 7 in Percentage
School Year School School
(c) (d=a+b+c) (e=a/d) Public JHS (g=a/f)
Grantee Grantee
(f)
(a) (b)
2012-2013 185,430 65,941 4 251,375 73.77% Not available -
2013-2014 184,315 73,437 2 257,754 71.51% 1,674,201 11.01%
2014-2015 182,998 81,771 0 264,769 69.12% 1,687,500 10.84%
2015-2016 178,186 89,305 8 267,499 66.61% 1,713,333 10.40%
2016-2017 180,469 97,364 928 278,761 64.74% 1,782,780 10.12%
2017-2018 187,369 106,196 211 293,776 63.78% 1,862,178 10.06%
Total 1,098,767 514,014 1,153 1,613,934 68.08% 8,719,992 10.47%
The objective of ESC scheme/ program to decongest public

JHS may not be achieved with the share of the grantees from
Page 9 PAO-2018-02
public elementary schools in the number of ESC grantees

constantly decreasing from 73.8 per cent in SY 2012-2013 to
63.8 per cent in SY 2017-2018. As can be seen in Figure 2, only
a small portion of the total JHS population is being given ESC
slots every year which might not be sufficient to decongest the
public JHSs. On the other hand, the number of grantees from
private elementary schools increased from 65,941 to 106,196 in
the past six years.
Figure 2: ESC Grantees vis-à-vis Public JHS Population, per Grade Level
6,000,000
Number of Students
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
-
2013-2014 2014-2015 2015-2016 2016-2017 2017-2018
School Year
Grade 7 in Public JHS Grade 8 in Public JHS
Grade 9 in Public JHS Grade 10 in Public JHS
Grade 7 ESC Grantees from Public Elementary School Grade 7 ESC Grantees from Private Elementary School
Grade 8 ESC Grantees Grade 9 ESC Grantees
Grade 10 ESC Grantees
Based on the SY 2017-2018 data obtained from the schools

visited, our analysis also disclosed that only 10 of 42 or 24 per
cent of the schools have given substantially all, i.e. more than
90 per cent, of its ESC slots to public elementary schools
graduates. Moreover, at division and regional levels, less than
50 per cent of the Grade 7 ESC grantees in National Capital
Region (NCR) came from public elementary schools, and
around 53 per cent to 98 per cent for Cavite-Laguna-Batangas-
Rizal-Quezon (CALABARZON), Central Visayas, and Northern
Mindanao (Table 31).
The budget constraint limits the number of ESC slots annually

and may not totally decongest public JHS. As the target
decongestion level was not defined/established, any
decongestion level achieved by the ESC scheme/ program may
not be measured nor assessed.
Page 10 PAO-2018-02
Table 6: Target Number of Grantees and the Corresponding

Budget
Target Number of
Year AllotmentA
Grantees
2012 Not available ₱6,286,387,000B
2013 1,000,000 6,973,723,000B
2014 995,000 7,447,070,000
2015 999,000 8,337,273,000
2016 1,099,671 9,005,642,000
2017 1,040,148 9,455,566,000
A
Inclusive of budget for TSS
B
Inclusive of budget for Education Voucher System (EVS) – another program of DepEd launched
in March 2006 and was phased out in SY 2014-2015
Source: Physical Report of Operations and Statement of Appropriations, Allotments, Obligations and
Balances for FYs 2012-2017
DepEd pointed out that decongestion of public schools is not

the sole and primordial goal of the Program. However, by
providing partial subsidy to public school students who have
willingness and capacity to study in the private schools, the
government is able to provide a more conducive learning
environment and quality education for those who are left in the
public schools.12 The Management explained that DepEd has
other programs such as the school building construction
program which primarily and directly addresses the concern of
congestion in public schools and continuous improvement of
classroom-to-student ratio and teacher-to-student ratio.
Current allocation Slot allocations represent the maximum number of grantees

of ESC slots is not ESC-participating JHSs can accept in Grade 7 in the coming
based on the school year.13 The slot allocation policies of the program are
pattern of summarized in Table 7. In the early years of the ESC scheme/
program implementation, DepEd and PEAC explicitly tracked
congestion in public
the relationship between the congested public school and the
schools nearby private school with excess capacity to determine the slot
allocation to the ESC-participating schools in line with the
provision in the GAA of streamlining the implementation of the
ESC to graduates of elementary schools from areas where
there are congested public secondary schools.14
12
Civil Society Network for Education Reforms, Education Service Contracting in the
Philippines: Assessing Public-Private Partnership in Education from the Perspective of
the Marginalized Sectors, 32 (2012).
13
DepEd, Department Order No. 20, Series of 2017 [DO No. 20, s. 2017], § VII.B, p. 5
(April 20, 2017).
14
Page 11 PAO-2018-02
Table 7: Slot Allocation Policies in the Early Years of ESC

Scheme/ Program15
School Year Slot Allocation Description

1992-1993 to Overflow from Students enrolled after the school quota as
1997-1998 Public High determined by the Regional Director has
Schools been filled, are considered excess or
overflow. Overflow students are advised to
enroll in a duly recognized private ESC-
participating school of his/her choice in the
area of his/her residence.
1998-1999 to Regional Quota Allocating new entrants to the existing
1999-2000 System participating schools which will be
determined by the Regional Director based
on the capability of the school in terms of
physical facilities, number of teachers, etc.
2000-2001 to Replacement of Maintain the same number of total grantees
2003-2004 Graduates, by recruiting first year grantees to replace
Dropouts, graduates, dropouts and transferees of the
Transfer-out previous year. Schools with no 4th year
grantees or less than 30 grantees are
allowed a maximum of 30 slots.
2004-2005 to DepEd Priority Number of first year slots shall be equal to
2006-2007 Areas/ Certification the number of fourth year graduates of the
Results previous year but in no case shall be less
than 50 slots. No replacement of dropouts or
transferees. Applicant schools shall be
entitled to a minimum of 50 first year slots.
Grant of additional slots shall be based on a
formula that factor in a) DepEd priority areas
b) Institution of School First Initiative
reforms, and c) ESC certification results.
2007-2008 to Regional Quota Incoming first year ESC slots shall be equal
2011-2012 System to the number of first year grantees in
previous year but not less than 50 slots. Fifty
freshman slots shall be allocated to new
participating schools. Granting of additional
slots vary in the respective DOs for these
school years.
Currently, slot allocations are based on the capacity of schools

to accommodate grantees (fixed slots), with more slots awarded
for demonstrated quality (incentive slots). For school years
(SYs) 2012-2013 to 2017-2018, the slot allocation schedule is
summarized in Table 8.
15
DepEd, DOs from SYs 1992-1993 to 2011-2012.
Page 12 PAO-2018-02
Table 8: Schedule of Slot Allocation16
Fixed Slot Allocation Additional/ Incentive Slot Allocation*

ESC
School Newly Currently Certification
Level I Level II
Year Participating Participating Rating of
Accreditation Accreditation
Schools Schools17 3.00 or
higher
2012- - No. of First
Based on the approved distribution of additional
2013 Year
slot allocations by the RPCom per division and
grantees of
to ESC-participating schools on the basis of
the previous
need.
SY
2013- - No. of First 15 - 30
2014 Year
grantees of
the previous
SY
2014- 50 No. of Grade 15 - 30
2015 7 grantees of
the previous
SY
2015- 50 No. of Grade 15 30 60
2016 7 grantees of
the previous
SY
2016- 50 No. of Grade 30 30 60
2017 7 grantees of
the previous
SY or 50
slots,
whichever is
higher
2017- 50 No. of Grade 30 30 60
2018 7 grantees of
the previous
SY
*Except for SY 2017-2018, additional slots depend on approved GASTPE budget for school year
and allocated based on incidence of shortage or congestion in public secondary schools in
municipality where it is located and the participating school’s rating.
In SY 2017-2018, the allocation of additional/ incentive slot is

purely performance-based. While in SYs 2012-2013 to 2016-
2017, the allocation of additional slots does not only consider
the performance of the ESC-participating schools but also the
data on incidence of shortage and congestion in public
secondary schools.18
Furthermore, the ESC slot allocation has also been directly

proportional to the enrolment in public JHS, i.e., high slot
allocation was given to region with high number of enrolment
and low slot allocation for region with low number of enrolment.
Appendix V: Table 33 shows the percentage share of enrolment
in public JHS and of ESC slot allocation by region and their
respective ranking.
16
17
Participating school shall be in good standing and has demonstrated its capacity to
utilize the slots allocated. A school is considered in good standing when all of the
following are met: (1) passed the latest recertification, (2) no adverse findings in last
monitoring visit and (3) no sanctions or penalties.
18
COA analysis of various DepEd DOs.
Page 13 PAO-2018-02
But still, the current allocation of ESC slots is not based on the
pattern of congestion in public schools. There may be areas in
which an ESC-participating private school is located close to at
least one public school with excess students. Nor have the
DepEd regional offices, cities/municipalities and/or school
divisions been tracking the excess capacity in private schools
and the number of excess/ overflow/ “aisle” students in
congested public schools. Instead, over recent years, PEAC is
responsible for monitoring the allocation of ESC slots. The
allocation of ESC slots is supposed to be guided by the data on
incidence of shortage and congestion in public secondary
schools by region, city/ municipalities and/or school divisions.
Unfortunately, there is no algorithmic procedure that DepEd and
PEAC could use to link these data to the ESC slots allocation,
and certainly no formula to guide DepEd and PEAC in assigning
slots to specific private schools.19 Accordingly, the current
practice of allocating ESC slots might not be effective in
addressing the congestion in public JHSs.
As discussed earlier, it has been the practice of DepEd to track

the congested public JHS and the nearby private JHS with
excess capacity. However, we were informed that this practice
was discontinued due to inadequate planning and data
management. In its recent issuances, DepEd made mention of
the consideration of incidence of shortage or congestion in the
allocation of additional slots. Interview with DepEd personnel
disclosed that congestion was not actually considered in the
annual projection of ESC slots as there were no available
reports of actual secondary school classroom shortages and
congestion in public secondary schools. In addition, prior year
reports on classroom shortages and congestion were not turned
over by the previous personnel handling these until they left
DepEd and also the back-up files in the hard drive were
corrupted.20
The slot allocation posted in the school’s ESC IMS accounts is

considered final21 and requests for more slots shall not be
entertained given that total slot allocations for each participating
school has been predetermined.22 However, during our
interview with school principals, we noted that there were
requests made for additional ESC slots to PEAC ranging from
20 to 110 slots and half of the schools visited with requested
additional slots were approved. As such, the granting of these
19
The International Bank for Reconstruction and Development / The World Bank,
Philippines Private Provision, Public Purpose – A Review of the Government’s
Education Service Contracting Program, 27 (2011).
20
Interview with DepEd personnel in DepEd Central Office, Pasig City.
21
DO No. 20, s. 2017, § VII (B) (3), p. 6.
22
Page 14 PAO-2018-02
requests for additional slots were not based on the incidence of

shortage or congestion in public secondary schools and on
schools’ ESC certification ratings.
DepEd acknowledged the gaps in the current ESC slots

allocation and assured that the basis on the current slot
allocation shall be revisited and modified, if necessary.
DepEd has DepEd has been successful in assisting ESC grantees during
assisted more than their JHS education through the ESC scheme/ program.
80% of its target However, due to lack of awareness of target grantees, low
subsidy ratio and participation rate of private JHSs, DepEd was
ESC scheme/
not able to attain its target and maximize the possible gains of
program grantees the program.
in their Junior High
School education, The coverage of the ESC scheme/ program has significantly
but still fell short of increased in terms of the number of grantees and the number
the targets of participating private schools in almost 30 years since the
passage of RA No. 6728 or GASTPE Law in 1989 and 20 years
since the enactment of RA No. 8545 (expanded GASTPE) in
1998. As shown in Figure 3, the increase in the number of
grantees was quite modest from 797,242 in SY 2012-2013 to
970,578 in SY 2017-2018 or an average annual growth rate of
7.3 per cent.
The ESC scheme/ program now involves a significant number

of enrolments, schools, and budget. In SY 2017-2018, the ESC
grantees numbered almost one million – the equivalent of 15.1
per cent of the 6.4 million students in public high schools and
71.1 per cent of the 1.4 million students in private high schools.
DepEd mentioned that it was during SY 2017-2018 that the
amount of subsidy increased which resulted to increase of
grantees since many are being attracted with higher amount of
grant. Fifty-four per cent (or 3,319 or a little more than half) of
the 6,168 private secondary schools, state universities and
colleges (SUCs), and local universities and colleges (LUCs) in
the country have enrolled ESC grantees.
Page 15 PAO-2018-02
Figure 3: Target and Actual Number of ESC Grantees
1,200,000
Number of Studens
1,000,000
800,000
600,000
400,000
200,000
0
2012 2013 2014 2015 2016 2017
Year
Target Actual
Table 9: Target and Actual – Number of ESC Grantees23

Target Actual
Accomplishment
Number of Number of Difference
Year Rate (in %)
Grantees Grantees* (c=a-b) (d=b/a)
(a) (b)
2012 Not available Not available - -
2013 1,000,000 797,242 202,758 79.72
2014 995,000 855,449 139,551 85.97
2015 999,000 910,312 88,688 91.12
2016 1,099,671 933,417 166,254 84.88
2017 1,040,148 970,578 69,570 93.31
Total/
5,133,819 4,466,998 666,821 87.01
Average
*Difference of 732,202 in actual number of grantees per PRO and PEAC Administration Panel (Table
10) was due to absence of data in PRO for FY 2012 and timing of extraction of data.
Comparison of the target and actual number of grantees per

Physical Report of Operations for the past six years revealed
that DepEd did not attain its physical targets (Table 9). This was
mainly attributable to lack of awareness of the target grantees.
DepEd admitted that there were really no information
dissemination on their part about the ESC scheme/ program
and there was no budget allotted for that purpose. The budget
in the GAA is solely for the amount of subsidy and none for
administration costs including the information dissemination.
There were even no provisions specified in the Department
Orders (DOs) for the same. Awareness is mostly from ESC-
participating schools’ efforts like orientation, Parents Teachers
Association’s meetings, school campaigns and distribution of
flyers.
23
DepEd, Physical Report of Operation for CYs 2012-2017.
Page 16 PAO-2018-02
The results of the survey from public schools revealed that 313
of 384 respondents or 82 per cent are not aware of the ESC
program, and 237 or 76 per cent of them want to study in private
ESC-participating schools if given the grant. This was further
supported with the result of the survey made for the parents of
the selected sample students. Out of the 374 parents of public
school students, 283 or 76 per cent are not aware of the ESC
scheme/ program, and 197 or 70 per cent want their children to
study in private ESC-participating schools if given the grant.
On the other hand, 71 of 384 or 18 per cent are aware of the

ESC scheme/ program of which 58 or 82 per cent did not opt to
apply in ESC scheme/ program because they could not afford
the top-up or the excess of the total school fees over the grant
amount (48 per cent), the location of the ESC-participating
schools is far from residence (16 per cent) and other students
just chose to study in public JHS in their area (36 per cent). The
same results were gathered from the survey of the parents.
From the 374 parents, 72 or 19 per cent are aware of the ESC
scheme/ program of which 45 or 63 per cent did not pursue the
applications of their children for the same reasons (Appendix IV:
Figure 21).
Likewise, results of the survey on selected ESC students

studying from private ESC-participating schools revealed that
out of the 384 samples, 227 students or 59 per cent came from
public elementary schools of which 218 or 96 per cent are aware
of the ESC scheme/ program either thru attendance to school
assembly or just informed by their teachers, relatives and/or
friends. Ninety-six per cent (96%) or 211 parents of the selected
sample students have the same response (Appendix IV: Figure
20).
DepEd affirmed the results of the audit team’s survey that the
students and parents are not so familiar on ESC scheme/
program. There was also a misconception that ESC is a
program of PEAC, or FAPE for some, and that PEAC is
financing the ESC and TSS. Management agreed that there is
really a need to set up a mechanism that would address the said
concern and that Management Committee of the different levels
need to cascade information on where the ESC-participating
schools are located.
Furthermore, based on the analysis of the grant amount and the

total school fees for the past two school years of the 42 private
ESC-participating schools visited, the support value or the
Page 17 PAO-2018-02
subsidy ratio24 is mostly below 50 per cent. Only 13 schools or

31 per cent of these 42 private schools have subsidy ratio of
more than 50 per cent and most of them are located outside
NCR and not Highly Urbanized Cities (HUCs). In addition, the
subsidy ratios at the division and regional level are generally
low that less than 30 per cent of the schools have subsidy ratios
that exceeded 50 per cent (Table 34). DepEd agreed that due
to high cost in tuition and other schools fees in most of the
private schools, the parents would still opt to enroll their children
in public schools considering that education is free and only
minimal expenses will be shouldered by them, such as school
projects and other requirements.
We have also analyzed the relationship of enrolment data, ESC

slot allocation data, ESC-participating schools’ data and the
participation rate of private schools for SYs 2014-2015 and
2015-2016 (Table 33). During these period, the slot allocations
of ESC grants among the regions did not change much in terms
of rankings based on their percentage shares of the overall slots
allocated. NCR, Central Luzon (Region III), CALABARZON
(Region IV-A), Western Visayas (Region VI) and Central
Visayas (Region VII) all had large share in allocations.
However, participation rate of private JHS from these regions
are quite modest that it only ranged from 27.34 per cent to 77.17
per cent for SY 2014-2015 and 30.24 per cent to 70.10 per cent
for SY 2015-2016.
Apparently, interested students did not push through with the

application in ESC scheme/ program in their area as there might
have been fewer choices of private JHS, ESC-participating
schools might have already reached their full capacities, or
ESC-participating schools are far from the student’s residences.
As a result, there were eligible beneficiaries who could have
transferred to private ESC-participating JHS and would have
helped ease the congestion in public JHS but were deprived of
opportunity to access education in private JHS.
Actual completion One of the objectives of ESC scheme/ program is to assure

rates of grantees financial assistance throughout JHS as long as the grantees
meet the requirements for regular promotion in each grade
under ESC
level.25
scheme/ program
below the target The ESC grantees continuously decreased over the four-year
rates in the past JHS period (Table 10) and the average annual completion rate
three school years
24
Support Value or Subsidy Ratio refers to the percentage of school fees covered by
the ESC Subsidy.
25
DO No. 20, s. 2017, § IV, p. 2.
Page 18 PAO-2018-02
of these grantees is only 76 per cent, which is below the target

completion rate of 82 to 86 per cent per GAA (Table 11).
Table 10: Number of ESC Grantees from SYs 2012-2013 to

2017-2018
School Grade 7 Grade 8 Grade 9 Grade 10 Total

Year (a) (b) (c) (d) (e=a+b+c+d)
2012-2013 251,375 173,438 163,798 136,827 725,438
2013-2014 257,754 227,007 159,068 154,695 798,524
2014-2015 264,769 233,215 207,004 150,922 855,910
2015-2016 267,523 239,107 212,109 192,067 910,806
2016-2017 278,761 242,134 216,907 195,926 933,728
2017-2018 293,731 254,769 223,369 202,925 974,794
Total 1,613,913 1,369,670 1,182,255 1,033,362 5,199,200
Source: PEAC Administration Panel, Available at http://admin.peac.org.ph/admin (Last accessed:
September 18, 2018)
As shown in Table 11, the computed promotion rates26 for the

above grantees ranged from 90.31 to 94.44 per cent while the
completion rates27 of the ESC grantees who entered JHS
starting SY 2012-2013 were registered at 76 to 77 per cent.
Table 11: Promotion and Completion Rate of ESC Grantees

Promotion Rate (in %) Target
Completion
School Completion
Grade 7 to Grade 8 to Grade 9 to Rate
Year Rate28
Grade 8 Grade 9 Grade 10 (in %)
(in %)
2012-2013 90.31 - - - -
2013-2014 90.48 91.19 - - -
2014-2015 90.31 90.95 92.78 - -
2015-2016 90.51 90.72 92.37 76.41 82.00
2016-2017 91.39 92.25 93.55 76.01 84.00
2017-2018 90.31 91.71 94.44 76.64 86.00
Average 76.35 84.00
Promotion rate below 100 per cent implies that there are ESC
grantees who were not promoted to the next year level and were
eventually removed from the program. Removal of these
grantees from the ESC scheme/ program is due to the following
reasons: 1) students dropped out in the middle of school year
or did not re-enroll in the following school year, 2) were not
promoted to the next grade level or retained in the same grade
level, 3) suspended, dismissed or expelled for disciplinary
reasons, or 4) transferred to a non-ESC-participating JHS. With
26
Promotion rate refers to the percentage of pupils/ students promoted to the next
grade/ year level in the following year.
27
Completion rate refers to the percentage of first grade/ year entrants in a level of
education who complete/ finish the level in accordance with the required number of
years of study.
28
Page 19 PAO-2018-02
about 76 per cent completion rate, 24 per cent of the original

grantees failed to graduate from the JHS. No information was
gathered whether these former grantees remained as paying
students of the private ESC-participating schools where they
were enrolled in, transferred to more affordable private JHSs,
transferred to public JHS, or dropped out and did not continue
school education.
Slightly more than The ESC scheme/ program is a concrete demonstration of

half of the private public-private partnership in education and this partnership is
JHS participated in sought in all levels of the program’s operations. The
the ESC scheme/ government explicitly recognizes the complementary roles
program played by public and private schools in the education system.29
The number of private JHS and also the ESC-participating JHS

nationwide for the past six years are shown in Table 12. Over
the past four years, only 53 per cent of almost 6,000 private JHS
have participated in the ESC scheme/ program. In effect, as
previously discussed, interested students might not have
pushed through with the application in ESC in their area as there
are (1) fewer choices of ESC-participating JHS, (2) ESC-
participating schools have already reached their full capacities,
(3) ESC-participating schools are far from the students’ place of
residence. This is in addition to inadequate information
dissemination of ESC scheme/ program in private JHS.
Table 12: Participation Rates of Private JHS in ESC

