COA flags UMak’s lopsided deal with private group

The Commission on Audit has called out the University of Makati (UMak) for entering into an unauthorized and unfavorable academic agreement with a private group controlled by school officials in 2011.

In its 2016 annual audit report, COA urged Makati Mayor Abigail Binay to “restrain the UMak President” from entering into such contracts with private groups without the approval of the city council.

It also called on Binay and city councilors to review the propriety and legality of all similar contracts entered into by the UMak president and other university officials.

Lopsided terms

The COA said the legality of the agreement with the University of Makati Educational Foundation Inc. (UMEDFI) was questionable. It also contained terms that were “grossly unfavorable” to the city government, it added.

Under a December 2011 memorandum of agreement (MOA), UMak and the nonprofit UMEDFI pooled resources to operate and manage various academic programs for “a special captured market not significantly situated within that of the conventional students of the University.”

Stripped of jargon, the COA said this referred primarily to non-Makati residents and covered programs not offered by UMak.

However, the UMak president “acted beyond his legal powers” when he represented the city and signed the MOA without authority from the city council, making the deal void from the start.

There was also alleged conflict of interest because UMEDFI’s incorporators were also UMak officials. For one, UMak’s vice president for administration and finance was also an UMEDFI treasurer.

“It appears that UMEDFI is an adjunct, a business conduit or an alter ego of UMak, in the guise of a private association, performing functions that are not within the legal authority of the latter,” the COA report said.

Disadvantageous deal

COA said the deal was “clearly detrimental to the interest of the City of Makati” because it allowed a private entity to use government-funded facilities for free. This was also the case for city human resources since UMEDFI was also managed by UMak officials.

UMak, however, said it was up to the courts, not the COA, to determine the legality of the MOA.