Former Undersecretary Eliseo Rio of the Department of Information and Communications Technology revealed on Monday that he resigned from his post after DICT chief Gregorio Honasan kept him out of the loop over how the agency spent P300 million in confidential funds.
Rio made the disclosure when sought for confirmation on a Commission on Audit Audit Observation Memorandum (AOM) dated January 20 which said that the DICT disbursed a total of P300 million in the form of three cash advances of P100 million each on November 8, December 3 and December 17 in 2019.
All the cash advances were intended for confidential expenses and none had notice of cash allocations (NCAs) from the Department of Budget and Management (DBM).
The NCA is a disbursement authority issued by DBM to central, regional and provincial offices and operating units to cover cash requirements of the agencies prior to the processing and release of cash advances.
“Yes, that [observation] was in the AOM. My position is that the DICT does not need intel or confidential funds because it is not [within] its mandate to conduct intel or surveillance activities. But the position of Secretary Honasan is that this is needed by him,” Rio told GMA News Online.
Rio then argued that as Undersecretary for Operations, he should be at least informed on how these confidential expenses were used as part of DICT operations.
“Since I am not included in the planning process of the use of this confidential funds and it’s limited only to the people Honasan brought with him, I felt left out and useless and as such, might as well to resign because I am not trusted,” Rio added.
GMA News had sought comment comment from Honasan on the matter, but the DICT Secretary had yet to respond as of posting time.
The DICT said that they would no longer comment on Rio's resignation.
Rio served as Acting DICT Chief before Honasan, a former senator, was appointed to the post by President Rodrigo Duterte in November 2018.
Honasan took his oath in July 2019 after his appointment was approved by the Commission on Appointments, members of which included Honasan's former Senate colleagues.
Undocumented confidential fund expenses
In its AOM, the COA flagged DICT for using prior issued NCAs to release the confidential expenses due to its huge unused budget from the previous fiscal year.
COA said that while agencies were allowed to use available balances of comprehensively released NCAs, such balances can be used only to cover payment of both the current year's and prior year’s accounts payable.
“COA sought for NCAs issued in 2018 and 2019, breakdown schedule of the monthly balances in the Monthly Disbursement Program was likewise requested from the Officer-in-Charge Finance Service Director. To date, no such documents were submitted to and received by the Audit Team, denying it of the opportunity to conduct further verification of pertinent documents,” COA said.
“There must be previously incurred but not yet paid expenditures, in the form of delivered/rendered goods and services or completed projects, in order to validly utilize and disburse cash authorized by a prior-issued NCA. In the case of confidential expenses, the Joint Circular [between COA and the agencies] particularly prohibits the utilization of cash advance as reimbursement of the expenses prior to the granting of the cash advance,” COA added.
Delayed disbursement, unfulfilled mandate
State auditors also found a five-month delay in the processing of the cash advance for the Department’s intended cybersecurity program and activities.
“The GAA (General Appropriations Act) for 2019 was signed on April 15, 2019. However it is observed that the cash advance for confidential funds was only processed in October to November 2019. This has left the Department with very little time in accomplishing its desired cybersecurity Program, Activity, and Projects, in order to produce the expected outcomes and physical targets within the current year,” COA said.
“All these noted deficiencies adversely affected and are counter-beneficial to the Department’s mandate of cybersecurity policy and program coordination,” COA added.
Based on DICT’s Monthly Disbursement Program for fiscal year 2019, DICT is supposed to spend P7.1 billion from July to December 2019, with P4.4 billion to be disbursed from July to October 2019 and P2.6 billion to be disbursed for November to December operations.
The previously issued NCAs, however, only covered P1.8 billion, and that only P446,221,387 million was certified to have remained in the Department’s Modified Disbursement System Sub-Account as of November 6, 2019.
The COA had given the DICT 15 days from its receipt of the said findings to submit its comments on the state auditors' findings. — DVM, GMA News