Scheme/ Program for SYs 2012-2013 to 2017-2018
ESC-
Participation
Private JHS30 Participating
School Year Rate
(a) JHS31
(c=b/a)
(b)
2012-2013 Not available Not available Not available
2013-2014 5,381 Not available Not available
2014-2015 5,432 2,780 51.18%
2015-2016 5,492 2,920 53.17%
2016-2017 5,935 3,187 53.70%
2017-2018 5,966 3,319 55.63%
Average 53.42%
29
DO No. 20, s. 2017, § IV, p. 1-2.
30
DepEd, Q & A FY 2018 Basic Education Statistics, p. 40.
31
PEAC Administration Panel, Available at http://admin.peac.org.ph/admin (Last
accessed: September 26, 2018).
Page 20 PAO-2018-02
Senior High School Voucher Program (SHS VP)
DepEd has The first year of implementation of SHS gained a total number
reported increasing of 1,445,107 Grade 11 enrollees. This figure increased to
number of SHS 2,733,460 in the following school year, consisting of Grade 11
and Grade 12 enrollees (Table 13).
VPBs, however the
program continues
to fail in achieving Table 13: Number of Students Enrolled in SHS
its annual target
Private SUCs/
School Public SHS Total
SHS LUCs
Year (a) (d=a+b+c)
(b) (c)
2016-2017 731,981 661,655 51,471 1,445,107
2017-2018 1,395,142 1,249,004 89,314 2,733,460
Source: DepEd’s Q&A FY 2018 Basic Education Statistics, p. 32
On the other hand, there were 645,554 Voucher Program

Beneficiaries (VPBs) in SY 2016-2017 which increased to
1,270,332 in the following school year (Table 14).
Table 14: Target vs. Actual – Number of VPBs
Actual33 Accomplishment
School Target32 Difference
Grade 11 Grade 12 Total Rate (in %)
Year (a) (e=a-d)
(b) (c) (d=b+c) (f=d/a)
2016-2017 724,913 645,554 - 645,554 79,359 89.05
2017-2018 1,524,463 699,970 570,362 1,270,332 254,131 83.33
Average 85.17
Comparison of target and actual number of VPBs for the past

two school years revealed that DepEd’s accomplishment fell
short by 11 per cent for SY 2016-2017 target of 724,913. The
target number of VPBs increased by 110 per cent in SY 2017-
2018 however, short fall in actual number of availees continued
and was posted at 17 per cent (Figure 4).
32
DepEd, Physical Report of Operations for CY 2017.
33
PEAC Administration Panel, All Billing Statements, Available at
http://admin.peac.org.ph/admin (Last accessed: November 12, 2018).
Page 21 PAO-2018-02
Figure 4: Target and Actual Number, and Annual Growth

Rate of SHS VPBs
2,000,000 120%
100%
1,500,000
80%
1,000,000 60%
40%
500,000
20%
0 0%
2016-2017 2017-2018
Target Actual Growth Rate
Analysis of the number of enrollees in Public SHS, Private SHS

and SUCs/LUCs for SY 2016-2017 and SY 2017-2018
disclosed that Public SHS consistently accommodated half of
the total student population. The Private SHS and SUCs/LUCs,
or collectively known as the non-DepEd SHS shared the other
half of the SHS population. For the past two school years, VPBs
ranged from 45 to 46 per cent of the total senior high population,
while non-VPBs enrolled in non-DepEd SHS ranged from three
to five per cent only (Figure 5).
Figure 5: SHS Population and VPBs
46%
SY 2017-2018
45%
SY 2016-2017
Students in Public SHS

5%
50% 3% Students in Non-DepEd SHS
as VPBs
51%
Students in Non-DepEd SHS
as non-VPBs
Page 22 PAO-2018-02
Low Participation Further analysis revealed that participation in the SHS VP

and Retention increased for the past two school years (Figure 6). The increase
Rates among the in the overall participation in SHS VP implies that the program
Public SHS has helped uphold the right to quality basic education and
increase access in SHS. However, this analysis also revealed
Voucher Program
that there was an uneven participation and retention rate across
Beneficiaries regions and student types, evident that the program failed to
keep students in private schools.
Figure 6: SHS VP Participation Rate of Grade 11 Enrollees
2,000,000 48%
1,500,000 47%
1,000,000 46%
500,000 45%
0 44%
2016-2017 2017-2018
Grade 11 Enrollees Grade 11 VPBs Participation Rate
Participation rates varied widely with the highest rate of 76.54

per cent in NCR and lowest at 18.25 per cent in Autonomous
Region of Muslim Mindanao (ARMM) (Table 15).
Table 15: SHS VP Participation Rate of Grade 10 Enrollees

by Region
Region SY 2016-2017 SY 2017-2018

Region 1 29.70% 29.15%
Region 2 29.94% 29.20%
Region 3 46.12% 48.86%
Region 4A 51.25% 54.45%
Region 4B 25.33% 26.87%
Region 5 21.73% 22.89%
Region 6 26.24% 28.84%
Region 7 38.37% 40.99%
Region 8 20.84% 20.22%
Region 9 37.60% 36.32%
Region 10 37.85% 40.99%
Region 11 44.71% 44.83%
Region 12 33.48% 33.36%
Region 13 32.69% 28.39%
NCR 69.35% 76.54%
Cordillera Administrative Region (CAR) 47.82% 50.24%
ARMM 20.89% 18.25%
Overall 40.69% 42.60%

Page 23 PAO-2018-02
Across student types, Table 16 shows that the number of VPBs

from Public JHS greatly outnumbered the VPBs from Private
JHS. It is to be noted however, that Grade 10 enrollees in Public
JHS comprised 80 per cent34 of the total Grade 10 population.
However, the participation rate was only 33 to 34 per cent from
the Public JHS became VPBs compared to 72 to 78 per cent of
Private JHS who became VPBs. This implies that DepEd fell
short on its target of 40 per cent of students in public JHS
availing SHS VP in non-DepEd SHS as provided in the Policy
Guidelines.
Table 16: SHS VP Participation Rate of Public and Private

JHS Grade 10 Enrollees35
Public Private
School
VPBs Grade 10 % VPBs Grade 10 %
Year
(a) (b) (c=a/b) (d) (e) (f=d/e)
2016-2017 419,594 1,271,079 33% 225,960 315,339 72%
2017-2018 453,772 1,326,036 34% 246,198 316,895 78%
Figure 7: Public JHS Students Transition to SHS
Public School Grade 10 enrollees in SY 2015-2016 totals

1,271,079, of which approximately 67 per cent or 851,485
continued to Public SHSs in SY 2016-2017 (Figure 7). Despite
the Voucher Program’s second year of implementation in SY
2017-2018, a great number of Public JHS students continued
their education in Public SHS. Out of the 1,326,036 Public JHS,
approximately 66 per cent or 872,264 enrolled in Public SHS.
34
Total Grade 10 enrollees in SY 2015-2016 is 1,586,418, of which 80.1 per cent or
1,271,079 are enrolled in Public JHS. For SY 2016-2017, total Grade 10 enrollees in
SY 2015-2016 is 1,642,931, of which 80.7 per cent or 1,326,036 are enrolled in Public
JHS.
35
DepEd National Summary of Grade 10 Enrollees.
Page 24 PAO-2018-02
Figure 8: Private ESC JHS Students Transition to SHS
For SY 2015-2016, there were 192,067 Grade 10 enrollees36 in

Private ESC JHS, of which 87 per cent or 166,92337 continued
their education in non-DepEd SHS in SY 2016-2017, and
consequently became VPBs. For the second year of
implementation in SY 2017-2018, a great percentage of the
Private ESC JHS Grade 10 enrollees continued to non-DepEd
SHS. Out of the 195,926 enrollees38, 87 per cent or 169,86539
enrolled in non-DepEd SHS (Figure 8).
Figure 9: Private Non-ESC JHS Students Transition to SHS
Lastly, private Non-ESC JHS Grade 10 enrollees in SY 2015-

2016 totals 123,27240, of which 48 per cent or 59,03741
continued to Non-DepEd SHS in SY 2016-2017, and
consequently became VPBs. Out of the 120,969 Private Non-
36
DepEd ESC Attrition Data for 2012 to 2017.
37
PEAC Administration Panel, supra note 33.
38
DepEd, supra note 36.
39
40
Total Grade 10 Private school enrollees in SY 2015-2016 is 315,339, of which
192,067 are ESC grantees and 123,272 are non-ESC.
41
Page 25 PAO-2018-02
ESC42, 63 per cent or 76,33343 enrolled in Non-DepEd SHS in

SY 2017-2018 (Figure 9).
Overall, the analysis revealed that, proportionately, the main

beneficiaries of the SHS VP came from the Private JHSs.
Private JHS have at least 48 per cent of their students
transferred to non-DepEd SHS, while Public JHS only
transferred 33 per cent.
Retention means VPBs in Grade 11 continue to be enrolled in

Grade 12. Our review of the overall retention rates across
regions revealed that ARMM has the lowest retention rate of 66
per cent while all other regions have rates ranging 84 to 90 per
cent as shown in Table 17.
Table 17: VPBs Retention Rates by Region
Region Retention Rate

Region 1 89%
Region 2 87%
Region 3 90%
Region 4A 90%
Region 4B 86%
Region 5 88%
Region 6 90%
Region 7 89%
Region 8 89%
Region 9 84%
Region 10 86%
Region 11 87%
Region 12 84%
Region 13 87%
NCR 89%
CAR 88%
ARMM 66%
Overall 88%
On the other hand, analysis of the retention rate by student type

revealed that, retention rate is lowest among VPBs from Public
JHS at 87 per cent (Table 18). A lower VPB retention may imply
that the voucher amount is not enough to help students remain
in private schools.
42
Total Grade 10 Private school enrollees in SY 2016-2017 is 316,895, of which
195,926 are ESC grantees and 120,969 are non-ESC.
43
Page 26 PAO-2018-02
Table 18: VPBs Retention Rate by Student Type
Grade 11 VPBs Grade 12 VPBs

Retention Rate
Student Type SY 2016-2017 SY 2017-2018
(c=b/a)
(a) (b)
Public 419,594 363,391 87%
Private ESC 166,923 153,482 92%
Private Non-ESC 59,037 53,489 91%
Total 645,554 570,362 88%
Removal of these beneficiaries from the SHS VP is due to the

following reasons: 1) students dropped out in the middle of
school year or did not re-enroll in the following school year, 2)
were not promoted to the next grade level or retained in the
same grade level, or 3) transferred to a public SHS.
Participating DepEd envisioned the expanded GASTPE in SHS as an

private schools’ opportunity to enhance school diversity, dynamism and
positive response autonomy as it deals with higher levels of learning in SHS and
towards SHS VP to a more diverse program tracks. DepEd also hopes to foster
a more dynamic system, with different and smaller players
deciding and innovating on their own, as opposed to a huge,
monolithic, state educational system that has limited flexibility. 44
The number of SHSs45 in the Philippines has increased by 3.72

per cent from 10,921 in SY 2016-2017 to 11,327 SHSs in SY
2017-2018 (Table 19).
Table 19: Total Number of SHSs
SUCs/
School Public SHS Private SHS Total
LUCs
Year (a) (b) (d=a+b+c)
(c)
2016-2017 5,958 4,737 226 10,921
2017-2018 6,476 4,609 242 11,327
Source: DepEd’s Q&A FY 2018 Basic Education Statistics, p. 46
After the first year of SHS implementation, DepEd was able to

open and operate a total number of 6,476 Public SHSs for SY
2017-2018. On the other hand, with the continued expansion of
the private participation in SHS, a total of 4,851 non-DepEd
SHS comprising of 4,609 Private SHS and 242 SUCs/LUCs was
operationalized. The provision of voucher for SHS, has not only
relieved DepEd from institutional pressure but has also
44
Francisco M. Varela, Department of Education Plans for the Senior HS Voucher
Program, p. 4 (August 8, 2014).
45
DepEd, supra note 30, p. 46.
Page 27 PAO-2018-02
encouraged private schools to expand and improved their

facilities given the financial support from the government
through the SHS VP.46
Moreover, because it is demand-driven, voucher-participating

schools have the incentive to perform better, innovate and offer
quality services that meet the needs of students and their
families. This is in line with the DepEd’s thrust of providing
greater choice to students and their families.
DepEd agreed and commented that there are still some private
schools that do not have enough resources and find it difficult
to comply with the documentary and physical requirements of
the program.
SHS VP- To be able to participate in the SHS VP, non-DepEd schools

participating need only to apply and secure a permit to operate SHS.47 Unlike
schools not in the ESC scheme/ program, schools that are interested to
required to undergo become an ESC-participating school must be duly recognized
recertification to by DepEd and must have passed the PEAC Certification
process. In addition, for ESC school’s continued participation in
ensure delivery of
the program, it has to undergo Recertification process after
quality education three or five years depending on its latest final rating. This ESC
Certification is a quality assurance mechanism to ensure that
quality of education is maintained and ensure with the minimum
standards set by the DepEd.48
On the other hand, SHS VP-participating schools are not

required to undergo any recertification to continuously
participate in the SHS VP. DepEd does not have a monitoring
mechanism; and its action is only limited to issues raised
against these schools.49 Same with the monitoring performed
by PEAC, to which only a small percentage of the SHS VP-
participating schools are being visited and monitored every
school year (Table 25).
Without the certification, DepEd might not be able to ensure the

delivery of quality education and compliance with the minimum
standards by the SHS VP-participating schools.
DepEd affirmed that they do not have the certification

mechanism yet for SHS VP. Since SHS VP is a new program,
46
Interview with sample school heads/ principals of ESC-participating schools in NCR,
Regions IV-A, VII and X.
47
DepEd, Department Order No. 46, Series of 2015 [DO No. 46, s. 2015], § 4 (a), p. 6
(October 13, 2015).
48
PEAC, Certification, Available at https://peac.org.ph/certification/FBUDGET (Last
accessed: October 9, 2018).
49
Page 28 PAO-2018-02
DepEd wanted to encourage the non-DepEd schools to

participate and eventually include the certification process in the
subsequent guidelines for the SHS VP. Currently, DepEd is
reviewing the guidelines on the issuance of a permit to operate
to non-DepEd schools offering SHS program and a policy has
already been drafted for the accreditation of SHS. Likewise,
DepEd commissioned PEAC to undertake a research project
that seeks to develop the instruments and processes for SHS
certification. Pilot test of the instrument shall be in November
2019.
Different modes of Our validation of program implementation and interview of

SHS delivery officials from selected non-DepEd SHS disclosed that some
among SHS VP- schools have been operating their SHS in different modes,
participating which is indicative of laxity in granting of SHS permit to operate.
Some schools are operating on a shifting schedule or three-
schools raise
days-a-week class (Monday, Wednesday and Friday or
question whether Tuesday, Thursday and Saturday) to be able to accommodate
schools are all their enrollees. There were two schools visited in Laguna and
compliant with the a school in Cebu which implement blended learning system,
SHS VP guidelines wherein students spend about 50 per cent of their time with a
teacher in school and 50 per cent online. For three days a week,
they study in the classroom and the other two days are spent
for online studying at their chosen place, time and pace.
In addition, PEAC reported that one school in Nueva Ecija has

been implementing a Dynamic Learning Program, wherein
students report to school from Monday to Friday for four hours
of which three hours are devoted for face-to-face classes while
one hour is dedicated to laboratory work. For this matter, DepEd
Region 3 verified and inspected the school and ruled that there
was under delivery of the curriculum.
These different modes of SHS delivery affect the completeness

of the subject course offering for Grades 11 and 12 and the
required number of hours per core and track subjects (at least
6 hours per day or 30 hours per week).
These schools were able to participate in the SHS VP due to

the permit to operate issued by DepEd. Therefore, the provision
of sanctions or penalties to this schools for having violated the
SHS VP guidelines are within the authority of DepEd.
DepEd committed to take a look at these different modes of

delivery. In fact, as previously mentioned, DepEd has already
drafted a policy for the DepEd and non-DepEd SHS permits.
Further, DepEd commented that although the approval of SHS
permit was transferred to the Regional Offices, there will be a
Page 29 PAO-2018-02
team who will conduct ocular inspections giving DepEd Central

Office, stakeholders and learners the assurance that delivery
modes are compliant with relevant guidelines.
Late and limited The continued participation of SHS providers in the E-GASTPE
administration of program and other financial arrangements is subject to the
NAT cannot be participants’ capabilities to meet minimum requirements and
used to assess standards, including student performance, as determined by the
DepEd.50
performance of
participating In 2016, DepEd issued DO No. 55, s. 2016 for the adoption of
schools for the Policy Guidelines on the National Assessment of Student
continued Learning for the K to 12 Basic Education Program. It aims to
participation in the assess the effectiveness and efficiency of the delivery of
SHS VP education services using learning outcomes as indicators and
determine if learners are meeting the learning standards of the
curriculum. Also, the result of assessment shall be used to
quantify judgments on learners’ academic performance.51
However, only a sample of learners or voucher program

beneficiaries was subjected to the NAT to determine if students
attain the learning standards of the curriculum and the schools
have been delivering quality education. DepEd used a stratified
random sampling procedure to represent all types of school
district, division and region, and the sample is comprised of only
50 per cent of the schools per track (public and private).52
It was noted that the administration of the Grade 12 NAT for SY

2017-2018 was executed after the end of school classes.53
Interview with the sampled divisions revealed that they had a
hard time gathering the students to take the NAT, since most of
them had already graduated and were already having their
summer vacations.54 As a result, the NAT was administered
only to a limited number of students without following the
desired sampling procedures.
Planning for the National Assessment of Student Learning for

the K to 12 Basic Education Program began as early as 2016.55
50
Rules and Regulations Implementing the Enhanced Basic Education Act of 2013,
Republic Act No. 10533, § 24 (2013).
51
DepEd, Department Order No. 55, Series of 2016 [DO No. 55, s. 2016], p. 1 (June
30, 2016).
52
Ibid. § 5.2, p. 11.
53
As per DepEd DO No. 25, s. 2017, School Calendar for SY 2017-2018 shall formally
open on Monday, June 5, 2017 and shall end on Friday, April 6, 2018. However, DepEd
Memorandum No. 68, s. 2018 or the NAT Administration Guidelines for Grade 12 in SY
2017-2018 was released on April 13, 2018.
54
55
DO No. 55, s. 2016, § 6, p. 2.
Page 30 PAO-2018-02
Inquiry with DepEd revealed that there was a delay in the

administration of the Grade 12 NAT for SY 2017-2018 due to
procurement issues, given that the program’s huge scope and
it was the first administration of NAT for SHS. A similar issue
was also reported in the DepEd Consolidated Annual Audit
Report (CAAR) Calendar Year (CY) 2015 that examinations
intended to be conducted in 2015 for the Language Assessment
for Primary Grades and NAT were not administered on time due
to the inability to procure the required learning test materials.56
The NAT results and reevaluation will help in determining the

school’s performance in providing efficient, quality and relevant
educational services, hence, without NAT results, the continued
participation and delivery of quality education of these SHS
providers is doubtful.
As of November 2018, the government had already paid a total

amount of ₱29.65 billion57 (maximum of ₱261 million in one
school with total of 16,381 VPBs) to participating schools
without any measure or assurance these schools had provided
efficient, quality and relevant educational services.
DepEd explained that they will strengthen the preparation of

procurement plan in the planning process and the Bureau of
Education Assessment (BEA) will be given technical assistance
to have a pre-procurement activities.
DepEd added that the Policy Guideline on Systems

Assessment in the K to 12 Basic Education Program provides
that NAT shall be administered to the universal population every
three years starting 2018, to provide large-scale data and micro
or school-level monitoring of achievement, and a balance
between the classroom-based assessment and system-wide
assessment.
DepEd commented that starting SY 2018-2019, the NAT for

