The Department of Education (DepED) promulgated the revised implementing rules and regulations (IRR) for Republic Act 8525, or the Adopt-a-School Act of 1998, on 18 January 2013. DepED Order 2 series of 2013 is the latest revision to Department Order No. 80 s. 1998 – the first IRR issued for RA 8525.
The said law aims to improve access to quality education by promoting private sector participation in school building, rehabilitation and development. Under RA 8525, an adopting private entity (APE) must enter into a Memorandum of Agreement (MOA) with a public school. The MOA must be for at least two years and shall contain the terms of the ‘adoption’. Under such a MOA, the APE may provide training to a school’s faculty or construct or upgrade school facilities. It may also donate educational materials to public schools, whether elementary, secondary or tertiary, within the twenty poorest provinces in the country. In return, the law allows the APE to have its name displayed below the name of the adoptee school apart from an additional deduction to gross income equivalent to half of the expenses incurred and representation in the local school board.
The revised IRR clarifies the meaning of the allowable assistance an APE may provide to a school. In contrast to the old rules, it now specifically includes donation of cash, physical facilities, real estate, reading materials and devices for children with special needs apart from infrastructure, training, learning support, food assistance, and computer and science labs. Public schools are also defined more broadly to include government learning institutions.
It also adds the criteria for adopting private entities – a provision not found in the old rules. Under Rule 2 of the revised IRR, in particular, an APE must have existed for at least a year from registration with the Securities and Exchange Commission, or the Cooperative Development Authority with a credible track record. It should not have been prosecuted and found guilty of illegal activities, particularly money laundering. The rule states that the APE must possess these qualifications “at any time” during the term of the MOA. The wording of this particular provision is unfortunate as it could lead to absurd interpretations, such as an entity wishing to avail of the tax incentives could adopt a school under the program and then comply with the qualifications later, or it may keep a clean record at the beginning of the program and then use the corporate vehicle for money laundering activities later on. This is obviously not the intent of the revised IRR.
Regarding incentives, on the other hand, the provision on tax deduction is primarily implemented by the Bureau of Internal Revenue through Revenue Regulation 10-2003. However, the revised IRR amends the timing of the application and availment for these incentives. Under the old Rule, the application for tax deduction should be filed at the end of the fiscal year. Now, such claims shall be claimed or availed of within the taxable year it was incurred. It also deleted the provision that required the Coordinating Council, composed of the DepED, Commission on Higher Education (CHED), National Anti-Poverty Commission (NAPC), the National Federation of the Chambers of Commerce and Industry and the Technical Education and Skills Development Authority (TESDA) to resolve the application for deduction within 30 days from receipt by the National Secretariat.
The revised IRR also made the DepED the primary implementing agency tasked with overall management of the program, with the TESDA and CHED providing only focal persons. It also explicitly requires DepED to institutionalize the Secretariat within its department by providing plantilla positions.
Finally, in contrast to the explicit wording of RA 8525 mandating the Presidential Council for Countryside Development, now the NAPC, to identify the twenty poorest provinces in the country in line with the prioritization scheme of the law, the IRR now entrusts this task to the National Statistical Coordination Board.
(Imee thanks April Carmela B. Lacson for assisting in the preparation of this post.)