TO:	The Minister of Education, Culture and Sports; The Minister of the Budget; The Chairman, Commission on Audit

WHEREAS, technical-vocational schools, including national and local public high schools and institutions of higher learning within the organization of the Ministry of Education, Culture and Sports are mandated to produce middle-level manpower for the needs of national development;

WHEREAS, budgetary support to technical-vocational schools are oftentimes inadequate to allow them to fulfill their mission effectively;

WHEREAS, capital and equipment outlays are generally too little to allow for the upgrading of equipment and facilities, resulting in poor student performance;

WHEREAS, B.P. Blg. 232 (The Education Act of 1982) provides in Sec. 38 that secondary and post-secondary schools may change tuition and other schools fees in order to improve facilities and in Sec. 39 that income generated from production activities and from auxiliary enterprises may be retained and used by the schools concerned;

WHEREAS, LOI No. 872 and 1026 provide for the constitution of a Revolving Fund out of income earned from food production and manufacturing programs of national schools; and

WHEREAS, the national policy of self reliance encourages schools to generate income and harness non-traditional sources of income to support operations;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by Law, do hereby Order and Instruct:

1. Public technical-vocational schools, including (a) national secondary schools, (b) institutions of higher learning within the Ministry of Education, Culture and Sports, and (c) local schools where desired by the local government unit concerned, are hereby authorized to establish an Instructional Improvement Fund (IIF);
   
   
2. The IIF shall be used to: (a) upgrade capital facilities and equipment, (b) upgrade standards of school maintenance and operation and (c) promotion of selected livelihood projects through training cources, demonstration and appropriate technology transfer;
   
   
3. The IIF shall be constituted from the following sources; (a) net income from the production and manufacturing projects of the school initiated pursuant to LOI No. 872 and 1026 and B.P. Blg. 232, (b) income from auxiliary enterprises, as provided by B.P. Blg. 232, (c) school fees other than tuition fees, including shop and science, laboratory,    library, athletic, medical and dental, and special assessments for capital and facilities improvement and development, as may be authorized by the Minister of Education, Culture and Sports, (d) fees charged from the training cources, demonstrations and other activities conducted by the school as part of its livelihood projects, and (e) donations from foundations, civic organizations, philanthropists, alumni, parent-teacher organizations, private enterprises, and other agencies;
   
   
4. The IIF shall be used solely for the expansion, upgrading or maintenance of schools facilities, particularly machinery, equipment and other learning resources;
   
   
5. The IIF shall be administered by the school directly and kept in a bank account with the Philippine National Bank or other government bank, in the name of the school and withdrawable on joint signature of school officials and a Commission on Audit representative.  Payments may be made without need for Cash Disbursement Ceilings.  All expenditures, however, shall be subjects to pertinent accounting and auditing regulations on procurement and other transactions and to government regulations on the purchase of motor vehicles;
   
   
6. Regulations to implement this Letter shall be issued by the Ministry of Education, Culture and Sports, the Office of Budget and Management, and the Chairman, Commission on Audit.

Done in the City of Manila, this 10th day of December, nineteen hundred and eighty-five.