Grade 12 shall be renamed Basic Education Exit Assessment
and will be administered to all graduating SHS students in the
public and private SHS in the country on the last week of
January 2019. All examinees shall be provided with individual
Certificate of Ratings as part of data dissemination and can be
utilized as basis for the DepEd SHS VP.
56
DepEd, CAAR for FY 2015, Part 2: Observations and Recommendations, p. 106-107.
57
PEAC Administration Panel, Payment Released, Available at
http://admin.peac.org.ph/admin (Last accessed: November 12, 2018).
Page 31 PAO-2018-02
Teachers’ Salary Subsidy
Lack of proper Both DepEd and PEAC recognized the need to implement
Program Section 14, Teachers’ Salary Subsidy58 Fund of Expanded
information on GASTPE Act of 1998 establishing fund for the purpose of
goals and subsidizing salaries of private school teachers, and
appropriating fund therefor59 with the aim of improving the
objectives on the
quality of private JHSs.60 Following the implementation of the
Teachers’ Salary TSS in SY 2009-2010, DepEd has continuously earmarked a
Subsidy (TSS) portion of its GASTPE Appropriations to finance the grant of
salary subsidy to teachers in private high schools participating
in the ESC scheme/ program.61
Teachers in ESC-participating JHSs that meet all the following

conditions qualify for the TSS:
a. Have a valid PRC license, or pass the Licensure Exam

for Teachers (LET) on or before August 15 of the current
school year;
b. Be employed by the school on or before August 15 of
the current school year;
c. Teach ESC grantees for at least 180 teaching minutes
a week.62
At the start of the program, the subsidy to TSS recipients

amounted to ₱250 per ESC grantee. Currently, the TSS is
₱18,000 per teacher per year, and any adjustments are
approved by the State Assistance Council.
The number of TSS recipients for the past six school years and
the corresponding amount paid annually is shown in Table 20.
During these periods, DepEd has paid almost half a billion for
TSS for the purpose of subsidizing/ augmenting the current
salary of licensed teachers in private schools for the latter to
stay and teach in ESC-participating schools and not to transfer
in public JHSs.
58
Teachers’ Salary Subsidy (TSS) refers to a program where an annual government
subsidy is provided to qualified teachers in ESC-participating JHSs. Such teachers are
called TSS recipients.
59
DepEd, Department Order No. 116, series of 2009 [DO No. 116, s. 2009] § 2, p. 1
(November 27, 2009).
60
DO No. 20, s. 2017, § IV, p. 2.
61
62
DO No. 20, s. 2017, § VIII (A), p. 6.
Page 32 PAO-2018-02
Table 20: Actual Number of TSS Recipients and the

Corresponding Amount Paid Annually for SYs 2012-2013 to
2017-2018
Number of TSS
Grant Amount Total
School Year Recipients
(b) (c=a x b)
(a)
2012-2013 Not available ₱12,000 ₱-
2013-2014 Not available 12,000 -
2014-2015 23,912 12,000 286,944,000
2015-2016 29,720 12,000 356,640,000
2016-2017 35,965 18,000 647,370,000
2017-2018 39,256 18,000 706,608,000
Average ₱499,390,500
April 20, 2018).
While DepEd has provided salary subsidies to teachers in ESC-

participating JHSs, it still cannot be concluded whether TSS is
improving the quality of private JHSs as there were no concrete
guidelines from the DepEd issuances on how TSS will be
utilized and assessed.
Validation of TSS implementation in 42 sample ESC-

participating schools and interview of one TSS recipient per
school revealed that all the sample TSS recipients exist and are
qualified for the TSS program (Appendix V: Table 35). However,
31 or 88 per cent of the TSS recipients are not aware of the very
objective of the TSS program and just know that TSS is a
program to subsidize/ augment the current salary of licensed
teachers in private schools. Seven or 20 per cent of them did
not even know the objective of TSS program. DepEd confirmed
that some of the teachers also think that TSS is an increase in
their salaries provided by the school administration.
GASTPE is not
designed to
prioritize coverage
of underprivileged
students
GASTPE is not designed to prioritize coverage of

underprivileged students. For ESC scheme/ program,
DepEd has not provided detailed guidelines giving the
School Committees unbridled discretion in the selection of
ESC grantees. DepEd does not check whether or not the
students are actually underprivileged, and argued that the
law only used the term “preference”; hence, they are not
Page 33 PAO-2018-02
obliged to ensure that only underprivileged students

receive the benefits. For SHS VP, DepEd with the
assistance of PEAC developed a formula based on family
income, household size, amount of top-up paid, and the per
capita income. However, such formula was not used since
the budget is more than enough for all applicants. DepEd
admitted that in this set-up, as long as the number of
applicants fit the budget, even students belonging to non-
poor families could be covered. For the past six years, a
total of 514,014 students or 31.85% of the 1.61 million
Grade 7 ESC grantees that came from private elementary
schools were given ESC slots and assisted throughout
their JHS. On the other hand, from SYs 2016-2017 to 2017-
2018, a total of 638,856 Private ESC and Non-ESC
beneficiaries have benefitted from the SHS VP. Each
grantee/ beneficiary of ESC scheme/ program and SHS VP
received assistance in the amount of ₱5,000 to ₱13,000 and
₱8,750 to ₱22,500, respectively. Approximately, an average
of ₱4.76 billion (for Grade 7 alone) and ₱10.22 billion (for
Grades 11 and 12) were paid to ESC and SHS VP-
participating schools, respectively, in aid of these
students, without assurance whether these grantees/
beneficiaries are underprivileged.
Absence of detailed In the recent issuances of DepEd relating to ESC, it was

guidelines in the provided that preference shall be given to graduates of public
selection of ESC elementary schools. The School Committee of ESC-
grantees participating schools is tasked to profile and assess the
students considered for ESC grants and select grantees based
on need, given the limited slots allocated to the school.63 Other
than the said criterion, there are no other qualifications set by
DepEd in their DOs for consideration of the said committee.
Based on interview with the school heads/ principals, it was

noted that different practices were adopted on the selection of
ESC grantees. There were schools which prioritized students
coming from public elementary schools while other schools
prioritized the existing Grade 6 students in their own schools.
Some schools applied “first-come, first-served” policy. For other
schools, all ESC applicants were granted with slots without
screening as they have enough ESC slots to accommodate the
students. Some schools also considered the family income of
the student and the number of children in the family,
administered a qualifying exam, and set grade requirement.64
DepEd added that applicants are also screened to check if they
63
DO No. 20, s. 2017, § VII (C), p. 6.
64
Page 34 PAO-2018-02
are capable of paying top-ups, given that the amount of ESC

grant covers only a fraction of the total school fees. If the
amount of grant substantially covers the school fees charged by
participating schools, the ESC scheme/ program might be able
to attract students coming from the poorest of the poor.
Apparently, the School Committee has the full discretion on the
selection of grantees as DepEd did not prescribe uniform
process and specific criteria to be observed and performed in
the selection of ESC grantees.
Section 2.3, Article XIV of 1987 Constitution of the Republic of

the Philippines provides that the State shall establish and
maintain a system of scholarship grants, student loan programs,
subsidies, and other incentives which shall be available to
deserving students in both public and private schools,
especially to the underprivileged.65
As stated in the Special Provisions of the GAA for FYs 2012-

2015, DepEd and PEAC shall streamline the implementation of
the ESC scheme/program to graduates of elementary schools
coming from areas where there are congested public secondary
schools with priority given to graduates of public elementary
schools. Also, DepEd shall issue the necessary guidelines to
ensure that ESC grantees are qualified and deserving students
not only at the time of admission to the program but also during
the continued availment thereof.66
As provided in the previous issuance on ESC scheme/ program,

the overflow students whose family income is not more than
₱36,000 per annum or falls below the poverty line as defined by
National Economic and Development Authority (NEDA) are
given preference in the selection of ESC grantees.67
As discussed earlier, the average number of Grade 7 ESC

grantees who came from public elementary schools over the
last six years is only 68 per cent nationwide. In addition, based
on our analysis of SY 2017-2018 data obtained from the sample
schools, only 10 of 42 or 24 per cent of the schools have given
substantially all, (i.e. more than 90 per cent), of its ESC slots to
public elementary schools graduates. Moreover, at division and
regional levels, less than 50 per cent of the Grade 7 ESC
grantees in NCR came from public elementary schools, and
around 53 per cent to 98 per cent from CALABARZON, Central
Visayas and Northern Mindanao. This deficiency in targeting of
65
Per E-GASTPE Act, an underprivileged student shall refer to a student whose gross
income, if any, and that of the combined annual gross income of his/her parents do not
exceed seventy-two thousand pesos (₱72,000).
66
67
Page 35 PAO-2018-02
grantees in the ESC scheme/program contributes to the non-

attainment of ESC’s objective of alleviating congestion in public
JHS.
For the past six school years, the DepEd has given ESC slots
to 514,014 Grade 7 students who came from private elementary
schools or 32 per cent of the total ESC grantees (Table 5), and
paid approximately an average of ₱4.76 billion for these ESC
grantees during their Grade 7 JHS education alone without
assurance whether they belong to the underprivileged. The
ESC scheme/ program did not properly target its grantees, thus
resulted in granting of assistance to students not belonging to
the underprivileged.
DepEd pointed out that the law only states a grant of assistance
with “preference” and not exclusivity to students whose family
income is not more than a set threshold. However, DepEd
agreed that no detailed guidelines on the selection were
provided in the DOs and this has been noted already and will
be included in the draft comprehensive ESC guidelines
intended for issuance next school year. Likewise, Management
also mentioned that for next school year, the application
process will be almost similar to SHS VP, which will also serve
as a pre-screening process for SHS VP. DepEd will continue to
update COA with the ongoing discussion regarding preference
for the underprivileged.
Further, RA No. 10533 expanded the E-GASTPE to include

Grades 11 and 12, upholds the same provisions of the 1987
Philippine Constitution, which mandates the State to provide
assistance to deserving individuals in both public and private
schools, especially to the underprivileged.
DepEd, through the SHS VP, provides and automatically grants

vouchers to Public School graduates (Category A & B) and to
Private ESC graduates (Category C). This means that they do
not need to apply for vouchers nor undergo any assessment.
From SY 2016-2017 to SY 2017-2018, data shows that Public

JHS graduates continued to garner the highest number of
voucher beneficiaries, followed by Private ESC graduates and
lastly by Private Non-ESC.
Page 36 PAO-2018-02
Figure 10: Distribution of SHS VP VPBs for SYs 2016-2017

and 2017-2018
500,000
Number of Grantees
400,000
300,000
200,000
100,000
-
2016-2017 2017-2018
Public 419,594 453,772
Private ESC 166,923 169,865
Private Non-ESC 59,037 76,333

November 12, 2018).
However, as previously discussed, the selection of ESC

grantees were left to the discretion of School Committees of the
ESC-participating schools. The deficiencies noted in the
selection of ESC grantees raise question over the classification
of Private ESC graduates in the SHS VP. If these ESC grantees
were not properly screened prior to becoming as such, their
qualification to becoming automatic voucher program recipients
will raise the same doubt too, whether they are actually qualified
and/or underprivileged.
DepEd explained that including ESC grantees in the SHS VP

provides a more cohesive program of assistance to students
who wish to continue in a private SHS. Furthermore, ESC
grantees are more likely to continue and complete SHS if they
are assured of including in the SHS VP. They are accustomed
to paying top-ups compared to public JHS completers. In
principle, inclusion of ESC grantees as automatic beneficiaries
in the SHS VP provides a better indicator of program outcomes.
SHS VPBs who had been supported through both programs

and who will graduate in Grade 12 have better opportunities
when they opt for higher education or middle-level skills
development (two-exits in the SHS program) as there is a
greater possibility for them to avail of the college scholarships
or tuition fee supplements as provided for in RA No. 8545, so
long as they qualify in the screening process.
Page 37 PAO-2018-02
Assessment of the All non‐ESC Grade 10 completers from Private JHSs (Category
socio-economic D) who wish to avail the SHS VP shall complete and submit their
status of applicants voucher application. These applicants will undergo
for SHS VP was assessments of their socioeconomic status and when deemed
disregarded since qualified are then considered as Qualified Voucher Recipients
(QVRs).68
budget for the
program can PEAC shall process all and only complete applications
accommodate all submitted on or before the deadline and forward the results to
applicants with DepEd for approval.69 However, the voucher application
complete process does not define the actions to be taken by DepEd after
documentation PEAC has submitted the summary report. Further, DepEd
determines the number of slots to be given for voucher
applicants based only on the available budget.70
For SY 2016-2017, 98,474 applicants or 80 per cent of the total

voucher applicants with clean and complete documents were all
awarded with vouchers while 66,004 or 67 per cent of the total
voucher applicants were all awarded with vouchers in SY 2017-
2018 (Table 21).
Table 21: Voucher Applicants and Successful QVRs
Online Manual Total

Total QVRs
School Year Applicants Applicants Applicants
(d)
(a) (b) (c=a+b)
2016-2017 119,516 3,964 123,480 98,474
2017-2018 89,166 9,204 98,370 66,004
Total 208,682 13,168 221,850 164,478
Source: DepEd Summary of SHS VP Voucher Applicants
PEAC started working with a formula only in December 2016

that assigns points to the applicants based on their family
income and the amount they paid for JHS.71 In February 2017,
PEAC presented a qualifying formula and the output is a score
that can be used to rank applicants. Applications are grouped
according to the family income, household size, amount of top-
up paid and the per capita income, and are compared to their
mean values. The closer is the value to the mean, the higher
the score and the farther from the mean, the lower the score. 72
However, interview with DepEd revealed that the ranking of

these voucher applicants for SY 2017-2018 was not used
because the budget was more than enough to accommodate all
68
DO No. 46, s. 2015, § I (B), p. 3.
69
DepEd, Department Order No. 60, Series of 2017 [DO No. 60, s. 2017], § VIII, p. 6
(December 1, 2017).
70
71
PEAC, Minutes of the 314th PEAC Regular Meeting, p. 5 (December 13, 2016).
72
PEAC, Minutes of the 315th PEAC Regular Meeting, p. 4 (February 22, 2017).
Page 38 PAO-2018-02
the successful applicants. Furthermore, DepEd explained that

in case the budget is not enough, the qualifying formula will be
used; otherwise, every school age children should be given
chance to go to school, whether in public or private schools.
Just like in free tertiary education where subsidy will
automatically be given, regardless of the income capacity, as
long as the students are enrolled in an SUC.
In addition, examination of the SHS VP-participating schools

with school fees above ₱100,000 revealed that most of their
VPBs are from Private non-ESC; the same applicants who have
been accepted in the program by submitting complete
documents regardless of their family income. These private
non-ESC graduates were able to pay their private school fees
in JHS without assistance from the government; thus, vouchers
granted to these students are merely equivalent to small
discount.
Figure 11: VPBs in SHS VP-Participating Schools with Total School Fees Above
₱100,000
Figure 11 shows the distribution of VPBs catered by the 13 non-

DepEd SHS with total school fees above ₱100,000.73 The high
percentage of grantees/ beneficiaries from Private ESC and
Private non-ESC is indicative that some of the grants were likely
given to students who are not in need of financial assistance as
they can enroll and stay with these prestigious schools.
Likewise, the policy of ESC grantees being classified as

automatic QVRs increases the possibility that there are VPBs
that can already afford to stay and pay the tuition fees in private
schools but are still receiving financial assistance from the
73
PEAC Administration Panel, All Billing Statements Available at
http://admin.peac.org.ph/admin (Last accessed: September 18, 2018).
Page 39 PAO-2018-02
government. This can no longer be considered economical on

the part of the government.
Since the current practice accommodates beneficiaries who are

not less fortunate, there are students who are less fortunate that
are deprived of the opportunity as they cannot afford the top-
ups. While DepEd is contemplating to increase the amount of
SHS VP subsidy to lessen the top-ups, deficiencies noted may
be attributed to the lack of suitable guidelines and inability to
consider the student’s family income or the financial needs of
the prequalified recipient of the voucher.74
For Private ESC and Private Non-ESC VPBs, the SHS VP was
able to grant vouchers to at least 48 per cent of their students
and have paid a total amount of ₱10.22 billion for 638,856
VPBs75 without assurance whether these VPBs belong to the
underprivileged. The SHS VP did not properly target its
beneficiaries, thus resulted in granting of assistance to students
not belonging to the underprivileged.
The Constitution dictates equal enjoyment of rights and

privileges, however it is only fair and just to provide assistance
or subsidize with priority those students who are less fortunate
in terms of financial capacity.
DepEd commented that in SHS VP, the priority is to give choice

to students, i.e. choice where they want to study and what track
they want to take. Hence, the reason that everybody is eligible
for SHS VP is to give students the benefit of choice.
Nevertheless, DepEd gives assurance that they shall review the

policies and processes relative to GASTPE programs and
consider putting in place a stronger mechanism for selecting
underprivileged students in the program.
Fixed Voucher DepEd would like to establish a system that provides students
amounts and with greater choice and to make this choice available even to
private school top- those who do not have the financial means to support the
education of their children on their own. In addition, DepEd
ups hindered the
believes that a voucher modality supports the DepEd’s thrust of
underprivileged expanding student choice and preference in the SHS level, so
from participating in that they have the option of pursuing SHS education in a public
the SHS VP or a private, non-DepEd school.
74
DepEd, CAAR for FY 2016, Part 2: Observations and Recommendations, p. 130.
75
PEAC Administration Panel, supra note 57. Cumulative Number of Private ESC and
Private Non-ESC VPBs with payments released multiplied by ₱16,000 average voucher
amount.
Page 40 PAO-2018-02
A survey was conducted with respondents from VPBs in non-

DepEd SHS and students in DepEd Public SHS. The survey
aims to determine the level of awareness of the students (both
beneficiaries and non-beneficiaries) in private and public
secondary schools and their parents/ guardians.76
In Table 22, survey results revealed that out of the 384 VPBs in
non-DepEd SHS and 384 students in DepEd Public SHS, 381
or 99 per cent and 352 or 92 per cent are aware of the SHS VP,
respectively. Though DepEd was not able to provide a budget
to extensively disseminate information regarding the SHS VP,
public and private schools, with the help of their respective local
government, took part to conduct school assemblies and career
guidance in their school and nearby schools.77
Table 22: Respondents Awareness Rate on the SHS VP
Not
Respondents Sample Aware
Aware
VPBs in non-DepEd SHS 384 381 3
Students in Public SHS 384 352 32
Source: Survey Results conducted to Sampled Students
However, 322 of the 352 respondents in DepEd Public SHS

who are aware of the SHS VP did not opt to avail the program
(Table 23) because they could not afford the top-up or the
excess of the total school fees over the grant amount (124), the
location of the non-DepEd SHS is far from home (54) and other
students just chose to study in public SHS in their area (124).
The same result was arrived from the survey of the sample
parents. From the 336 parents, 281 are aware of the SHS VP
but 183 did not pursue the application of their children on the
said program for the same reasons. DepEd agreed and that
while efforts have been made to disseminate information about
the SHS VP, parents would still opt to enroll their children in
public schools, thinking that their children will be better off in
public SHS in terms of content and learning experience.
76
COA Survey and Sampling Plan for GASTPE program.
77
Interview with Regional Directors and School Division Superintendents in NCR,
Regions IV-A, VII, X, and XI.
Page 41 PAO-2018-02
Table 23: Reasons Provided by Respondents from Public

SHS Students who did not apply for the SHS VP
Reasons Did not apply

322
Cannot afford the top-up 124
Location of the non-DepEd SHS 54
Chose to study in public SHS 124
Source: Survey Results conducted to Sampled Students
Survey revealed that, aside from the reason that students chose
to study in public SHS, a significant number from the sample
respondents say that the unaffordability of school top ups hinder
their transfer to non-DepEd SHS. This explains that even
though the program has more than 4,000 SHS VP-participating
schools and has high awareness rate among students, private
school top-ups in excess of the voucher amount discouraged
SHS VP recipients to enroll in non-DepEd schools.
This was further supported with the information disclosed during

DepEd’s regular meetings with PEAC. DepEd reported that a
number of public school students who migrated to non-DepEd
schools in Grade 11 wanted to go back because of additional
costs not covered by the voucher amount.78 Moreover, interview
with DepEd Public SHS Principals revealed that there were
influx of Grade 12 students for SY 2017-2018 and these
students were previously Grade 11 VPBs in non-DepEd SHS.79
DepEd added that top-ups, particularly in Technical,-
Vocational-Livelihood (TVL) track, are high because of the
materials being used unlike in Public SHS where materials are
provided to the students. Thus, DepEd is contemplating
whether to increase the amount of subsidy to keep the VPBs in
private schools.
Following the discussion about VPBs retention in the previous

section and as depicted in Figure 12, comparison of the number
of Grade 11 VPBs in SY 2016-2017 to the number of Grade 12
VPBs in SY 2017-2018 revealed that there is a significant
decrease of VPBs from Public VPBs. The decrease in the
number of Public VPBs, the results of survey conducted and
interview with Public School Principals showed that the voucher
amount is not really enough to keep a student in the private
school.
78
PEAC, supra note 72, p. 6.
79
Interview with sample school heads/ principals of SHS VP-participating schools in
NCR, Regions IV-A, VII and XI.
Page 42 PAO-2018-02
Figure 12: Grade 11 VPBs for SY 2016-2017 vis-à-vis

Grade 12 VPBs for SY 2017-2018
500,000
400,000 13%
Number of Students
300,000
200,000 8%
100,000 9%
0
Private Non-
Public Private ESC
ESC
Grade 11 VPBs 419,594 166,923 59,037
Grade 12 VPBs 363,391 153,482 53,489
It was noted that the voucher amount is pegged per capita cost
of public provision and tiered on a regional basis and by type of
beneficiary. However, it fails to address the different household
income bracket of each student in each student category. Thus,
the fixed voucher amounts and the affordability of private school
top up limits these students’ exercise of greater choice, and as
a result, more students contrary to plan continued their SHS in
public schools, thus, preventing decongestion in public schools.
DepEd also added that while the cost of education in non-

