Quirino State U told to collect service fees from China Bank

THE Commission on Audit has quizzed the management of the Quirino State University (QSU) for acting as a loan collection agency for China Bank Savings for the past three years free of charge.

In the 2023 audit report of QSU, state auditors even called out the university for “giving preference” to the collection of loan payments for the same bank and government financial institutions while failing to deduct monthly withholding taxes from the salaries of university personnel.

“It was observed that the payment of loans from China Bank Savings and other government institutions were given preference over the monthly withholding of tax deductions,” auditors pointed out.

The COA noted that the QSU has an existing agreement with China Bank wherein the latter extends loans to university employees while repayment is being made through salary deductions. The university then remits the collections to the bank.

“However, the MOA does not indicate payment of service fee to the University for its effort to collect and process its eventual remittance to CBS,” the audit team said.

Campus administrators of QSU-Maddela and QSU-Cabarroguis and the Chief Administrative Officer of QSU-Diffun supposedly had a “verbal agreement” with the private bank that it would pay the campuses a two-percent service fee based on the loan collections.

In the absence of a specific provision in the MOA that the fees were intended to be paid to the university, the sum went to some QSU personnel instead although the money was eventually refunded after the irregularity was flagged in the audit.

The audit report did not provide the names of the QSU personnel who received and pocketed the service fees from China Bank.

The audit team noted that while the loan collection service is still being provided to China Bank, it has stopped paying the service charge since November 2020 for the QSU Diffun and Cabarroguis campuses while for QSU-Maddela campus, the last payment was way back in October 2021.

Since the two-percent service fee has been stopped, records showed QSU still collected and remitted loan payments to China Bank totaling P32.1 million as of yearend 2022 and P19.4 million for 2023. Based on the said