COA disallows with finality OVP's P73M confidential funds release in December 2022

The Commission on Audit (COA) has affirmed with finality its notice of disallowance on the disbursement of P73 million in confidential funds by the Office of the Vice President from December 22 to 31, 2022.

In a 15-page resolution, the commission said the OVP only submitted acknowledgment receipts to substantiate the confidential expenses and did not comply with the rules of the COA, the joint circular on the disbursement of confidential funds, and the national budget.

"They are, at best, a farce, of no significance, and utterly subpar the scintilla of substance which needed to demonstrate the proper disposal of the OVP's CF," the COA said.

COA said the obligation to refund the disallowed confidential expenses falls upon both those directly responsible – the approving, authorizing, and certifying officers; and those who actually received the disallowed amount.

The resolution pointed out that it was Vice President Sara Duterte who approved the transaction, including the utilization of the cash advance; OVP special disbursement order Gina Acosta who acted as the payee/SDO and disbursed the cash advance; and OVP chief accountant Julieta Villadelrey who certified that the supporting documents were complete and proper.

In a statement, the OVP said that it has yet to receive a copy of the October 5 resolution on the notice of disallowance.

"The office has already anticipated the possibility of this decision and has prepared to respond through the appropriate legal and institutional channels," the OVP said.

"Nevertheless, the OVP remains committed to fulfilling its mandate—to develop and promote programs that uplift the lives of the Filipino people," it added.

The COA said a disbursement of large public funds deserves no less; taxpayers' money should always be spent with paramount consideration of full transparency and reasonable budget allocation.

"Indubitably, these cannot be wantonly sacrificed on the altar of exigency in as much as reckless handling and accounting of public funds have no place in a government that endeavors to keep inviolate the trust of the people," the COA said.

The motion for reconsideration of the notice of disallowance was filed by Duterte, Acosta, and Villadelrey.

The COA, on August 8, 2024, issued a notice of disallowance on the confidential expenses of the OVP from December 2 to 31, 2022, in the amount of P73,287,000.

The commission, in a decision on April 10, 2026, affirmed the notice. The latest resolution affirmed the disallowance with finality.

The Joint Circular No. 2015-01 governs the entitlement, release, use, reporting, and audit of confidential funds and intelligence funds.

The circular also states that as the utilization of such funds is confidential and classified by nature, it requires “strong internal controls” and “strict accounting and auditing rules to prevent mishandling or improper applications of the funds.”

Under the said circular, confidential funds must be used for the following:

• purchase of information necessary for the formulation and implementation of programs, activities, and projects relevant to the national security and peace and order;
• rental of vehicles related to confidential activities;
• rentals and the incidental expenses related to the maintenance of safehouses;
• purchase or rental of supplies, materials, and equipment for confidential operations that cannot be done through regular procedures without compromising the information gathering activity concerned; and
• payment of rewards to informers (non-employees of the concerned government agency).

These purposes for confidential fund use, however, are subject to the following conditions:

• approval by the head of the agency/government-owned and controlled corporation;
• supported with documents evidencing the success of the information gathering and/or surveillance activities on account of the information given by the informer;
• directly related to the conduct of the specific confidential activities of authorized agencies; and
• uncover/prevent illegal activities that pose a clear and present danger to agency personnel/property, or other facilities and resources under the agency protection, done in coordination with the appropriate law enforcement agencies.

–NB, GMA News