DepEd schools are high, especially in the TVL track, some TVIs
and small private schools have waived the top-up fees,
agreeing to the conditions that no such cost will be required to
the SHS QVRs. And there are some schools with no top-up fees
that even provide free uniforms and bags to SHS QVRs.
Absence of DepEd did not prescribe a policy guideline for the simultaneous
guidelines on the application of the scholarship grants provided by the schools
application for and the grant/subsidy from GASTPE; thus, resulting to different
scholarship and practices on the treatment of the GASTPE grant/subsidy and
becoming a means for the school to benefit and save from the
subsidy grant
costs that should have been covered by their scholarship
program.
Based on our interview with 79 school heads/ principals of the

participating schools validated, 36 schools or 86 per cent (ESC)
and 25 or 60 per cent (SHS VP) offer scholarship programs, like
entrance scholarship, academic scholarship, and athletic
scholarships, alongside the Program grant/subsidy.
Scholarship programs of schools often cover full, partial free
Page 43 PAO-2018-02
tuition or discount on tuition fees. It was noted from further

inquiries that participating schools were left to formulate/ apply
their own policy in the application and/or deduction of the
grant/subsidy alongside school’s scholarship program to the
total school fees. Table 24 illustrates sample practices noted
during our interview regarding the application of scholarship
grant and DepEd’s grant/subsidy against the total school fees.
Table 24: Scholarship Policies and Practices in Application

of Grants/ Subsidies and Scholarship Benefits
Scholarship Policies
No school
No ESC grant to
scholarship to be
be provided to
provided to ESC
Student can avail both the subsidy grant (ESC) and school scholars
grantees
School's Scholarship Program
Student can avail either the ESC
grant or the school's scholarship
program
Subsidy Grant Application/ Deduction
Scenario 1 Scenario 2 Scenario 3 Scenario 4
Total School Fees (SF) Total SF Total SF Total SF
Minus: Government Subsidy Minus: S Minus: S Minus: GS
[GS])
Excess of SF over GS Excess of SF over S
Minus: Scholarship [S]) Minus: GS
Excess of SF over GS and Excess of SF over Excess of SF Excess of SF
S GS and S over S over GS
=> Pay with Cash => Pay with Cash => Pay with => Pay with
Cash Cash
Or Or Or Or
Excess of S over SF Excess of GS over Excess of S over Excess of GS

=> Given to students (in SF SF over SF
form cash, book allowance, => Given to students => Given to => Given to
etc.) or to be applied next (in form cash, book students (in form students (in form
SY allowance, etc.) or to cash, book cash, book
be applied next SY allowance, etc.) allowance, etc.)
or to be applied or to be applied
next SY next SY
Legend: SF – School Fees
S – Scholarship
GS – Government Subsidy
Source: COA Analysis of the Results of Interview with School Heads/ Principal
For scenario 1, some of the schools are applying the

grant/subsidy first against the total school fees even if the
student is a full or partial scholar. In effect, the grant/subsidy
becomes a means for the school to benefit and save from the
costs that should have been covered by their scholarship
program. On the other hand, for scenarios 2 and 4, should there
be any excess from grant/subsidy after applying first the
scholarship program against the total school fees, the excess is
given to students in the form of cash or book allowance, or being
withheld by schools and applied for next year.
In case of ESC, it has been specified in the DOs that if the total
school fees declared by school in the ESC-IMS are lower than
Page 44 PAO-2018-02
the amount of the ESC grant, the school will only be paid the
total school fees.80
DepEd lacks the

necessary
mechanisms to
ensure proper
administration of
the GASTPE
program
DepEd lacks the necessary mechanisms to ensure proper
administration of the GASTPE program due to
management’s non-operationalization of a focal unit to
oversee the Program implementation and monitoring
nationwide, to provide specific directive to the DepEd
Regional and Division Offices on the review and
processing controls on submitted billing statements, and
to implement a strict performance-based payment scheme
to its service provider, PEAC. Issues identified on IT
system include absence of an approved Information
System Strategic Plan (ISSP), system ownership, input
control weaknesses, and inadequate data management
casting doubt on the accuracy of billings paid by DepEd to
the participating schools and its service provider, as well
as to the Program’s accomplishment.
GASTPE In order to ensure the smooth and streamlined implementation

Composite Team/ of the Program, DepEd issued DO No. 16, s. 2016, creating the
Interim PMO does Interim Project Management Office (PMO) or GASTPE
Composite Team. The interim PMO or the GASTPE Composite
not perform
team shall be responsible for the overall policy development
Program and program design and will continue to perform such functions
monitoring and until the permanent GASTPE Project Management Service is
oversight function established. 81
Though such interim office or team was created, it does not

perform program monitoring and oversight function. We were
informed by concerned DepEd official that this is due to lack of
personnel and of support from top management.82 Thus, no
focal unit in DepEd Central Office handles and manages the
policy formulation, implementation and monitoring of GASTPE
program nationwide.
80
DO No. 20, s. 2017, § VII (D), p. 6.
81
DepEd, Department Order No. 16, Series of 2016 [DO No. 16, s. 2016], §§ 4 & 6, p.
2 (March 21, 2016).
82
Interview with DepEd official in DepEd Central Office, Pasig City.
Page 45 PAO-2018-02
The DepEd being the institutional owner and regulator of the

Program, shall coordinate with and perform monitoring and
oversight functions on PEAC. On the other hand, PEAC, the
service provider will support DepEd in implementing the
Program nationwide.
Overall, DepEd shall conduct monitoring and evaluation

activities and report to appropriate authorities, the performance
of the Program and of the stakeholders, including but not limited
to PEAC, the participating private schools, and the DepEd field
units, as well as report other concerns in connection with or
relating to the Program and its stakeholders.83
DepEd admitted that the composite team has not convened for
a time now. Nonetheless, out of the eight functions of the
Composite Team, six have been religiously performed. DepEd
considerably falls short on the other two functions, i.e. on
monitoring and evaluation, due to overlapping of activities and
lack of manpower (from the member bureaus and/or offices).
Also, DepEd recognizes the need to convene the Composite
Team and establish a dedicated and functional office with full
staff complement that shall manage the GASTPE program.
Hence, for the short-term, DepEd will revive the PMO. And in
the long-term, it will create an office such as Bureau of Private
Secondary Education, to handle GASTPE program, from policy
formulation to program implementation.
Target numbers of Monitoring of SHS VP. The Memorandum of Agreement

schools for (MOA) between DepEd and PEAC requires the latter to submit
monitoring not quarterly reports to the former. These reports contain, among
others, the number of grantees and the adverse findings on the
attained by PEAC,
schools. PEAC set a target of 10 per cent of all participating
coupled with late schools to be monitored.
submission of
report to DepEd, In SY 2016-2017, PEAC monitored only 359 out of 482 or 74
and lack of per cent of the target SHS VP-participating schools. While in SY
apparent action by 2017-2018, PEAC was able to visit only 408 schools out of the
DepEd on adverse 422 target schools. Based on the monitoring reports submitted
findings from by PEAC for SY 2016-2017 and SY 2017-2018, 30 and 74
monitoring schools were reported to have adverse findings, respectively
(Table 25).
83
DO No. 16, s. 2016, § 4 (a) & (g), p. 2.
Page 46 PAO-2018-02
Table 25: SHS VP - Participating Schools Monitored by

PEAC against Target and Number of SHS Providers and
with Adverse Findings
Actual With
School No. of SHS Target No.
Schools Adverse
Year Providers84 of Schools
Monitored Findings
2016-2017 4,362 482 359 30
2017-2018 4,508 422 408 74
Source: Various Updates on Monitoring of ESC and SHS VP-Participating Schools
For SY 2017-2018, the SHS VP monitoring period was targeted

to commence on the first week of September and end on the
last week of October 2017. However, due to the delays in the
opening of Learner Information System (LIS) and the creation
of billing statements in the VMS, the monitoring activity for SHS
VP did not start as scheduled.85 While the target number of
schools for monitoring remained at 10 per cent of total schools
participating in the SHS VP, PEAC was not able to visit and
monitor all target schools.86 Likewise, there was lack of
apparent actions by DepEd on the adverse findings.
In addition to the limited monitoring of PEAC, the audit revealed

that it was only in February 201787 that PEAC started submitting
quarterly accomplishment reports to DepEd. This is contrary to
the provisions of the MOA.
DepEd commented that PEAC has been regularly submitting

reports on ESC, TSS and SHS VP billing statements. For
INSET and Research, liquidation and other related reports are
submitted to DepEd. However, DepEd recognized the need to
itemize the reports it will require from PEAC.
The MOA entered into by PEAC as the service provider of

DepEd in the implementation of GASTPE is a fixed-price
contract and payments made to PEAC did not follow a
performance-based payment scheme. In 2017, DepEd was able
to release payments to PEAC for activities that PEAC has not
yet performed as of date of payment. In addition, despite PEAC
not meeting its target to monitor and visit 10 per cent of the SHS
VP-participating schools for SY 2016-2017, it received the full
contract price.
84
PEAC Administration Panel, Payment Released, Available at
http://admin.peac.org.ph/admin (Last accessed: October 29, 2018).
85
Update on Monitoring of ESC and SHS VP-Participating Schools dated September
13, 2017.
86
Update on Monitoring of ESC and SHS VP-Participating Schools dated March 13,
2018.
87
PEAC, supra note 72, p. 1.
Page 47 PAO-2018-02
With the absence of a monitoring body in DepEd or a standard

and independent mechanism that will monitor the performance
and attainment of goals of the GASTPE program and its
stakeholders, the achievement of the program goals cannot be
assured.
Performance- DepEd prematurely released the “grants” in full to the PEAC in

based payment violation of the terms of their MOA. Under the MOA, PEAC will
scheme for the be receiving from DepEd the amount ranging from
services rendered ₱100,000,000 to ₱190,000,000 for the services it rendered,
including but not limited to the conduct of regional orientation
by PEAC not fully
conferences, certification visits of new applicant schools, re-
considered in the certification of participating schools, field audit visits of
terms of payment participant schools, and other administrative functions. The
per MOA MOA refers to this payment as “grant” but it is actually in the
nature of management fees. Table 26 shows how the “grant” is
allocated based on the programs under GASTPE from SY
2012-2013 to SY 2017-2018.
Table 26: Fund Releases by DepEd to PEAC

Administrative Research
School INSET Fund Total
Cost Fund
Year (b) (d=a+b+c)
(a) (c)
2012-2013 ₱ 60,000,000 ₱ 40,000,000 ₱20,000,000 ₱120,000,000
2013-2014 60,000,000 40,000,000 - 100,000,000
2014-2015 60,000,000 40,000,000 20,000,000 120,000,000
2015-2016 60,000,000 40,000,000 20,000,000 120,000,000
2016-2017 63,000,000 80,000,000 20,000,000 163,000,000
2017-2018 90,000,000 80,000,000 20,000,000 190,000,000
Total ₱393,000,000 ₱320,000,000 ₱100,000,000 ₱813,000,000
Source: DepEd, CAAR for FY 2016, Part 2: Observation and Recommendations, p. 117, and
supporting documents
Pursuant to the MOA, DepEd should release the grant to PEAC

based on the following schedule:
Table 27: Schedule of Payment to PEAC for Administrative

Function
Tranches Accomplishment
20% For mobilization costs within 30 days of the signing of the
agreement
25% Upon submission of at least 50 per cent of the total number
of school billing statements
10% Upon submission to DepEd of the annual report, subject to
adjustment for late submissions, additional allocations, and
other similar circumstances
Source: MOAs between DepEd and PEAC for SYs 2012-2013 to 2017-2018
Page 48 PAO-2018-02
As can be seen from Table 28, DepEd paid PEAC in full even if
the required percentage of accomplishment have not yet been
attained.
Table 28: Details of Fund Releases by DepEd to PEAC
Check
Particulars Amount
Date No.
SY 2014-2015
December 10, 2015 1351942 Payment of Research ₱ 20,000,000
July 30, 2015 1350610 Payment of INSET 40,000,000
July 30, 2015 Full payment of 60,000,000
1350611
Administrative Cost
SY 2015-2016
June 24, 2016 1365563 Payment of Research 20,000,000
June 24, 2016 1365565 Payment of INSET 40,000,000
June 24, 2016 Payment of Administrative 70,000,000
1365564
Cost
SY 2016-2017
August 18, 2016 1366647 Payment of Administrative 63,000,000
December 8, 2016 1370860 Cost
December 22, 2016 1371090
September 21, 2016 1369651 Full payment for Research 20,000,000
December 20, 2016 1371039
September 2, 2016 1366757 Full payment for INSET 80,000,000
December 20, 2016 1371038
SY 2017-2018
December 22, 2017 1389114 Full payment of 90,000,000
Administrative Cost
December 22, 2017 1389115 Full payment for Research 20,000,000
December 22, 2017 1389116 Full payment for INSET 80,000,000
*No available details for SYs 2012-2013 and 2013-2014.
Source: DepEd, CAAR for FY 2016, Part 2: Observation and Recommendations, p. 117, and
supporting documents
Based on the table above, DepEd deviated from the payment

schedule twice; first on SY 2016-2017 and second on SY 2017-
2018. For SY 2016-2017, DepEd already paid PEAC in full by
December 20, 2016. Full payment was made despite the fact
that PEAC have not submitted yet 100 per cent of the total
number of school billing statements since it is still in the middle
of the school year. Furthermore, at that point, the annual report
for that school year could not be prepared yet. For CY 2017-
2018, the same thing happened. DepEd also already paid
PEAC in full on December 22, 2017.
In addition, the MOA also requires PEAC to submit to DepEd a

program report on a quarterly basis, or as necessary including
annual reports and liquidation of expenses. However, since
fund releases were recognized as outright expense in books of
accounts, regular compliance to the said requirement was not
enforced or closely monitored by DepEd.88
88
DepEd, supra note 74, p. 117.
Page 49 PAO-2018-02
Upon presenting these findings to DepEd, the Management

assured that the stipulated requirement and schedule of
payments shall be enforced and/or shall be closely monitored
by them moving forward.
Following the prescribed schedule of payment is crucial in

ensuring that PEAC is paid based on services rendered per
MOA in line with the principle of economy.
Without specific Based on relevant DOs, the DepEd Regional Office’s

directive to DepEd responsibilities cover, among others, representing the
Regional and Department in the RPCom and helping to carry out its duties,
Division Offices, including but not limited to checking, approval and signing off
on the billing statements.89 In order to perform this function,
performance
Regional Directors are given access to the information systems
review and relating to SHS VP and ESC.
processing controls
on submitted billing However, inquiry from selected DepEd Regional Directors
statements by revealed that they sign the submitted billing statements without
PEAC cannot be further validation and/or random checking of number of students
effectively billed vis-à-vis name of students because of the limited time
undertaken given to them, while the others, do not have access to the ESC-
IMS and VMS. DepEd replied that in the past years, access to
the IMS and VMS Administration Panel has been provided to
the DepEd Regional Directors several times which the latter
may view to determine the status of all billing statements
created in their regions. Likewise, the list of ESC grantees or
SHS VPBs per billing statement created by the participating
schools may be viewed.
It was noted that there is also no clear and specific directive

from the DepEd Central Office for the conduct of review of the
billing statements. DepEd Regional and Division Offices were
left at their own discretion whether to perform validation since
monitoring of the grantees is being done by PEAC. Without
specific directive, DepEd ROs and DepEd DOs end up not
checking or reviewing the billing statements. This practice
raises questions on the accuracy of billings even with sign off of
concerned DepEd RO.
Consequently, PEAC reported to DepEd Central Office

occurrences of double-billed grantees and VPBs. Some schools
have either submitted their refunds for the double-billed
grantees and VPBs or provided proofs that the double-billed
grantees and VPBs are valid students of their schools. The total
89
DO No. 20, s. 2017, § V, p. 3.
Page 50 PAO-2018-02
amount refunded by these schools already reached ₱10.4

million as of 12 September 2018.
Also, inquiry with DepEd revealed that they are still in the
process of designing a standard independent monitoring
mechanism for PEAC, participating private schools and
students. To date, DepEd only conducts independent fact
finding investigation on cases raised against PEAC and/or
participating schools.
Overall, DepEd should issue appropriate guidelines for the

implementation of the Program and ensure transparency and
accountability in the Program implementation. These includes
undertaking periodic reviews of the Program features and
making adjustments, as necessary, to ensure the successful,
effective and sustainable implementation of the program.
Furthermore, as provided in DOs, RPComs as chaired by

DepEd Regional Director and co-chaired by PEAC Regional
Program Director, shall oversee compliance of participating
schools in their regions with the policies and guidelines of the
GASTPE programs of assistance.90 However, based on the
interview with the Regional Directors from NCR,
CALABARZON, Central Visayas and Northern Mindanao and
even with the School Division Superintendents of the cities/
municipalities visited, they have not been involved in the
implementation of the GASTPE program except for the signing
of billing statements prior to submission to PEAC National
Secretariat. Instead, over recent years, the monitoring of
GASTPE program has been single-handedly done by PEAC.91
DepEd committed that in the issuance of the next guidelines
and policy, the roles and functions of other DepEd units in
relation to the implementation of GASTPE programs will be
clearly defined.
90
DO No. 20, s. 2017, § V, p. 2.
91
Interview with Regional Directors and School Division Superintendents in NCR,
Regions IV-A, VII, X, and XI.
Page 51 PAO-2018-02
Absence of an One of the best Information Technology (IT) practices requires

approved creating a strategic plan that defines, in co-operation with
Information relevant stakeholders, how IT-related goals will contribute to the
Systems Strategic enterprise’s strategic goals. Include how IT will support IT-
enabled investment programmes, business processes, IT
Plan (ISSP)
services and IT assets. Direct IT to define the initiatives that will
exposes DepEd to be required to close the gaps, the sourcing strategy and the
the risk of wastage measurements to be used to monitor achievement of goals,
of IT resources and then prioritize the initiatives and combine them in a high-level
non-achievement road map.92
of goal in rendering
efficient and DepEd currently does not have an approved ISSP. According
effective services to the Director of the DepEd Information and Communication
Technology Service (ICTS), they have a draft ISSP which was
not approved since it did not meet the requirements of the
Department of Information and Communications Technology.
DepEd attributed the change in leadership in the ICTS as the
main cause why the ISSP was not pushed through. But now,
with the new leadership, DepEd’s draft ISSP could still be
pursued for approval.
The lack of a clear and official IT direction have led to a

multitude of issues that affect DepEd’s ability to become self-
sustaining when it comes to the implementation of its core
programs like the GASTPE. These issues include the following:
a. Lack of IT personnel. The DepEd ICTS only has 29 staff

positions, 12 of which are vacant. For an agency that
implements a nationwide program that relies heavily on
IT, the current plantilla of DepEd is a far cry from other
government agencies with similar programs who
employ over a hundred IT personnel to more effectively
manage the expected demand for IT services.
b. Low level of IT skills. ISSPs typically either expressly

indicate or have an allusion to Capacity Building
projects aimed at developing the competence of the
agency’s IT personnel and providing enough budget for
such purposes. The lack of an approved ISSP in this
case indicates the lack of clarity as to which personnel
will undergo trainings, what trainings will be conducted,
and how much is allotted for these trainings.
c. Overdependence on outsourcing as a means to

implement its Program. To compensate for the lack of
an overall IT strategy or plan, DepEd has turned to
92
Information Systems Audit and Control Association (ISACA), Control Objectives for
Information and Related Technologies (COBIT) 5: Enabling Processes, p. 61 (2012).
Page 52 PAO-2018-02
seeking the assistance of third parties to provide what

it lacked in terms of its IT requirements. Development
of core applications of the GASTPE were all done by
Basic Education Sector Transformation (BEST) and
PEAC. Day-to-day management of the IT infrastructure
supporting these applications is also done by these
third parties. Although this arrangement helped greatly
in the implementation of the GASTPE, it necessitated
that any agreements between DepEd and the third
parties remain intact for an indefinite period of time as
DepEd could not implement the Program on its own.
DepEd admitted that there is lack of personnel in ICTS but only

because they are governed by certain rules. In as much as
DepEd would like to add more staff, the current staffing pattern
of DepEd is being based on the Personal Services Itemization
and Plantilla of Personnel (PSIPOP) in 2006. In addition, DepEd
has started developing a transition plan by conducting coaching
and mentoring activities to DepEd personnel on technologies
developed by BEST. However, it is still uncertain whether the
current number of IT personnel of DepEd could manage the
transition plan that is being pursued by the ICTS. To address
the limitations in its current staffing pattern, ICTS has adopted
a strategy of using cloud technologies to reduce the technical
staff and simplifying the systems so that non-technical users
can be tapped in the development phase. It is also in the
process of building up and standardizing the skills of Regional
and Division IT personnel so they can be tapped for future
requirements of the Department.
The absence of an ISSP makes it difficult to properly justify high-

value investments and expenditures in relation to an agency’s
IT initiatives. Acquisition of expensive IT equipment for instance
may be questioned and eventually be disallowed in audit
without express indication from an ISSP that the acquisition is
related to a project or plan that is signed and approved by
management.
There is no clear direction in terms of IT without an official

