The Commission on Audit flagged Cebu Normal University for paying P262.75 million for a learning management system that inspectors certified as partially delivered, untested, and potentially lacking contractual basis.
State auditors identified multiple bidding and contract deficiencies in CNU's P947.83-million smart hub project, including unverified bidder contracts, missing board signature approvals, and illegal subcontracting exceeding 20 percent.
Project delays left P28.25 million worth of undistributed iPads in storage past their warranty period, while university management agreed to COA's recommendations to review procurement and improve inventory controls.
CEBU Normal University (CNU) paid P262.75 million for a learning management system that its own inspectors certified as only partially delivered and not yet tested, the Commission on Audit (COA) said in its review of the university’s P947.83-million smart hub project.
COA said in its 2025 report that it found several deficiencies in the procurement of the centralized student smart hub of the Cebu City-based state university, which may have affected the transparency and regularity of the procurement process.
CNU signed the contract with a supplier on Oct. 1, 2024. The project covers smart classrooms and e-laboratories, an e-library, the learning management system (LMS), network components, tablets and laptops. It was 34.29 percent complete as of Feb. 24, 2026, against a Sept. 29, 2025 target.
The contract was signed before Dr. Laurence Garcia assumed office as CNU’s seventh president on Feb. 2, 2026. His predecessor was Dr. Daniel Ariaso Sr.
Budget disparities
As for the LMS, state auditors said the winning bid priced it at P307.23 million, or 759.14 percent above its P35.76-million budget. A component that included Human Virtual AI was bid at P204.455 million against P15 million, which is 1,263.03 percent higher.
Bids for six other components were significantly lower, and the total stayed within the P950-million budget. COA said it could not determine the cause of the disparities because the bidding documents had no detailed cost estimates.
According to COA, CNU paid P262.75 million, the full cost of the four modules of the LMS. A May 15, 2025 inspection certificate showed the modules were partially delivered by the developer for the purpose of entitlement and could be tested only after system analysis and completion of the project.
COA said the contract set no terms for progress payments, making the payment appear to be without contractual basis. The Bids and Awards Committee (BAC) said that full payment was due because the LMS made up 27.70 percent of the project cost and inspectors had put the project was 28.80 percent complete. COA replied that the 27.70 percent was only the share of the LMS in the contract price.
Subcontracting issues
State auditors further said the LMS work, 32.4 percent of the contract, amounted to subcontracting beyond the 20-percent limit for goods contracts. In April 2025, the supplier replaced its LMS partner with another firm, a change confirmed by the CNU Board of Regents (BOR) on May 14 of the same year. Neither firm’s eligibility documents were submitted.
The university accountant warned the president on June 21, 2025 that the arrangement was subcontracting and the portion would not be entitled to payment. Five days later, the supplier declared under oath that the new partner was only a reseller, but COA noted that the warranty certificate of the firm named it the LMS developer.
The BAC said the LMS was existing commercial software not built for CNU. A university IT official, however, had told the pre-bid conference that the supplier must develop the system and turn over its source code. COA said the contradiction could have misled potential bidders.
Bidding violations
COA said the bidding documents lacked plans, drawings and detailed cost estimates for the classroom conversions. The winning bid also added a P28.25-million line for tablets that was not a separate component in the bidding documents, which could have disqualified the bidder. Bid evaluation and its report were finished the same day on July 23, 2024.
The BAC did not verify the ongoing contracts of the supplier, some showing signs of delay and instead clarified the figures with the bidder. COA said this indicated a violation of the no-contact rule.
According to COA, some budgets exceeded market prices. Thirty-four interactive display boards were bid at P470,000 each against a market price of about P188,954, a difference of about P9.56 million. The BAC said the budget covered installation, freight, training and inflation.
State auditors also flagged BOR Resolution 266, which awarded the contract on Aug. 30, 2024. It lacked the signature of the board chairperson, a Commission on Higher Education (Ched) commissioner who attended the meeting. COA had not received the requested meeting minutes.
Stored equipment
Delays left 1,000 iPads worth P28.25 million in storage at the Tandang Sora Hall of the university since May 14, 2025. They were undistributed when COA inspected in March 2026, with their one-year warranty running from delivery. CNU also kept unaccepted equipment in the hall, which was once used for university events. Of 280 MacBooks delivered, 141 had no property acknowledgment receipts.
Work was suspended at the request of the supplier after the Sept. 30, 2025 earthquake in Bogo City, pending clearance from the Office of the Building Official, which remained unissued during the COA inspection. The BOR granted the supplier a 120-day extension on Oct. 21, 2025.
Management agreed to the recommendations of COA, including a full review of the LMS procurement to determine whether the supplier met the requirements. It also agreed to submit a status report on the LMS, the signed BOR resolution or an explanation with the meeting minutes and the deed of undertaking and catch-up plan of the supplier.
For the stored equipment, COA asked CNU to find proper storage so the hall could be used again, issue receipts for the distributed laptops and time future deliveries to when the facilities are ready. It also asked the university to consider getting the written undertaking of the supplier that the warranty would run from installation or actual use, not from delivery.
In future biddings, the university committed to posting complete plans and technical specifications and to verifying the ongoing contracts declared by bidders.
COA issued no notice of suspension or disallowance to CNU in 2025. Older notices covering transactions from 2011 to 2022 left P400,550.19 in suspensions and P14.52 million in disallowances unsettled as of Dec. 31, 2025. / SUNSTAR CEBU