document approved by management such as an ISSP.
Although DepEd managed to fairly implement the GASTPE
program sans an ISSP, it did so at the cost of self-sustainability.
Page 53 PAO-2018-02
Confusion as One of the best IT practices requires the need to define and
regards the maintain responsibilities for ownership of information (data) and
ownership of the information systems, and ensure that owners make decisions
GASTPE about classifying information and systems and protecting them
in line with this classification.93
applications and its
business DepEd’s information systems were all designed by DepEd, and
processes developed and being managed by BEST and PEAC. Both
parties provided what was agreed upon with DepEd and have
developed the necessary applications for the GASTPE program
to wit:
Table 29: Applications Developed by BEST and PEAC
Date of
Applications developed by BEST
Implementation
LIS 2011
Enhanced Basic Education Information System (EBEIS) 2011
LR Portal 2010
Date of
Applications Developed by PEAC
Implementation
ESC-IMS SY 2009-2010
SHS VMS SY 2016-2017
ESC-IMS and SHS-VMS Administration Panel SY 2009-2010
SHS Online Voucher Application Portal (OVAP), v.2 SY 2015-2016
SHS Administration Panel SY 2009-2010
Source: COA Information Systems Survey Questionnaire
Though this setup has allowed the GASTPE program to run

more capably over the past years, it however raises concerns
over continuity. In a review of the provisions of the MOA
between DepEd and PEAC signed in 2017, there are no explicit
stipulations on technology transfer. The MOA defined the
responsibilities of both DepEd and PEAC in the implementation
of the GASTPE program along with the agreement on funding
and payments but has stopped short in defining the terms as to
the eventual ownership of the GASTPE applications and its
data. Payments to PEAC cover the costs for external
institutional backup, support, maintenance, and upgrade for
ESC-IMS and SHS-VP amounting to ₱5.0 million for Information
Systems Development and Maintenance. Despite the fact that
DepEd paid for the development and maintenance of the
systems, it is unclear if DepEd would eventually obtain
ownership, maintenance and use of the applications when the
agreement ends or is terminated sans any explicit provisions in
the MOA stating such.
93
ISACA, supra note 92, at 55.
Page 54 PAO-2018-02
BEST claims that the LIS and EBEIS had always been DepEd’s
property and currently performs the system maintenance and
have already set out plans in 2017 to eventually turn-over the
entire system to DepEd by 2019. However, this transition has
yet to push through.
The BEST program is set to end on 2019. When the program

ends, there is no assurance that the contractors hired to
implement the program will still continue to be in partnership
with DepEd. On the other hand, the MOA between the DepEd
and PEAC is also set to end in 2019. The MOA is renewable
every year but DepEd or PEAC may still choose not to do so. If
PEAC and BEST abruptly cease to become partners of DepEd
in the operation of the GASTPE program without any proper
turnover of the systems, processes, and knowledge, DepEd
may encounter so many problems in implementation given the
state of its ICTS that it may resort to diluting the Program if the
costs far outweigh its benefits.
Upon presenting this observation to DepEd, the Management

cited the rule on commissioned work under the Intellectual
Property Code in claiming the right of ownership over the
systems. The Management said that pursuant to RA No. 8293
or the Intellectual Property Code of the Philippines, DepEd
owns the GASTPE applications with the data, which were
developed by PEAC through payments made by DepEd
covering cost of such development. As stated in Section 178.4
of the Intellectual Property Code, in the case of a work
commissioned by a person other than an employer of the author
and who pays for it and the work is made in pursuance of the
commission, the person who so commissioned the work shall
have ownership of the work, but the copyright thereto shall
remain with the creator, unless there is a written stipulation to
the contrary.94 DepEd further explained that there is no such
“written stipulation to the contrary” stated in the MOA. Hence,
by operation of law, the GASTPE applications belong to DepEd.
Currently, the matter is under discussion between DepEd and
PEAC.
We agree with the position of DepEd that in the absence of

written stipulation, the ownership of commissioned work
belongs to the entity which commissioned the work. However,
we would like to express our concern regarding the recent
actions or inactions of DepEd regarding this issue.
94
An Act Prescribing the Intellectual Property Code and Establishing the Intellectual
Property Office, Providing for its Powers and Functions, and for Other Purposes
[Intellectual Property Code of the Philippines], Republic Act No. 8293, § 178.4 (1997).
Page 55 PAO-2018-02
During PEAC’s 318th Regular Meeting on December 13, 2017,

the Intellectual Property Rights was discussed, in particular, the
copyright and ownership of PEAC over products such as
training materials, computer programs, system and processes
that are related to the GASTPE program implementation. These
would be the basis for negotiation with DepEd Legal and would
be covered by a separate agreement.95 The minutes of the said
meeting was approved on March 13, 2018 during the 319th
regular meeting of the PEAC without any assertion on the part
of the DepEd representatives as to their claim of ownership.
When this issue again was discussed during the exit

conference, representatives from DepEd did not contest such
claims. Hence, while the Intellectual Property Code is clear on
ownership of commissioned work, it would be prudent to include
in the MOA or any agreement a provision on the ownership of
the systems to avoid confusion.
Input control Control activities in Item 06.02 under the Deliver, Service and
weaknesses and Support domain of COBIT 5 state that:
inadequate data
quality “3. Input transactions in a timely manner. Verify that
transactions are accurate, complete and valid. Validate
management have
input data and edit or where applicable, send back for
led to the creation correction as close to the point of origination as
of inaccurate data, possible.”96
duplicates, and
additional work to Data is considered high quality if it is “fit for its intended uses in
correct such data operations, decision-making and planning”.
An analysis of a sample of duplicate learners showed that many

learners had a one-day difference in their birthdates with their
duplicates. Some duplicates also have different genders but the
names are the same. Twenty Learner Reference Numbers
(LRNs) belonging to ten uniquely named persons had prior
billing histories aggregating to a total of ₱344,875.
Likewise, analysis of ESC-IMS database shows 1,456 learners

with more than one ESC Identification (ID). Just like the LRN,
the ESC ID is used to uniquely identify one learner in the ESC
program from another. The LRN is issued by DepEd while the
ESC ID is issued by PEAC to ESC program beneficiaries.
DepEd commented that PEAC has been continuously

improving the IMS to avoid the issuance of two ESC IDs to one
95
PEAC, Minutes of the 318th PEAC Regular Meeting, p. 9 (December 13, 2017).
96
ISACA, supra note 92, at 199.
Page 56 PAO-2018-02
learner. The IMS has a mechanism to check the names and

birthdates to arrest duplicate learners inputted by participating
schools. However, system errors and internet problems
sometimes cause the issuance of two ESC IDs to a single
learner.
In all of the duplicates, it could not be determined which is the

correct unique identifier to use without validating from the
source documents such as the learner’s Permanent Record
(Form 137), Report Card (Form 138), ALS Certificate, Diploma
or Portfolio, NAT results, and the Accreditation and Equivalency
(A&E) Examination results. Additional work is needed to be
performed by DepEd personnel to validate and correct these
learner information.
Under DO No. 1, s. 2015, a learner can still enroll in a school

even when he/she does not present his/her birth certificate
during early registration but may submit his/her birth certificate
anytime within the school year. However, in order for the learner
to be encoded in the class under the LIS, it is necessary that
the learner should already have his/her LRN available.
Otherwise, the learner shall be considered non-existing and
unenrolled when seen from the LIS despite having already and
actually attended classes. Under these circumstances, the
school head shall have the discretion to allow the registration of
a learner in the LIS sans the necessary source documents that
can ensure the accuracy of learner information like the Birth
Certificate, or Student’s Permanent Record (Form No. 137) or
Student’s Report Card (Form No. 138).97 Without these
authentic documents by which the LIS encoder can rely upon,
the LIS encoder can make errors during encoding and end up
creating new LRNs for a learner that already had one
previously.
Under the design of LIS controls, a creation of LRN requires the

approval of the Division Planning Officer (DPO). But as in the
case of the encoder, the DPO can still commit errors in
judgment especially when faced with huge volumes of requests
for LRN approval and not enough supporting documents to
examine.
The duplicates resulted in double billings. In addition, data

errors resulted to delays in the billing process. The number of
duplicates and errors in the LIS data necessitated additional
work on the part of teachers who had to render overtime
services to clean it up as provided under DepEd released DO
No. 33, s. 2013 entitled “Learner Information System (LIS) Data
97
DepEd, LIS Data Issues and Frequently Asked Questions.
Page 57 PAO-2018-02
Housekeeping and Implementation for School Year 2013-

2014.”
DepEd commented that the birth certificate is required only

once in the duration of a learner’s completion of basic education
and is required upon enrollment at whatever level the learner
first becomes part of the system, usually at Kinder or Grade 1,
prior to encoding in the LIS and being assigned an LRN. While
schools continue to admit learners who cannot immediately
comply with the requirement, the policy is that the learner will
not be able to officially graduate Grade 6 or move up from Grade
10 without completing the documentary requirements. The
assumption, therefore, is if the learner has reached Grade 7 in
a private JHS or Grade 11 in a private/non-DepEd public SHS,
then the learner had already submitted the necessary
requirements to authenticate the details of his/her LRN. The
same applies to the submission of Form 137 (now called SF10)
and Form 138 (now called SF9) which are transmitted/
transferred from one school to another electronically through
the LIS. The only time this will actually affect GASTPE programs
is if the learner reaches Grade 7 or Grade 11, becomes a
grantee or VPB, and his/her LRN is still not correct. That wrong
LRN is then what will be reflected in the ESC-IMS/ SHS-VMS
when the systems check against the LIS. Again, the ESC-IMS
and SHS-VMS will only reference the LIS.
Further, PEAC provides DepEd the list of QVRs from ESC

Grade 10 completers and those who successfully pass the
Voucher Applications and the latter will match the list to the
existing database of students in the LIS. This means that the
names with double LRNs are already existing in the LIS prior to
PEAC’s submission of the list and the eventual matching done
by DepEd.
Page 58 PAO-2018-02
Duplicates and PEAC’s systems (ESC-IMS and VMS) are structurally and
data errors in the logically separated from DepEd’s systems (LIS and EBEIS).
LIS, VMS, and Each system also contains different sets of data. LIS contains
ESC-IMS have all learner data while VMS and ESC-IMS contain all billing data
in relation to the ESC and SHSVP programs.
resulted in delays in
the payment of Analysis of ESC data has shown that there are 1,456 learners
subsidies to who had more than one ESC ID. Records show 237 learners
schools and with multiple ESC IDs having been billed by schools to DepEd
excessive more than once in the same school year with one billing for each
payments from ESC ID. The estimated aggregate amount of the double billings
DepEd due to based on prevailing grant rates from 2012 to 2017 was
double billed ESC ₱4,845,500.
and SHS VP
beneficiaries Also, analysis of VMS data has shown multiple cases of
learners with multiple LRNs who are being billed by the schools
to DepEd more than once or twice in the same school year with
a different LRN for each billing. The aggregate amount of the
multiple learner billings as per the VMS data is ₱6,484,300.
DepEd conducted validation of the learner data to reduce and

possibly eliminate these errors. However, the validation is
taking some time for the agency to do and as a result,
contributed to the delays. If a learner’s details are undergoing
validation, the school cannot bill DepEd for that learner until the
validation is complete.
Due to numerous complaints of delayed payments caused by

the ongoing validation of LIS data, PEAC developed a
mechanism through which schools can bill so that they can still
get paid while the validation is ongoing. This mechanism was
developed so that learners will not be forced to shoulder the
subsidy amount and so that DepEd will be able to utilize its
GASTPE budget before it lapses.
DepEd also commented that the billing workaround was

introduced as a stop-gap measure so that billing may proceed
and schools and learners are not unduly disenfranchised by
system issues. It is supposed to be employed only while
validation of LRN against learner details is ongoing and causing
delays. Once housekeeping is completed and the LIS stabilizes,
it is expected by both DepEd and PEAC for the process to revert
to using the control mechanism of validation of both LRN and
learner details as a prerequisite to billing.
Page 59 PAO-2018-02
Persisting issues
on the juridical
personality of
PEAC threaten the
continuity of the
GASTPE program
From 1996 up to the present, DepEd has engaged PEAC as co-

implementer to assist in the management and implementation
of GASTPE. Currently, PEAC manages the vital components of
the GASTPE program such as certification, evaluation and
processing of billing statements, and monitoring of
beneficiaries, among others. However, due to the persisting
questions as to the legal personality of PEAC, the DepEd
expressed concern as to its existing relationship with the former.
Since the Secretary of Education serves as the Chairperson of
PEAC, DepEd is wondering whether or not there would be
conflict of interest since PEAC has been functioning as a
service provider of GASTPE. Furthermore, as early as 1969,
there have been questions as to whether or not PEAC is a public
or private entity. Up to the present, no legal document has
settled this issue. There have been three Department of Justice
(DOJ) Opinions, which were issued discussing this matter.
However, apart from just having persuasive effect, none of the
DOJ opinions really settled the matter because all three
opinions declared that PEAC is merely a trustee of FAPE, an
irrevocable trust fund between the Philippines and the United
States of America. Also, all three DOJ opinions declared that
PEAC is neither a corporate nor government entity, which is
more confusing. Settling this issue is vital since DepEd already
delegated important components of the GASTPE program to
PEAC. The ideal scenario would be to conclude that PEAC has
the appropriate legal personality to co-manage the GASTPE
program. However, in the event that it has been proven that
PEAC has no authority to co-implement the GASTPE program,
DepEd will experience difficulty in continuing the Program.
PEAC is not a Even PEAC is confused with its legal personality. It has been
private corporation argued in one of its regular meetings that PEAC could be
considered a private corporation. Such interpretation is wrong.
Creating a private corporation through an executive order (EO)
violates the Constitution. Assuming arguendo that it is a private
corporation, many of its existing practices would violate different
laws. First, PEAC’s inclusion in the GAA would become highly
irregular since Congress, in effect, awarded contracts through
the GAA. Second, PEAC would have to undergo public bidding
Page 60 PAO-2018-02
before it can become a service provider, which currently it does

not do. Lastly, conflict of interest would arise since the Secretary
of Education would be exercising two conflicting roles.
PEAC is a After a careful review of the relevant legal documents, we

government believe that the PEAC is a committee under the Office of the
instrumentality President and it functions as a government instrumentality,
which is subject to the jurisdiction of the COA. First, the PEAC
is a committee created by the President through an EO. The EO
is silent as to which agency shall have administrative jurisdiction
over PEAC. In the absence of such, the President shall have
direct administrative supervision, pursuant to his general
administrative powers under Section 17, Article VI of the 1987
Constitution of the Philippines. Second, PEAC has been
functioning as a government instrumentality since: a) it has
been endowed with some corporate powers, b) it is
administering special funds, c) it is enjoying operational
autonomy, and d) the Secretary of Education sits as an ex-
officio member. The case of the Boy Scouts of the Philippines
v. Commission on Audit, G.R. No. 177131, June 7, 2011 applies
in this case.
Background
PEAC is created The President of the Philippines created the PEAC, through the
through E.O. No. issuance of EO No. 156, s. 1968.98 It was created to serve as a
156, s. 1968 trustee of the FAPE. FAPE is an irrevocable trust fund created
pursuant to the project agreement between the Philippines and
the United States involving an initial seed fund in the amount of
Six Million One Hundred Fifty Four Thousand Dollars
($6,154,000.00) sourced from the Special Fund for Education
authorized by U.S. Public Law 88-94.
The Fund is created to finance programs of assistance to

private education. The relevant provision reads:
SEC. 2. Purpose of the Fund. The Fund shall be

established for the purpose of financing programs of
assistance to private education, utilizing only the
earnings thereof, whether in the form of’ interests,
dividends or capital gains, through grants and/or loans
for faculty training and development in the forms of
scholarships, research grants, faculty incentives, inter-
institutional cooperative projects, and other programs of
98
Office of the President, Constituting the “Fund for Assistance to Private Education”
as an Irrevocable Trust, Creating a “Private Education Assistance Committee” as
Trustee, and Providing for the Management Thereof, Executive Order No. 156 [E.O.
No. 156] (November 5, 1968).
Page 61 PAO-2018-02
benefit to private education, but excluding any support

of religious worship or instruction.
PEAC is composed PEAC is composed99 of:

of representatives
from the public and 1. The Secretary of Education or his representative, as
private sector Chairman;
2. A representative from the National Economic Council
(now, NEDA);
3. A representative of the Catholic Educational Association
of the Philippines, as member;
4. A representative of the Association of Christian Schools
and Colleges, as member; and
5. A representative of the Philippine Association of
Colleges and Universities.
E.O. No. 156, PEAC exercises the following functions100:

s.1968 listed the
specific functions of 1. Set the investment policy of the Fund;
PEAC 2. Establish priorities, which shall be reviewed periodically
and revised as necessary in accordance with changing
conditions, among the various possible project areas
after consulting with the Philippine Manpower
Development Council (now Technical Education and
Skills Development Authority;
3. Provide for the receiving and processing of projects
sought to be financed by the Fund;
4. Make all decisions on the use of the Fund’s income and
capital gains, including final action on individual
applications for grants and/or loans;
5. Avail of professional counsel and services by retaining
an investment and financial manager, if desired;
6. Ensure that materials descriptive of the origin of the for
Assistance to Private Education, projects undertaken
through grants from the Fund, and buildings financed in
whole or in part through grants from the Fund shall
appropriately identify the contribution of the Special
Fund for Education made available by the people of the
United States of America in recognition of the common
efforts of the Philippines and the United States during
World War II; and
7. Perform such other acts and things as may be
necessary proper or conducive to the purposes and
objectives of the Fund and its programs.
99
Ibid.
100
Ibid.
Page 62 PAO-2018-02
The President The President amended E.O. No. 156, s. 1968 twice. First, by
amended E.O. 156, issuing E.O. No. 163, s. 1968101 and second, by issuing E.O.
s. 1968 to authorize No. 150, s. 1994102. E.O. No. 163, s. 1968 merely added a
the FAPE, through provision making all the committee’s staff highly technical
and/or primarily confidential in nature. This provision was later
PEAC, to receive
on removed by E.O. 150, s. 1994. Apart from the
contributions aforementioned amendment, E.O. No. 150 also authorized
donations, grants, PEAC to receive contributions from the government. The
bequests, gifts pertinent provisions of E.O No. 156, s. 1968 as amended by
and/or loans from E.O. No. 150, s. 1994 reads:
the government
“SECTION 2. Purpose of the Fund. The Fund shall be
established for the purpose of financing programs or
assistance to private education, utilizing only the
earnings thereof, whether in the form of interest,
dividends or capital gains, through grants and/or loans
for faculty training and development in the forms of a
scholarships, research grants, faculty incentives, inter-
institutional cooperative projects, and other programs of
benefit to private education, but excluding any support
of religious worship or instruction. Contributions,
donations, grants, bequests, gifts and/or loans
from the Government of the Republic of the
Philippines for programs of assistance to private
education may be managed and administered by
the Private Education Assistance Committee as
provided herein.”
“SECTION 8. Addition to Trust Fund. The Trust Fund

herein constituted may be augmented from time to time
by grants, donations or other lawful transfers by the
Government of the Republic of the Philippines, or any
other public or private entity, the disposition of the
principal and/or income of which shall likewise be
governed by the provisions hereof, or such special
terms and conditions as may be imposed in the
particular deed, bequest or other instrument of transfer
covering such grants, donations or other transfers, and
agreed to by the Trustee. Any unused earnings may be
capitalized to increase the principal of the Fund. In line
herewith, the Trustee is hereby authorized to
101
Office of the President, Amending Executive Order No. 156, Dated November 5,
1968, Entitled, “Constituting the Fund for Assistance to Private Education as an
Irrevocable Trust Fund, Creating a Private Education Assistance Committee as Trustee,
and Providing for the Management Thereof”, Executive Order No. 163 [E.O. No. 163]
(December 20, 1968).
102
Office of the President, Amending Executive Order No. 156, Series of 1968, as
Amended by Executive Order No. 163, Series of 1968, Entitled, Constituting the “Fund
for Assistance to Private Education” as an Irrevocable Trust Fund, Creating a “Private
Education Assistance Committee” as Trustee, and Providing for the Management
Thereof, Executive Order No. 150 [E.O. No. 150] (January 10, 1994).
Page 63 PAO-2018-02
receive and accept donation, contributions and

other grants from the agencies and
instrumentalities of the Philippine Government
including government-owned and controlled
corporations.”
Because of the As early as 1969 or barely a year since the creation of PEAC,
confusing nature of the Secretary of Education sought the assistance of the DOJ to
E.O. No. 156, s. determine the juridical personality of PEAC. So far, there have
1968, barely a year only been three (3) DOJ Opinions which interpreted the juridical
personality of the aforementioned entities. These are:
after PEAC’s
creation, DepEd 1. DOJ Unnumbered Opinion dated January 14, 1969;
already sought the 2. DOJ Unnumbered Opinion dated January 16, 1969; and
aid of the DOJ to 3. DOJ Opinion No. 056, s. 1999 dated July 20, 1999.
interpret its
provisions Instead of making things clearer, these DOJ opinions provide a
hanging interpretation of the PEAC’s juridical personality.
Essentially, the DOJ opined that:
1. FAPE is an irrevocable trust fund;

2. PEAC is a trustee;
3. FAPE and PEAC is neither a corporate nor government
entity; and
4. PEAC can make legitimate disbursements and enter into
contracts only for the purpose of administering the
FAPE.
Apart from being vague, there are interpretations in the DOJ

opinions which are amended and/or repealed. Agencies,
especially DepEd, should take caution in relying on these
documents.
Effects of the Since no Supreme Court decision have delved into this
confusion as the discussion, members of PEAC have relied on the DOJ
legal personality of opinions. Due to this reliance, even PEAC itself is confused with
the PEAC its juridical personality. Despite the fact that it was created
through an EO, members of the PEAC have agreed to take the
position that it is a private corporation performing public
functions. In its 315th regular meeting dated February 22, 2017,
held at the Savannah Room, Discovery Suites, Pasig City, the
members have agreed on the following:
Based on issuances and decisions (e.g. 1969 DOJ

Opinion), positions taken are as follows: FAPE is not a
public fund since it does [not] pertain to a government
agency, but a private fund constituted for assistance to
private education; and PEAC is a private entity
performing public functions (i.e. administering FAPE).
Page 64 PAO-2018-02
These positions, however, are the opposite of the

Sandiganbayan decision.
Steps have been taken to clarify that PEAC is the

trustee of FAPE and FAPE is not an organization but a
trust fund for private education. Also, the fund level has
been restored and for transparency an annual report
with audited financial statement will be submitted to the
Office of the President and other stakeholders.
Current functions of Despite issues with PEAC’s juridical personality, it has been
PEAC as mandated by Congress, through the GAA to co-manage
mandated by the GASTPE programs with the DepEd. There have been two
GAA versions of the provision in the GAA which authorized PEAC to
co-manage GASTPE. The first is the provisions under 2015 and
earlier and second is the provision in 2016 and later.
Special Provision No. 16, DepEd, of RA No. 10651 or the GAA

of 2015 reads:
16. Government Assistance to Students and Teachers

in Private Education. The Government Assistance to
Students and Teachers in Private Education (GASTPE)
Program shall now cover only the Education Service
Contracting (ESC) System. The DepEd and Fund
Assistance to Private Education (FAPE) shall
streamline the implementation of the ESC to graduates
of elementary schools coming from areas where there
are congested public secondary schools, with priority
given to graduates of public elementary schools.
Likewise, the DepEd shall ensure that the ESC
grantees are qualified and deserving students not only
at the time of admission to the program but also during
the continued availment thereof. (Underlining supplied.)
In 2016, the relevant provisions on GASTPE significantly

changed. Apart from providing a more specific breakdown of the
amount that will be spent on voucher programs, FAPE was
replaced by PEAC. Special Provision No. 14 (5), DepEd, of RA
No. 10717 or the GAA of 2016 provides that:
The implementation of the ESC and voucher programs

shall be subject to the issuance of polices and
guidelines by the DepEd and shall be jointly managed
by DepEd and the Private Education Assistance
Committee. (Underlining supplied.)
Page 65 PAO-2018-02
Request of the The Secretary of Education requested COA to comment on the

Secretary of juridical personality of the PEAC. The Secretary wants to know
Education if DepEd should continue transacting with PEAC in view of the
issues with its juridical personality.
Issues In responding to the request of the Secretary, the audit team

arranged its discussion based on the following questions:
1. What is the legal personality of PEAC?

2. Does it have the authority to co-manage GASTPE
program?
3. Can the PEAC be considered a private corporation?
Comments
PEAC is a After looking at the history of the EO creating PEAC and
Committee under carefully studying the applicable laws, we find that the PEAC is
the Office of the a Committee under the Office of the President and it functions
President and it as a government instrumentality, which is subject to the COA’s
functions as a audit jurisdiction.
government
First, it is a committee under the Office of the President. EO
instrumentality, No. 156, s. 1968 as amended is silent as to which agency shall
which is subject to have administrative jurisdiction over PEAC. In the absence of a
the jurisdiction of provision on administrative jurisdiction, Section 17 of the 1987
COA Constitution of the Philippines shall apply. Section 17 provides
that:
The President shall have control of all the executive

departments, bureaus, and offices. He shall ensure that
the laws be faithfully executed.
This provision is the general administrative power of the

President over the executive department.
Second, PEAC functions as a government instrumentality.

The Administrative Code of the Philippines103 defines
instrumentality as follows:
(10) Instrumentality refers to any agency of the National

Government, not integrated within the department
framework vested within special functions or jurisdiction
by law, endowed with some if not all corporate powers,
administering special funds, and enjoying operational
autonomy, usually through a charter. This term includes
regulatory agencies, chartered institutions and
government-owned or controlled corporations.
103
Instituting the “Administrative Code of 1987”, Executive Order No. 292 (1987),
Introductory Provisions § 2.
Page 66 PAO-2018-02
As discussed in the background, PEAC is endowed with some

corporate powers. It is administering special funds. And it is
enjoying operational autonomy. All these functions emanate
from an EO, which is, arguably, its charter.
In interpreting the juridical personality of PEAC, the case of Boy

Scouts of the Philippines v. COA, G.R. No. 177131, June 7,
2011, is instructive.
In this case, the Supreme Court declared the Boys Scouts of

the Philippines BSP as a public corporation, which is subject to
audit jurisdiction of COA.
BSP argued that:
1. RA No. 7278 or the act amending the BSP Charter

eliminated the substantial government participation in its
National Executive Board by removing: (a) the President
of the Philippines and executive secretaries, with the
exception of the Secretary of Education, as members
thereof; and (b) the appointment and confirmation power
of the President of the Philippines, as Chief Scout, over
the member of the said Board; and
2. The government does not have funds invested in the
BSP.
The SC ruled that:
Even though the amended BSP charter did away with

most of the governmental presence in the BSP Board,
this was done to more strongly promote the BSPs
objectives, which were not supported under
Presidential Decree No. 460. The BSP objectives, as
pointed out earlier, are consistent with the public
purpose of the promotion of the well-being of the youth,
the future leaders of the country. The amendments
were not done with the view of changing the character
of the BSP into a privatized corporation. The BSP
remains an agency attached to a department of the
government, the Department of Education, Culture and
Sports, and it was not at all stripped of its public
character.
The ownership and control test is likewise irrelevant for

a public corporation like the BSP. To reiterate, the
relationship of the BSP, an attached agency, to the
government, through the DECS, is defined in the
Revised Administrative Code of 1987. The BSP meets
the minimum statutory requirement of an attached
Page 67 PAO-2018-02
government agency as the DECS Secretary sits at the

BSP Board ex officio, thus facilitating the policy and
program coordination between the BSP and the DECS.
The BSP ruling tells us that the determining factor in deciding

whether an entity is private or public is the nature of its
functions. Since BSP’s functions are impressed with public
interest, the SC decided that it is a public corporation.
Applying the BSP ruling to this matter, based on the

pronouncement of the SC, the PEAC is also a government
entity since its purpose is also impressed with public interest.
Furthermore, the Secretary of Education also sits as an ex-
officio member of PEAC. Like the BSP, PEAC also met the
minimum statutory requirement of an attached government
agency.
Upon presenting this opinion to the DepEd, the Management

expressed concurrence with the above conclusion.
DepEd Management further commented104 that:
It may be added that EO No. 292 further provides for

an expanded definition of an agency under Section 5
(1), Chapter 1, Subtitle A, Title I, Book V, viz:
(1) Agency means any bureau, office,

commission, administration, board, committee,
institute, corporation with original charter,
whether performing governmental or
proprietary function, or any other unit of
the National Government, as well as
provincial, city, or municipal government,
except as hereinafter otherwise provided.
(Emphasis added.)
Moreover, Section 3(a) of Presidential Decree No.

(P.D.) 807 or the “Civil Service Decree of the
Philippines” also defines an agency specifically, viz:
(a) Agency means any bureau, office,

commission, administration, board,
committee, institute, corporation, whether
performing governmental or proprietary
function, or any other unit of the National
Government, as well as provincial, city or
104
Letter from the Department of Education dated February 14, 2019 regarding the
Management’s Comments on the draft Performance Audit Report (PAO-2018-02).
Page 68 PAO-2018-02
municipal government, except as hereinafter

otherwise provided.
At any rate, even assuming arguendo that PEAC is not

an instrumentality or agency as defined above, it
nevertheless falls within the definition of agencies
under the Office of the President under Section 23,
Chapter 8, Title II, Book III of E.O. 292, viz:
Sec. 23. The Agencies under the Office of the

President. - The agencies under the Office of
the President refer to those offices placed
under the chairmanship of the President, those
under the supervision and control of the
President, those under the administrative
supervision of the Office of the President,
those attached to it for policy and program
coordination, and those that are not placed
by law or order creating them under any
specific department. (Emphasis supplied)
Creation of a As mentioned in the earlier discussions, in one of its regular

private corporation meetings, PEAC decided to take the stand that it is a private
through an corporation doing public functions. This interpretation is wrong.
issuance of PEAC could not be considered a private corporation.
executive order
Upon validation, we found that the PEAC is not registered under
violates Section 16 the Securities and Exchange Commission (SEC). Based on the
of Article 12 of the documents submitted by PEAC to the Bureau of Internal
1987 Constitution Revenue, the basis for the former’s existence is E.O. No. 156
as amended by E.O. No. 163, s. 1968, and E.O. No. 150, s.
1994.
Creation of a private corporation through an issuance of EO

violates Section 16 of Article 12 of the 1987 Constitution.
Section 16 of Article 12 of the 1987 Constitution reads:
Sec. 16. The Congress shall not, except by general law,

provide for the formation, organization, or regulation of
private corporations. Government-owned or controlled
corporations may be created or established by special
charters in the interest of the common good and subject
to the test of economic viability.
To be clear, the prohibition under Section 16 of Article 12 of the

1987 Constitution covers all branches of government, not just
the Congress. The SC, in several cases made further
qualification regarding the interpretation of this provision. In
Page 69 PAO-2018-02
Liban v. Gordon citing Feliciano v. Commission on Audit, the SC

stated that “only corporations created under a general law can
qualify as private corporations.” Hence, PEAC cannot qualify as
a private corporation since it is created through an EO.
Assuming for the sake of argument that the PEAC is a Private

Corporation, a number of its current practices will violate various
laws.
First, its inclusion in the GAA would be highly irregular. In effect,

the Congress legislated the award of a government contract to
a private corporation, which is a circumvention of the
procurement law.
Second, DepEd should not automatically award the contracts to

PEAC. Like any other private corporation vying for a
government contract, PEAC will have to undergo the
procurement process.
Lastly, the issue of conflict of interest will arise. Under E.O. No.
156, s. 1968, as amended, the Secretary of Education or his/her
representative shall serve as the Chairperson of PEAC. This will
result in a situation where the Head of the Agency is also a part
of the entity bidding for a contract in the same agency.
Conclusions With ₱86.0 billion budget allotment and more than 80% of the
target grantees/ beneficiaries accommodated, GASTPE
program has helped about 7 million students avail the
government assistance to private education from SYs 2012-
2013 to 2017-2018. However, the existing performance
indicators are not adequate and suitable to assess the level of
success the Program has achieved. While the data on the
number of grantees provide context about the Program’s size
and reach, these outputs are not measure of performance and
effectiveness of the Program.
The budget constraint limits the number of ESC slots annually

and may not totally decongest public JHS taking into
consideration that the share of ESC grantees coming from
public elementary schools has been constantly decreasing. As
the target decongestion level was not defined/established, any
decongestion level achieved by the ESC scheme/ program may
not be measured and assessed. Also, the current allocation of
ESC slots is not based on the pattern of congestion in public
schools. In addition, the DepEd implemented the TSS in ESC-
participating JHSs to improve the quality of the private JHS,
however lack of proper program information on goals and
Page 70 PAO-2018-02
objectives on the TSS casts doubt on the program contribution

in delivering improved quality education.
On the other hand, while the beneficiaries in SHS VP increases

over a short period, there is a low participation and retention
rates among Public High School VPBs that DepEd needs to
look into. Prioritization ranking was not implemented as budget
is more than enough for all applicants with complete
documentation. Furthermore, different modes of SHS delivery
exist among SHS VP-participating schools that may not be
compliant with the SHS VP guidelines. SHS VP-participating
schools are not required to undergo recertification to ensure
delivery of quality education and compliance with the minimum
standards required for the SHS VP-participating schools. While
DepEd conducts NAT, the late and limited administration of
NAT cannot be used to assess performance of these
participating schools for their continued participation in the SHS
VP.
DepEd needs to establish necessary mechanism to ensure

proper administration of the GASTPE program. Though the
Interim PMO or GASTPE Composite Team was created, it does
not perform program monitoring and oversight functions. Thus,
no focal unit in DepEd Central Office handles and manages the
policy formulation, implementation and monitoring of GASTPE
program nationwide.
DepEd also needs to improve information management system

that is critical to data quality and system ownership. Absence of
an approved ISSP exposes DepEd to risks of wastage of IT
resources and non-achievement of goal in rendering efficient
and effective services. Further, absence of an explicit
contractual agreement between DepEd and its partners with
regard to the ownership of the GASTPE applications and its
business processes exposes DepEd to the risk of non-continuity
of the GASTPE program’s operations. Moreover, input control
weaknesses and inadequate data quality management have led
to the creation of inaccurate data, duplicates, and additional
work to correct such data. Likewise, duplicates and data errors
in the LIS, VMS, and ESC-IMS have resulted in delays in the
payment of subsidies to schools and excessive payments from
DepEd due to double billed ESC and SHS VP beneficiaries.
Currently, PEAC manages the vital components of the GASTPE

program such as certification, evaluation and processing of
billing statements, and monitoring of beneficiaries, among
others. However, due to the persisting questions as to the legal
personality of PEAC, DepEd expressed concern as to its
existing relationship with the former. The provision in the GAA
Page 71 PAO-2018-02
mandating PEAC to co-manage GASTPE programs enjoys a

presumption of regularity. Until the Congress deletes it, or the
President vetoes it, or the Supreme Court declares it as
unconstitutional, the DepEd may engage with PEAC to jointly
manage the GASTPE programs. PEAC’s authority to co-
manage GASTPE under the GAA is vulnerable to sudden
changes. And, in the event that it has been proven that PEAC
has no authority to co-implement the GASTPE program, DepEd
will experience difficulty in continuing the Program particularly
in the absence of a dedicated and functional office to handle
GASTPE.
Recommendations As DepEd continues its efforts to provide financial assistance to

private education, there is a need to address the issues
impacting on the efficient, economical and effective
implementation of GASTPE. To be able to measure and assess
the level of success attained by the GASTPE, DepEd should
continue reviewing and fine tuning the performance indicators
and targets in line with the Program goals and objectives. This
way, progress towards attainment of Program goals and
objectives can be tracked.
In line with objective of decongesting public JHS, DepEd needs

to revisit the basis of ESC slot allocations and modify
accordingly, as necessary. There is a need for DepEd to set up
a mechanism to increase awareness of target beneficiaries and
key stakeholders of the program to attain the annual target of
ESC grantees, and correct the misconception about the
program and increase the number of private JHS participating
in the program for accessibility to intended beneficiaries.
DepEd should incorporate in the comprehensive ESC

guidelines intended for issuance in the incoming school year the
detailed guidelines on application and selection of grantees as
well as the entitlement and application of ESC subsidy to
applicants availing of school’s scholarship program. To
maximize the program benefits to grantees, DepEd has to
address the gaps causing completion rates to fall below target
rates.
For SHS VP, DepEd should review the different modes of

delivery by participating schools and the guidelines on the
issuance of permit of non-DepEd schools offering SHS program
necessary for the issuance of policy promoting compliance with
relevant program guidelines. DepEd should also issue and
implement policy on accreditation of SHS providers and in
Page 72 PAO-2018-02
collaboration with PEAC, pursue certification process in 2019 to

ensure delivery of quality education.
In line with program objectives, DepEd has to address the low

VPB retention rates of students from public JHS. It needs to
review the current policies and procedures with the end view of
putting in place a stronger mechanism for selecting
underprivileged and less fortunate deserving students to avail
higher subsidy to lessen top-ups. Likewise, DepEd should
address the procurement issues which cause delay in the
administration of NAT (to be renamed Basic Education Exit
Assessment) and implement accordingly the Policy Guidelines
on Systems Assessment in the K to 12 Basic Education
Program.
Regarding TSS program, DepEd should provide policy

guidelines relating to information dissemination, subsidy
utilization, and assessment of program towards the
achievement of program goals.
DepEd should pay PEAC in accordance with the terms of

payment stipulated in the MOA between DepEd and PEAC to
ensure that payments are based on the services actually
rendered by PEAC. It should also require PEAC to perform
complete field validation and monitoring on the target number
of SHS VP-participating schools per year.
To ensure continuity and support to information systems

relating to GASTPE, prioritize the approval of DepEd’s ISSP
and revisit relevant provisions in the MOA and other
agreements between DepEd and PEAC regarding technology
transfer, ownership, and property rights of systems and
databases maintained by PEAC. It is also recommended that
DepEd should continue enhancing controls in the creation of
data/ records as well as housekeeping of databases used in the
billing and processing of payments under the GASTPE.
In the next issuance of guidelines and policies, the respective

roles and functions of different DepEd offices in relation to the
implementation of GASTPE should be clearly defined. Also,
pursue the formulation of a standard independent monitoring
mechanism for PEAC, participating private schools and
students. Lastly, DepEd should convene immediately the
GASTPE Composite Team and thereafter work for the
establishment of a dedicated and functional office to manage
GASTPE.
It is acknowledged that initial actions have been recognized to

address the gaps identified in the audit. Moving forward,
Page 73 PAO-2018-02
Appendix I: Objectives,
Scope and Methodology
COA has conducted performance audits to help government

agencies better perform their mandates and achieve program
goals and objectives more economically, efficiently and
effectively. It identified the GASTPE program of the DepEd as
one of the priority programs, which will be audited. In addition,
the Secretary of Education requested COA to audit the
management of the GASTPE by the PEAC. Accordingly, the
team’s audit focus was only directed to the ESC scheme/
program, TSS, and SHS VP implemented by the DepEd. The
audit aimed to determine: (1) the extent the GASTPE program
achieved its goals and objectives; (2) the extent the DepEd
ensure that the neediest are prioritized to receive the benefits;
and (3) the extent the DepEd ensure proper administration of
the Program.
We reviewed documentation related to GASTPE program, such

as Physical Report of Operations and Basic Education Statistics
Report covering Program implementation from 2012-2017 to
determine the extent the Program achieved its goals and
objectives. We also reviewed applicable laws, rules and
regulations related to GASTPE program. In addition, we
reviewed documentation on the monitoring efforts of PEAC
submitted to DepEd.
To determine the extent the DepEd ensures that the neediest

are prioritized to receive the benefits, we reviewed DOs to
determine and understand the beneficiary selection process of
GASTPE program. We also interviewed School Committee
representative, such as school heads and principals from
sample schools, responsible for beneficiary selection.
Furthermore, we obtained masterlists of grantees from sample
schools and determine the distribution of grants to public and
private school students.
We also conducted a national survey to gauge how well does

the public know about the GASTPE program.
Lastly, we evaluated the ESC-IMS and VMS as well as DepEd

related information systems by looking at database integrity,
security, and input controls to determine the extent the Program
used reliable data to allocate its funds. We also looked for
duplicate entries and outliers. In addition, we interviewed end-
users of the ESC-IMS and VMS in order to have an idea how
the information system affected GASTPE program operations.
Page 75 PAO-2018-02
Appendix I: Objectives, Scope and Methodology
We have determined that the data used in this report were

sufficiently reliable to assess the status and condition of the
GASTPE program implemented by the DepEd.
We conducted the audit from May 2018 to August 2018 in

accordance with the Standard for Performance Auditing as
embodied in the International Standards of Supreme Audit
Institutions (ISSAI) 3000. The standard requires that we plan
and perform the audit to obtain sufficient and appropriate
evidence to provide a reasonable basis for our findings and
conclusions based on our audit objectives. We believe that the
evidence obtained provides a reasonable basis for our findings
and conclusions.
Page 76 PAO-2018-02
Appendix II: Educational

Service Contracting (ESC)
Scheme/ Program
ESC is a partnership program by DepEd aimed at decongesting
overcrowded public JHSs. In ESC, the excess capacities of
certified private JHSs are “contracted” through slot allocations
for students who would otherwise have gone to public schools.
The slots come with subsidies called ESC grants, and program
beneficiaries are called ESC grantees.109
The ESC was a response to stresses and strains at the high

school level in both the public and private school sectors in the
‘70s up to the mid-80s. With the looming congestion problem,
the Ministry of Education, Culture and Sports, now known as the
DepEd, commissioned PEAC to conduct a feasibility study on
the ESC and later pilot trials in Region VIII, in coordination with
the Eastern Visayas Association of Private Schools, and in
Region XII, in coordination with the Notre Dame Educational
Association. The results showed that the ESC was a cost-
effective way of delivering education.
In recognition of its viability, the ESC was allocated five million

pesos in the 1986 budget as one of the thrusts of DepEd. And
in 1989, the ESC was institutionalized as one of the GASTPE
programs110 through the enactment of RA No. 6728 or the
GASTPE Act of 1989.
As shown in Figure 13, the ESC aims to:

1. Make quality JHS education accessible by providing
financial assistance to deserving elementary school
graduates who wish to study JHS in private schools;
2. Help to decongest public JHSs;
3. Assure grantees financial assistance throughout JHS as
long as they meet the requirements for regular
promotion in each grade level; and
4. Demonstrate public-private partnership in education and
this partnership is sought in all levels of the program’s
operations.111
109
DO No. 20, s. 2017, § III, p. 1.
110
PEAC, Education Service Contracting, Available at http://peac.org.ph/educational-
service-contracting-esc/ (Last accessed: May 23, 2018).
111
DO No. 20, s. 2017, § IV, p. 2.
Page 77 PAO-2018-02
Appendix II: Educational Service Contracting (ESC) Scheme/

Program
Figure 13: ESC Scheme/ Program Objectives
Accessible
Quality
Education
Public- Decongest
Private
Partnership
ESC Public
JHS
Assistance
throughout
JHS
Source: DepEd DO No. 20, s. 2017, p.2
Terms of the ESC Grant
The ESC grant covers four years of JHS starting from Grade 7
even if the grantees are enrolled in delivery modes where JHS
extends beyond four years. No new ESC grants are awarded at
higher grade levels. The grant remains in force for the next
school year if the grantee is promoted to the next grade level
and enrolls in an ESC-participating JHS. No maintaining grades
are required of grantees within a school year. The grant is
terminated if a grantee does any of the following:
Figure 14: Reasons for Termination from ESC Scheme/

Program
Drop out in the middle of Fail to be promoted to the Suspended for more than
the School Year, or next grade level or are two weeks, dismissed or Transfer to a non-ESC-
Do not re-enroll in the retained in the same expelled for disciplinary participating JHS
following school year grade level reasons
Source: DepEd, DOs from SYs 2012-2013 to 2017-2018
In SYs 2012-2013 to 2016-2017, transfers to another ESC-

participating JHS were allowed except transfers from outside
NCR into NCR. And in SY 2017-2018, transfers from and into
Page 78 PAO-2018-02

Program
NCR were permitted.112 In cases when the applicable subsidy

amount of the releasing school is different from that of the
accepting school, the accepting school will be paid the lower of
the two applicable subsidy amounts.
On the other hand, grantees who dropped out due to prolonged

illness, accident, force majeure, or death of a parent or guardian
may be reinstated in the ESC program, provided they submit
relevant documents to PEAC. The documents to be submitted
are to support their claim, i.e. for illness, a medical certificate
issued by a licensed medical doctor.113
Slot Allocation
Slot allocations are based on the capacity of schools to

accommodate grantees (fixed slots), with more slots awarded
for demonstrated quality (incentive slots). For SYs 2012-2013
to 2017-2018, the slot allocation schedule is summarized in
Table 8.
The slot allocation posted in the school’s ESC IMS accounts is

considered final114 and requests for more slots shall not be
entertained given that total slot allocations for each participating
school has been predetermined.115
Selection of Grantees
ESC-participating JHS shall give preference to graduates of

public elementary schools. The School Committee shall profile
and assess the students considered for ESC grants and select
grantees based on need, given the limited slots allocated to the
school.116
Amount of ESC Grant
The amount of the grant depends on the location of the ESC-

participating JHS and is quoted per ESC grantee per SY. It is
paid to the school and remains the same over its four-year term,
unless adjustments are approved by the State Assistance
112
113
114
DO No. 20, s. 2017, § VII (B) (3), p. 6.
115
116
Page 79 PAO-2018-02

Program
Council. The amounts of the grant from SYs 2012-2013 to 2017-

2018 are shown below.
Table 30: Amount of ESC Grants117
Year Location Grade Level Amount of Grant

NCR 1st to 4th Year ₱ 10,000
2012 1st Year 6,500
Outside NCR
2nd to 4th Year 5,500
NCR 1st to 4th Year 10,000
2013 1st to 2nd Year 6,500
Outside NCR
3rd to 4th Year 5,500
NCR Grades 7 to 10 10,000
Grade 7 7,500
2014
Outside NCR Grades 8 to 9 6,500
Grade 10 5,500
2015 Grades 7 to 8 7,500
Outside NCR
Grades 9 to 10 6,500
Grades 7 to 8 11,000
NCR
Grades 9 to 10 10,000
2016 Grades 7 to 8 8,500
Outside NCR Grade 9 7,500
Grade 10 6,500
Grade 7 13,000
Grade 10 10,000
Grade 7 11,000
HUCs Outside
2017 Grades 8 to 9 8,500
NCR
Grade 10 7,500
Grade 7 9,000
Outside NCR Grades 8 to 9 8,500
Grade 10 7,500
Source: DepEd, DOs from SYs 2012-2013 to 2017-2018
However, if the total school fees declared by the school in the

ESC IMS are lower than the amount of the ESC grant, the
school will only be paid the total school fees.
The higher subsidy for NCR grantees is in recognition of the fact

that private school tuition and all other fees are much higher in
NCR than in the rest of the country.118
117
Ibid.
118
Page 80 PAO-2018-02
Appendix III: Senior High

School Voucher Program
(SHS VP)
In 2013, RA No. 10533, otherwise known as the Enhanced
Basic Education Act of 2013,119 was signed into law which
formalized the K to 12 Basic Education Program. From the
former ten-year basic education curriculum, the K to 12
Program mandates one year of kindergarten and 12 years of
basic education, comprising of six years of elementary
education and six years secondary education, i.e. four years of
JHS and two years of SHS. Recognizing the need for additional
support to students due to added two years in basic education,
the government explicitly expands the coverage of the RA 8545,
otherwise known as the E-GASTPE, to include and provide
financial assistance to qualified grade 10 completers120 entering
SHS.121 This is based on students’ right to state-funded
education and to boost the number of SHS graduates by
providing financial support to students. K-to-12 further
mandates the DepEd to formulate programs to enact the
abovementioned provision of the law. In line with this, DepEd
DO No. 11 series of 2015 introduced the SHS VP as a
mechanism to provide financial assistance to SHS students.122
The voucher program design is aligned with the E-GASTPE
Law, which provides that the subsidy value should not exceed
the cost of public provision.123
The SHS VP intends to:

1. Uphold the right to quality basic education and increase
access in SHS;
2. Increase the diversity of SHS providers beyond the
current configuration. This in turn will engender a more
dynamic system with schools deciding and innovating
on their own;
3. Provide greater choice to students and their families in
deciding the SHS program that caters to their needs and
career goals;
4. Relieve DepEd from the institutional pressures of
providing SHS directly through DepEd schools within a
very short period of time;
119
RA No. 10533 dated May 15, 2013, refers to an act enhancing the Philippine Basic
Education System by strengthening its curriculum and increasing the number of years
for basic education, appropriating funds therefor and for other purposes.
120
Grade 10 completers refers to students currently in Grade 10 and expected to
complete JHS at the end of the school year.
121
DO No. 46, s. 2015, Legal Bases, Par. 2, p. 2.
122
Ibid. Legal Bases, Par. 3, p. 2.
123
DO No. 11, s. 2015, § 5, p. 4.
Page 81 PAO-2018-02
Appendix III: Senior High School Voucher Program (SHS VP)
5. Ease the financial impact on higher educational

institutions that will experience reduced enrollment in
the first few years of SHS implementation. 124
The first three objectives ultimately lead to the very purpose of

K to 12 reforms: quality, accessible, and relevant education.
Figure 15: SHS VP Objectives
Quality
Basic
Education
Ease
Diversity
Financial
and
Impact on
Dynamism
HEI
SHS
VP
Relieve
DepEd from Greater
Institutional Choice
Pressure
Source: DepEd DO No. 66, s. 2016
All these, DepEd intends to implement a voucher125-type

subsidy mechanism to enable 30-40 per cent of its students to
enroll in non-DepEd SHS126, including private JHSs, private
HEIs, SUCs and LUCs, and TVIs. This public-private
partnership would serve to decongest public schools, reduce or
delay the need to construct DepEd SHS facilities and hire
government teachers, provide less affluent students more
options for SHS education127, and to provide private schools
124
DepEd, Department Order No. 66, Series of 2016 [DO No. 66, s. 2016], § III, p. 2
(October 28, 2016).
125
Voucher refers to a subsidy given by the State to qualified Grade 10 completers to
enable them to enroll in a non-DepEd SHS of their choice. The assistance is meant to
defray the cost of total school fees charged by a non-DepEd SHS. The entitlement is
not given to the student as cash; DepEd instead pays directly to the non-DepEd SHS
where student enrolls.
126
Non-DepEd SHS refers to educational provider not directly operated by DepEd, but
granted by DepEd with a permit to operate SHS. This includes private high school,
private colleges and universities, SUCs, LUCs, and technical and vocational institutions.
127
DO No. 11, s. 2015, § 3, p. 3.
Page 82 PAO-2018-02
with the financial resources needed to transition to a 12-year

basic education system. Through the SHS VP, the government
continues to recognize the invaluable contributions of the
private education sector in the equitable delivery of relevant and
high quality education.128
As such, the SHS VP is envisioned to be a long-term program

of the government that will empower students with the choice to
pursue their desired SHS education.
Eligibility
Students who completed Grade 10 in the school year may

participate in the SHS Voucher Program. Grade 10 completers
are subdivided into automatically qualified students and
voucher applicants. Students falling under the categories A, B
and C automatically qualify for vouchers. All Grade 10 JHS
completers of Public JHSs (Category A) and SUCs / LUCs JHSs
(Category B), and Grade 10 Education Service Contracting
(ESC) Grantees who completed their JHS in ESC-Participating
schools (Category C) are QVRs. They do not need to apply for
vouchers.
Figure 16: SHS VP QVRs
AUTOMATICALLY QUALIFIED STUDENTS

Category Category A:
A&B All Grade 10 completers in Public JHS
PUBLIC Category B:
SHS All Grade 10 completers in SUCs and LUCs
Category C
All Grade 10 completers in private schools
who are Educational Service Contracting
PRIVATE
(ESC) grantees
ESC
VOUCHER APPLICANTS (VAs)
Category D
All Grade 10 completers in private schools
PRIVATE who are not ESC grantees
NON-ESC
Category E Alternative Learning System (ALS)

ALS A&E Test Accreditation and Equivalency (A&E) Test
and PEPT and the Philippine Education Placement
passers Test (PEPT) Passers
Source: DepEd, DO No. 60, s. 2017
128
DO No. 46, s. 2015, Legal Bases, Par. 5, p. 2.
Page 83 PAO-2018-02
On the other hand, students falling under Category D or all non‐

ESC Grade 10 completers from Private JHSs who wish to avail
of vouchers shall be required to apply for vouchers and are thus
termed as voucher applicants. In addition, students falling under
Category E or students who took/will take the Alternative
Learning System A&E Test and the Philippine Education
Placement Test (PEPT) in the current school year and passed
and have been certified for admission to Grade 11 in SY 2018-
2019, provided that they received their certification not later
than May 31, 2018, may also apply for the SHS VP.129 These
applicants will undergo assessment of their socioeconomic
status130 and when deemed qualified are then considered
QVRs.
Application Process for VAs
Students who are under Categories A, B and C are not required

to apply for vouchers. They are considered pre-QVRs and may
directly enroll and redeem the voucher in any Non‐DepEd SHS
Provider of their choice provided they meet the school’s
admission requirements. Upon requirement of the VP-
participating SHS a QVR wishes to enroll in, the following
documents may be submitted by the QVR as evidence of the
QVR's status: (1) Category A and B – Report Card bearing a
LRN; and (2) Category C – ESC Certificate.131
Only students under the categories D and E are needed to apply

to avail the voucher. Students belonging to Category E can
apply through the manual application procedure132, while
Category D can apply manually or online and are free of charge.
The student needs to accomplish the Voucher Application Form
(VAF-1) available in the DepEd Division Offices, JHSs and non-
DepEd SHS Providers, and can also be accessed through the
OVAP.
129
DO No. 60, s. 2017, § VI (A) (2), p. 4.
130
DO No. 46, s. 2015, § I (B), p. 3.
131
DepEd, Department Order No. 19, Series of 2017 [DO No. 19, s. 2017], § VI, p. 5
(April 20, 2017).
132
DO No. 60, s. 2017, § VI (A) (2), p. 4.
Page 84 PAO-2018-02
Figure 17: SHS VP Voucher Application Process per Student Category

Category
Student redeems
PUBLIC
A&B
SHS
voucher by enrolling
at a non-DepEd SHS.
Category C
PRIVATE
Student redeems
ESC
voucher by enrolling
at a non-DepEd SHS.
Step 1: Step 2: Step 3: Step 4:

Category D
NON-ESC
PRIVATE
Student completes Submit the VAF-1 Student tracks the Student redeems
the Voucher and supporting docs status and/or release voucher by enrolling
Application Form to PEAC National of result of his/her at a non-DepEd SHS.
(VAF-1) Secretariat application in OVAP
Step 1: Step 2: Step 3: Step 4:
Category E
ALS A&E
Test and
Student completes Submit the VAF-1 Student tracks the Student redeems
PEPT
the Voucher and supporting docs status and/or release voucher by enrolling
Application Form to PEAC National of result of his/her at a non-DepEd SHS.
(VAF-1) Secretariat application in OVAP
Source: DepEd, DO No. 19, s. 2017 dated April 20, 2017, § VI, p. 5
In addition, the student needs to complete the following

supporting documents:
1. Certificate of Financial Assistance from the School, if

applicable
2. Recent Identical 2x2 ID photo
3. Philippine Statistics Authority (PSA) Certified Birth
Certificate
4. Photocopy of Grade 10 Report Card
5. Certificate of Employment of Parent/Guardian, if
applicable
6. Latest Income Tax Return of Parents/Legal Guardian or
Certification of Tax Exemption or Municipal Certification
of Unemployment.
The accomplished VAF-1 form or the Printed Online Application

Confirmation Slip together with the supporting documents shall
be submitted to the PEAC National Secretariat.133
It is the responsibility of the VA to ensure that his or her

application is complete and correct, and that it is received on or
before the deadline. Also, it is the responsibility of the VA to
track the status of the application. VAs who applied online can
track the status of their application by accessing their accounts
in OVAP; however, for VAs who submitted manual applications,
133
DO No. 66, s. 2016, § VI (B), p. 4-5.
Page 85 PAO-2018-02
PEAC will publish the list of applications received and the status
of each application at PEAC website. Applications submitted
after the deadline are disqualified and will not be processed.
Applications that were submitted on or before the deadline but
contain false information or are incomplete are likewise
disqualified and will not be processed. PEAC shall process all
and only complete applications submitted on or before the
deadline and forward the result to DepEd for approval.
A qualified applicant is considered a QVR and shall be issued a

QVR Certificate through the OVAP website. Results will be
posted at the OVAP website and these may be accessed by
students, parents, and schools. Link to the results will also be
made available at the PEAC and DepEd websites.134
Subsequently and on a staggered basis, applicants with emails
will be advised of their results through their email addresses.
Applicants without emails will be advised of their results either
by text or regular mail. Results of the voucher applications are
deemed final and not subject to appeal. Once the student has
been notified of his/her application result, he/she can redeem
the voucher by enrolling at a non-DepEd SHS.
Applicable Voucher Values
The applicable voucher amount, ranging from ₱8,750 to

₱22,500, depends largely on the location, type, and fees of the
non-DepEd SHS where the QVRs wish to enroll. The category
of the QVR also affects the voucher amount. The maximum
voucher amounts are shown in Figure 18. Voucher amounts
represent the maximum payment a non-DepEd SHS provider
shall be paid per VPB per school year. Non-DepEd SHS will
receive voucher payments based on the total school fees they
charge or the maximum voucher amount applicable, whichever
is lower.135
134
DO No. 60, s. 2017, § VII to IX, p. 6-7.
135
DO No. 66, s. 2016, § IX to X, p. 6.
Page 86 PAO-2018-02
Figure 18: Maximum Applicable Voucher Amount per

Student per School Year
Highly Urbanized
National Capital All other
TYPE OF VPBs Cities (HUCs)
Region (NCR) locations
Category outside of NCR
PUBLIC
A&B
SHS
P 22,500 P 20,000 P17,500
Category E Category D Category C
PRIVATE
ESC
P 18,000 P 16,000 P 14,000

NON-ESC
PRIVATE
P 18,000 P 16,000 P 14,000

ALS A&E
Test and
PEPT
P 18,000 P 16,000 P 14,000
Voucher Amount if the SHS is a

LUC or SUC, regardless of QVR P 11,250 P 10,000 P 8,750
Category
DepEd categorized the voucher value primarily by income class

of locality, to account for variation in the cost of public provision
across municipalities and cities and urban and rural areas.
There are three tiers - NCR, HUCs outside NCR, and non-
HUCs. Within each tier, the voucher value will have sub-tier
according to type of beneficiaries or type of non-DepEd
school.136
Students under Categories A and B, who finish from public JHS

are automatically eligible to receive the full voucher value.
While, Category C or Grade 10 completers who are ESC
grantees from Private JHS, will automatically receive 80 per
cent of full voucher value, and successful voucher applicants
from Categories D and E can avail a voucher that will worth 80
per cent of full voucher value.137
However, VPBs enrolled in SUCs and LUCs are entitled to 50

per cent of the full voucher value in their location, regardless of
the type of beneficiary or the school type where they completed
their JHS.138
136
DO No. 11, s. 2015, § 12, p. 6.
137
DO No. 46, s. 2015, § I (A & B), p. 2-3.
138
DO No. 46, s. 2015, § V, p. 6.
Page 87 PAO-2018-02
The voucher subsidy is not released in cash to the student but

is redeemed by the non-DepEd SHS through direct billing to
DepEd, similar to the ESC scheme/ program. The average
voucher value will approximate the cost to government of public
provision and is calibrated relative to the cost of private JHS.
On a per student basis, the cost of public provision is around
₱18,000, taking into account direct costs such as school
facilities and personnel, including the cost of land.139
Voucher Validity and Redemption
Vouchers shall be redeemed within the first semester of the

school year immediately after JHS completion and shall no
longer be valid if not used within the said period. The SHS VP
covers only two years; regardless of the number of years it takes
the recipient to complete SHS.140
A QVR redeems his/her voucher by the very act of enrolling in

a VP-participating SHS. Upon enrolment, a QVR will inform the
VP-participating SHS of his/her status and present the
necessary documentary evidence. Also, as with any student,
QVRs need to satisfy the requirements for admission set by the
VP-participating SHS. A QVR who successfully enrolls in a VP-
participating SHS becomes a VPB.141
Condition for VPBs
A VPB shall continue to be a participant of the SHS VP if they

are promoted to the next grade level and is enrolled in a Non‐
DepEd SHS Provider. No maintaining grade is required for a
VPB to continue to participate in the SHS VP.
A VPB shall be disqualified from further participation in the SHS

VP for any of the following reasons:
139
DO No. 11, s. 2015, § 12, p. 6.
140
DO No. 46, s. 2015, § II, p. 4.
141
DO No. 19, s. 2017, § VIII, p. 6.
Page 88 PAO-2018-02
Figure 19: Reasons for Disqualification from SHS VP
Drop out in the middle of Fail to be promoted to the

Transfer to another SHS
the School Year, or next grade level or are
within the school year, or
Do not re-enroll in the retained in the same
to a Public SHS
following school year grade level
Also, VPBs are not allowed to transfer to another SHS within

the school year. However, if a VPB decides to transfer to
another Non‐DepEd SHS Provider after the school year, the
VPB may continue to participate in the SHS VP in the accepting
Non‐DepEd SHS Provider. Also, transferring from one voucher
tier location to another is allowed, but the voucher amount to be
received by the VPB in the accepting school shall be the
voucher amount of the accepting school or the voucher amount
from the releasing school, whichever is lower.
In addition, VPBs are allowed to shift to another track or strand

(1) after the 1st Semester of Grade 11 within the same school;
or (2) after Grade 11 whether in the same school or to another
school. VP-participating SHS shall ensure that shifters meet the
required competencies on their new track or strand.142
On the other hand, VPBs who dropped out due to prolonged

illness, accident, force majeure, or death of a parent or guardian
may be reinstated in the SHS VP, provided they submit relevant
documents to PEAC. The documents to be submitted are to
support their claim i.e. for illness, a medical certificate issued by
a licensed medical doctor. Also, involuntary transfers, such as
when a school closes or is terminated from further participation
in the SHS VP, are allowed and considered special cases. Such
cases shall be dealt with individually. VP-participating SHSs
that close shall promptly inform PEAC so that their VPBs are
not disenfranchised.143
142
DO No. 46, s. 2015, § III, p. 5.
143
DO No. 19, s. 2017, § IX, p. 7.
Page 89 PAO-2018-02
Appendix IV: Survey Results
Based on the Sampling and Survey Plan,144 population for the

sample respondents of surveys undertaken for the ESC and
SHS VP was identified from the top four recipients of budget
allocation out of the 17 regions nationwide.
The survey was conducted in the top four regions determined

to have the highest number of grantees and also highest budget
share of the ESC and SHS VP for SY 2017-2018. The top four
regions were selected in Luzon, including the NCR, Visayas and
Mindanao. Upon identification of the regions, the team
determined the top two cities/municipalities in that region which
have highest number of grantees.
The top three schools with the highest number of grantees in

the identified cities/ municipalities were selected. For private
schools, the number of sample students was allocated based
on the proportion of the total grantees of the selected school to
the total number of grantees of all selected schools. The team
also selected samples from the nearby public schools within the
same DepEd division of the private schools. For public schools,
the number of sample students was allocated based on the
proportion of the total grantees of the selected school to the total
number of grantees of all selected schools. Further, one
parent/guardian of each selected sample students from private
and public schools was also subjected in the survey.
For ESC Scheme/ Program (Private School):
Since the scope of the audit is from 2012 to 2017, the survey
collected answers from JHS students belonging from SYs 2012-
2013 to 2017-2018. Based on the audit scope and the
availability of students in JHSs, only Grades 8 to 10 students of
the current school year was subjected to the survey and none
from the Grade 7 as they belong to SY 2018-2019. Sample
students were distributed evenly per each grade level.
144
COA Survey and Sampling Plan for GASTPE program.
Page 90 PAO-2018-02
Figure 20: Results of Survey – ESC Scheme/ Program -

Private School
STUDENTS PARENTS
358 out of 384 are aware of the 367 out of 384 are aware of the
program program
296 out of 384 applied as an ESC 310 out of 384 applied his/her child as
grantee an ESC grantee
amount they are receiving amount they are receiving
159 out of 384 believe that the grant 210 out of 384 believe that the grant
is from DepEd is from DepEd
196 out of 384 attended a school 290 out of 384 attended a school
orientation about ESC scheme/ orientation about ESC scheme/
program program
327 out of 384 say it was their 217 out of 384 say they are not
decision to enrol in private JHS satisfied with the amount of the grant
368 out of 384 believe ESC is helping 370 out of 384 believe ESC is helping
poor access quality education poor access quality education
Page 91 PAO-2018-02
STUDENTS PARENTS
368 out of 384 believe ESC scheme/ 370 out of 384 believe ESC scheme/
program is helping the students to program is helping the students to
graduate graduate
373 out of 384 believe ESC scheme/ 371 out of 384 believe ESC scheme/
program should continue program should continue
Figure 21: Results of Survey – ESC Scheme/ Program -

Public School
STUDENTS PARENTS
313 out of 384 are aware of the ESC 283 out of 374 are aware of the ESC
scheme/ program scheme/ program
58 out of 71 who know about the 45 out of 72 who know about the
program say they didn’t apply due to program say that didn’t apply due to
ow various reasons various reasons
237 out of 313 who are not aware of 197 out of 283 who are not aware of
the program say that they are the program say that they are
interested to avail the ESC grant interested to avail the ESC grant
Page 92 PAO-2018-02
For SHS VP (Private School):
Since the scope of the audit is from 2012 to 2017, the survey
collected answers from SHS students belonging from SY 2016-
2017 to SY 2017-2018. Based on the audit scope and the
availability of students, only Grade 12 students of the current
school year were subjected to the said survey and none from
the Grade 11 as they belong to SY 2018-2019.
Figure 22: Results of Survey – SHS VP - Private School

STUDENTS PARENTS
381 out of 384 say they are aware of 380 out of 364 say they are aware of
the SHS VP the SHS VP
263 out of 384 say they were informed 233 out of 364 say they were informed
thru school assemblies thru school assemblies
373 out of 384 are aware that they are 349 out of 364 are aware that his/her
SHSSTUDE
VP beneficiaries child is a SHS VP beneficiary
STUDENTS
258 out of 384 are aware that it is a PARENTS
280 out of 364 are aware that it is a
DepEd program DepEd program
261 out of 384 attended orientation on 246 out of 364 attended orientation on
the SHS VP the SHS VP
246 out of 384 are satisfied with the 281 out of 364 are aware of the
voucher amount voucher amount
Page 93 PAO-2018-02
STUDENTS PARENTS
369 out of 384 believe SHS VP helps 160 out of 364 are satisfied with the
the poor access quality education voucher amount
375 out of 384 believe SHS VP helps 345 out of 364 believe SHS VP helps
students to attend school and to the poor access quality education
graduate
371 out of 384 say that their teachers 350 out of 364 believe SHS VP helps
are qualified for their course/track students to attend school and to
graduate
376 out of 384 want to continue their 354 out of 364 want their children to
education until college continue their education until college
370 out of 384 believe the SHS VP 347 out of 364 believe the SHS VP
should continue should continue
Figure 23: Results of Survey – SHS VP - Public School

STUDENTS PARENTS
SHS VP SHS VP
250 out of 352 were informed thru 187 out of 272 were informed thru
school assembly school assembly
Page 94 PAO-2018-02
STUDENTS PARENTS
322 out of 352 who know about the 183 out of 272 who know about the
SHS VP say that they didn’t apply as SHS VP say that they didn’t apply
a beneficiary due to various reasons his/her child as a beneficiary due to
various reasons
31 out of 32 who are not aware of the 42 out of 55 who are not aware of the
program say that they are interested program say that they are interested
to avail the voucher amount to avail the voucher amount
Page 95 PAO-2018-02
Appendix V: Relevant Tables
Table 31: Distribution of ESC Slots to Public Elementary School Graduates from
Schools Visited
2017
ESC
Grantees Per City/ Per
Municipality/ Total No. Per
Region Province School from Municipality Region
City of ESC School
Public (Average) (Average)
Grantees (in %)
Elementary (in %) (in %)
Schools
LUZON
NCR Quezon City 1 302 166 54.97
2 270 76 28.15 43.98
3 242 116 47.93
46.10
Manila 4 459 135 29.41
5 346 243 70.23 47.61
6 344 169 49.13
Region IV-A
Cavite Dasmarinas 7 313 220 70.29
(CALABARZON)
59.97
8 204 106 51.96
9 100 44 44.00
Silang 10 50 49 98.00
11 216 215 99.54 82.45
12 241 154 63.90 65.59
Laguna Calamba City 13 347 207 59.65
14 290 174 60.00 62.94
15 248 176 70.97
Binan 16 123 33 26.83
17 287 241 83.97 61.30
18 223 114 51.12
VISAYAS
Region VII (Central
Cebu Cebu City 19 811 609 75.09
Visayas)
57.44
20 389 58 14.91
21 372 236 63.44
Talisay City 22 129 38 29.46
23 308 209 67.86 65.83
24 239 198 82.85
63.00
Tagbilaran
Bohol 25 387 215 55.56
City
53.32
26 185 124 67.03
27 120 30 25.00
Tubigon 28 271 256 94.46
29 158 157 99.37 88.76
30 96 53 55.21
MINDANAO
Region X (Northern
Bukidnon Valencia City 31 226 169 74.78
Mindanao)
89.07
32 172 170 98.84
33 160 158 98.75
Kibawe 34 311 305 98.07
35 153 148 96.73 98.16
36 133 133 100.00
84.00
Misamis Cagayan de
37 209 142 67.94
Oriental Oro City
64.76
38 185 100 54.05
39 182 131 71.98
Balingasag 40 240 232 96.67
41 211 158 74.88 83.60
42 43 23 53.49
Source: COA Analysis of Sample Schools’ Data
Page 96 PAO-2018-02
Table 32: Enrolment of JHS
School SUCs/
Grade Level Public JHS Private JHS Total
Year LUCs
Grade 7 Not Not Not Not
available available available available
Grade 8 -do- -do- -do- -do-
2012-2013 Grade 9 -do- -do- -do- -do-
Grade 10 -do- -do- -do- -do-
Non-graded -do- -do- -do- -do-
Total 5,641,898 1,421,081 60,699 7,123,678
Grade 7 1,674,201 363,690 11,120 2,049,011
Grade 8 1,519,467 354,894 10,981 1,885,342
Grade 9 1,363,806 336,591 11,597 1,711,994
2013-2014
Grade 10 1,210,973 333,845 11,607 1,556,425
Non-graded 4,131 8,921 77 13,129
Total 5,772,578 1,397,941 45,382 7,215,901
Grade 7 1,687,500 347,181 8,627 2,043,308
Grade 8 1,562,087 344,357 8,489 1,914,933
Grade 9 1,394,064 330,793 8,896 1,733,753
2014-2015
Grade 10 1,277,001 321,451 9,377 1,607,829
Non-graded 7,390 9,538 - 16,928
Total 5,928,042 1,353,320 35,389 7,316,751
Grade 7 1,713,333 343,836 12,600 2,069,769
Grade 8 1,581,325 334,510 11,135 1,926,970
Grade 9 1,449,567 330,552 9,997 1,790,116
2015-2016
Grade 10 1,260,908 315,339 10,171 1,586,418
Non-graded 7,628 13,149 - 20,777
Total 6,012,761 1,337,386 43,903 7,394,050
Grade 7 1,782,780 355,166 12,766 2,150,712
Grade 8 1,609,838 337,722 11,571 1,959,131
Grade 9 1,467,669 324,058 10,992 1,802,719
2016-2017
Grade 10 1,315,661 316,895 10,375 1,642,931
Non-graded 1,928 7,318 88 9,334
Total 6,177,876 1,341,159 45,792 7,564,827
Grade 7 1,862,178 368,557 12,973 2,243,708
Grade 8 1,670,380 346,861 12,384 2,029,625
Grade 9 1,513,564 330,175 11,617 1,855,356
2017-2018
Grade 10 1,363,205 317,537 11,520 1,692,262
Non-graded 2,906 2,554 3 5,463
Total 6,412,233 1,365,684 48,497 7,826,414
Source: DepEd Data
Page 97 PAO-2018-02
Table 33: Percentage Share of Enrolment in Public JHSs and of ESC Slot Allocation and the Ranking, ESC-Participating
Schools and Participation Rate of Private Schools, by RegionA
2013 2014 2015
Schools (in %)
Schools (in %)
Schools (in %)
Schools (in %)
Participating
Participation
Participating
Participation
Enrolment
Enrolment
Enrolment
Allocation
Allocation
Allocation
Region
Rate of
Rate of
Private
Private
(in %)
(in %)
(in %)
(in %)
(in %)
(in %)
ESC -
ESC -
Rank
Rank
Rank
Rank
Rank
Rank
ESC
ESC
ESC
Luzon
I 5.32 7 6.06 6 5.29 7 6.48 6 7.34 70.59 5.23 7 6.38 6 7.36 72.88
II 3.37 12 3.95 11 3.33 13 4.28 11 4.03 75.17 3.32 13 4.01 11 3.90 80.85
III 11.32 3 13.76 2 11.26 3 13.46 2 12.73 50.43 11.12 3 13.11 2 12.71 52.40
CAR 1.76 17 2.80 14 1.76 17 3.21 13 2.70 55.97 1.76 17 3.08 12 2.60 57.58
NCR 12.58 2 6.55 4 12.25 2 7.95 4 8.09 27.34 12.06 2 9.03 3 8.60 30.24
IV-A 14.02 1 15.15 1 14.05 1 14.19 1 15.18 33.95 14.09 1 14.97 1 16.10 36.81
IV-B 3.23 14 2.96 13 3.25 14 2.98 14 3.02 73.04 3.31 14 2.64 14 2.95 72.27
V 6.60 6 5.72 8 6.73 6 5.61 9 4.64 68.98 6.75 6 5.60 8 4.38 68.82
Visayas
V 7.71 4 6.45 5 7.74 4 6.61 5 7.70 71.10 7.70 5 6.48 5 7.47 70.10
VII 7.68 5 9.03 3 7.67 5 8.41 3 6.80 46.78 7.77 4 8.17 4 6.99 48.80
VIII 4.88 8 3.80 12 4.84 8 3.23 12 3.53 77.17 4.89 8 3.06 13 3.32 77.60
Mindanao
IX 3.34 13 2.60 17 3.41 12 2.57 15 2.70 78.13 3.50 12 2.31 17 2.74 77.67
X 4.23 10 5.05 9 4.34 11 5.62 8 5.79 54.39 4.36 11 5.76 7 5.72 60.95
XI 4.38 9 5.00 10 4.51 9 4.77 10 5.36 74.13 4.60 9 4.85 10 5.14 72.82
XII 4.16 11 5.82 7 4.38 10 5.83 7 5.65 83.51 4.40 10 5.54 9 5.41 83.16
CARAGA 2.66 16 2.68 15 2.72 15 2.44 16 2.55 73.96 2.75 15 2.45 16 2.57 78.95
ARMM 2.77 15 2.63 16 2.44 16 2.35 17 2.19 75.31 2.40 16 2.56 15 2.05 73.17
Total 100.00 100.00 100.00 100.00 100.00 51.18 100.00 100.00 100.00 53.17
A
No enrolment and ESC-participating schools data by region for SY 2012-2013. No ESC-participating schools data by region for SY 2013-2014. No ESC Allocation data by region for SYs 2016-2017 and 2017-2018.
Source: COA Analysis of DepEd Data
Page 98 PAO-2018-02
Table 34: Subsidy Ratio

2016 2017
Subsidy Ratio Subsidy Ratio
Municipality/ Average Average Per City/ Per Average Average Per City/ Per
Region Province School
City School Grant Per School Municipality Region School Grant Per School Municipality Region
Fees Amount (in %) (Average) (Average) Fees Amount (in %) (Average) (Average)
(in %) (in %) (in %) (in %)
LUZON
NCR Quezon City 1 31,000 10,500 33.87 32,863 11,250 34.23
2 32,306 10,500 32.50 27.2 37,274 11,250 30.18 27.2
3 52,444 10,500 20.02 54,066 11,250 20.81
29.8 30.1
Manila 4 43,771 10,500 23.99 44,176 11,250 25.47
5 16,315 10,500 64.36 33.0 18,340 11,250 61.34 33.7
6 35,456 10,500 29.61 37,571 11,250 29.94
Region IV-A Cavite Dasmarinas 7 21,225 7,750 36.51 23,400 8,375 35.79
(CALABARZON) 8 16,250 7,750 47.69 42.1 16,750 8,375 50.00 43.4
9 17,750 7,750 43.66 17,750 8,375 47.18
Silang 10 27,479 7,750 28.20 29,749. 8,375 28.15
11 46,042 7,750 16.83 23.4 46,042 8,375 18.19 24.0
12 25,725 7,750 30.13 28,843 8,375 29.04
30.5 31.2
Laguna Calamba City 13 27,255 7,750 28.43 27,342 8,375 30.63
14 23,142 7,750 33.49 31.5 25,456 8,375 32.90 31.9
15 23,437 7,750 33.07 25,937 8,375 32.29
Binan 16 42,321 7,750 18.31 44,227 8,375 18.94
17 14,935 7,750 51.89 30.2 14,935 8,375 56.08 31.1
18 19,843 7,750 39.06 21,518 8,375 38.92
VISAYAS
Region VII (Central Cebu Cebu City 19 18,763 7,750 41.30 20,646 8,875 42.99
Visayas) 20 52,189 7,750 14.85 23.3 52,206 8,875 17.00 25.9
21 28,933 7,750 26.79 30,137 8,875 29.45
Talisay City 22 26,939 7,750 28.77 30,540 8,375 27.42
23 29,982 7,750 25.85 33.7 33.8 32,598 8,375 25.69 32.9 33.9
24 12,050 7,750 64.32 13,250 8,375 63.21
Bohol Tagbilaran 25 28,464 7,750 27.23 30,120 8,375 27.81
City 26 19,512 7,750 39.72 31.8 21,368 8,375 39.19 29.6
27 25,177 7,750 30.78 33,523 8,375 24.98
Page 99 PAO-2018-02
Continuation of Table 34: Subsidy Ratio

2016 2017
Subsidy Ratio Subsidy Ratio
Municipality/ Average Average Per City/ Per Average Average Per City/ Per
Region Province School
City School Grant Per School Municipality Region School Grant Per School Municipality Region
Fees Amount (in %) (Average) (Average) Fees Amount (in %) (Average) (Average)
(in %) (in %) (in %) (in %)
Tubigon 28 10,990 7,750 70.52 11,915 8,375 70.29
29 7,825 7,750 99.04 70.1 8,500 8,375 98.53 69.1
30 14,375 7,750 53.91 15,950 8,375 52.51
MINDANAO
Region X Bukidnon Valencia City 31 16,272 7,750 47.63 17,383 8,375 48.18
(Northern 32 8,500 7,750 91.18 67.7 9,035 8,375 92.70 69.9
Mindanao) 33 9,550 7,750 81.15 9,550 8,375 87.70
Kibawe 34 10,600 7,750 73.11 11,100 8,375 75.45
35 10,218 7,750 75.85 81.4 8,875 8,375 94.37 88.2
36 7,750 7,750 100.00 8,500 8,375 98.53
49.5 51.7
Misamis Cagayan de 37 28,117 7,750 27.56 30,064 8,875 29.52
Oriental Oro City 38 35,751 7,750 21.68 26.2 39,604 8,875 22.41 27.9
39 24,938 7,750 31.08 25,751 8,875 34.46
Balingasag 40 9,073 7,750 85.41 9,732 8,375 86.06
41 17,9630 7,750 43.14 64.4 18,818 8,375 44.51 67.3
42 9,075 7,750 85.40 8,804 8,375 95.12
Source: Source: COA Analysis of Sample Schools’ Data
Table 35: Interview Result: TSS Recipients in the Selected Audit Areas
Requirements NCR IV-A VII X Total

Have a valid PRC License, or pass the LET on or before August 15 of the
6 12 12 12 42
current school year
Be employed by the school on or before August 15 of the current school year; 6 12 12 12 42
Teach ESC grantees for at least 180 teaching minutes a week 6 12 12 12 42
Source: COA Analysis of the Results of Interview with TSS Recipients
Page 100 PAO-2018-02

Appendix VI: COA Contact

and Staff Acknowledgments
 Emelita R. Quirante (Director IV), (02) 952-5700 local 2022

COA Contact or erquirante@coa.gov.ph;
performanceinitiative@yahoo.com
 Michael L. Racelis (Director III), (02) 952-5700 local 2033 or

mlracelis@coa.gov.ph
Staff Director Quirante and Director Racelis provided the technical

assistance and supervised the audit until the development of the
Acknowledgments report. Atty. Robert D. Mabagos, Jr. assisted in the review
process. Ruby L. Caballes (Audit Team Leader), Erwin R. Llave
(Assistant Audit Team Leader), Janine Joy M. Ilagan, Toni Ann
F. Figurasin, Charmaine L. Chua, Mark Anthony G. Cabuco and
Blaine Jenner A. Bilalat (All Team Members) conducted the audit
and made key contributions to this report.
Alexander B. Juliano (Assistant Commissioner) provided

invaluable inputs in the finalization of the report.
Page 101

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Performance Audit Report

DepEd Promoted Greater Choice for

Highlights PRIVATE EDUCATION (GASTPE)

DepEd Promoted Greater Choice for Filipino Students Through the

prioritizes the underprivileged; (3) REGULAR MEETINGS

Appendix I Objectives, Scope and Methodology 75

Appendix II Educational Service Contracting (ESC) Scheme/

Appendix III Senior High School Voucher Program (SHS VP) 81

Appendix IV Survey Result 90

Appendix V Relevant Tables 96

Appendix VI COA Contact and Staff Acknowledgements 101

Tables Table 1 DepEd Appropriation and GASTPE

Table 8 Schedule of Slot Allocation 13

Table 31 Distribution of ESC Slots to Public

Figures Figure 1 GASTPE Program 4

Page iii PAO-2018-02

Figure 20 Results of Survey – ESC Scheme/ Program

ARMM Autonomous Region of Muslim Mindanao

OPIF Organizational Performance Indicator

Republic of the Philippines

February 21, 2019

SECRETARY LEONOR MAGTOLIS BRIONES

Dear Secretary Briones:

In line with its vision to become an enabling partner of the

The audit focused on the three components of the Program: 1)

implementation from SY 2012-2013 to SY 2017-2018. We

We conducted our performance audit from May to August 2018

It is a declared policy of the State to promote and make quality

Government assistance to students and teachers in private

The ESC is an arrangement whereby the DepEd enters into

In 1998, the GASTPE Act was amended by RA No. 8545 or the

The TSS is a DepEd program where an annual subsidy is

With the passage of RA No. 10533 or the Enhanced Basic

not given to the student as cash; DepEd instead pays directly to

The DepEd through SHS VP aimed to enable 30 to 40 per cent

Currently, the GASTPE program includes the following

Figure 1: GASTPE Program

ESC TSS SHSVP INSET Research

Source: COA Analysis of DepEd orders

Based on the General Appropriations Act (GAA) for FYs 2012

Table 1: DepEd Appropriation and GASTPE Program

The GASTPE program aims to improve quality in private

In addition, PEAC is responsible for the conduct of field audits

DepEd, as the institutional owner and regulator of the ESC,

DepEd has number

DepEd focused more on student coverage and provided

In addition, the numbers of grantees and ratio of completers to

Table 2 presents the performance indicators identified in the

Table 2: Performance Indicators for MFO of Regulatory and

As seen above, the only available data is the number of

the other two performance indicators, DepEd needs to add new

To ensure consistency, accuracy, relevance and usefulness of

a. Specific – focused and clear

DepEd acknowledged that performance indicators confined to

ESC Scheme/ Program

Table 3: Number of Students Enrolled in JHS

It was notable that the percentage of ESC grantees to total

Table 5: Distribution of ESC Grade 7 Grantees vis-à-vis Grade 7 in Public JHS

The objective of ESC scheme/ program to decongest public

public elementary schools in the number of ESC grantees

Source: COA Analysis of DepEd data

Based on the SY 2017-2018 data obtained from the schools

The budget constraint limits the number of ESC slots annually