EXPLAINER: When does government spending become irregular or extravagant?

Witness Roderick Wamil described the Office of the Vice President's (OVP) use of confidential funds in 2023 as an irregular expenditure based on their review of the documents.

Before that, House prosecutor Lorna Kapunan attempted to explain in Filipino several terms related to different types of government spending, including "irregular" and "extravagant" expenditures.

So when does government spending become irregular or extravagant?

2015 Joint Circular

The prosecution once again highlighted Joint Circular No. 2015-01 issued by the Commission on Audit (COA), Department of Budget and Management (DBM), Department of the Interior and Local Government (DILG), Governance Commission for GOCCs (GCG), and the Department of National Defense (DND) during the continuation of the impeachment trial on August 4.

According to the prosecution, the Joint Circular is based on Section 2(2), Article IX-D of the 1987 Constitution, which authorizes the COA to establish accounting and auditing rules to prevent irregular, unnecessary, excessive, extravagant, and unconscionable expenditures, or the improper use of government funds.

The Joint Circular also states that although confidential and intelligence funds are sensitive in nature, they are not exempt from strict accounting and auditing rules.

These rules are intended to ensure the proper use of public funds and prevent the improper application of confidential funds, the prosecution added.

In line with this, Wamil testified that the OVP allegedly violated Item 4.8.5 of Joint Circular No. 2015-01 in its use of confidential funds in 2023.

According to Wamil, the OVP allegedly used P15 million for reward payments from February 6 to March 29, 2023, and another P12 million for reward payments from April 25 to June 30, 2023.

However, based on their findings, the OVP allegedly failed to submit documentary evidence supporting those reward payments for the first two quarters of 2023.

Wamil said that while the reward payments were reflected in the OVP's accomplishment reports, there were no documents proving that the information gathering or surveillance activities for which the rewards were supposedly paid had been successfully carried out.

Counsel for the prosecution Lorna Kapunan argued that the purpose of the Joint Circular is to prevent irregular, unnecessary, excessive, extravagant, and unconscionable expenditures.

While explaining the terms used in COA issuances, Kapunan translated "irregular" into Filipino as "kaduda-duda" (questionable) and "unnecessary" as "hindi kailangan" (not necessary).

Defense counsel Michael Poa objected to the translation before the questioning resumed.

Kapunan asked Wamil where the OVP's accomplishment report would fall?

"Will it fall in under any of this enumeration?" Kapunan asked, to which Wamil responded, "Yes, Ma’am. Under the irregular expenditures."

Prohibited government expenditures

In October 2012, COA issued Circular No. 2012-003, which outlines prohibited and discouraged government expenditures.

Among these is irregular expenditure, which refers to the use of government funds in violation of existing laws, rules, regulations, procedural guidelines, and established policies.

An expenditure is considered irregular when public funds are disbursed without complying with prescribed procedures and the proper rules governing the use of government funds.

Meanwhile, unnecessary expenditure refers to spending that cannot be considered prudent or reasonable, or that fails to demonstrate the level of care expected of a responsible manager of public funds.

It includes expenditures that do not contribute to the mandate, objectives, or operations of a government agency.

Excessive expenditure refers to the use of government funds in amounts that exceed what is reasonable or appropriate.

It includes expenditures that go beyond the ordinary or justifiable amount, are disproportionate to the proper quantity or price, or exceed reasonable limits.

Extravagant expenditure refers to the use of government funds in a manner that is lavish, imprudent, and lacking in economy.

These include spending that is excessive, lavish, luxurious, overpriced, or made without careful consideration.

Unconscionable expenditure refers to the use of government funds in a manner that is unreasonable and excessive—spending that no person of sound judgment would make and that no fair and honest person would consider reasonable.

It also includes expenditures that violate ethical and moral standards.

Meanwhile, as to the testimony of Wamil on the reward payments, Poa made a motion to strike off the record the portion tackling the audit findings. He said the proceedings at that stage were only meant to determine whether there were irregularities based on the OVP's accomplishment reports, and not yet to examine the actual audit findings.

Senator Chiz Escudero, the impeachment trial presiding officer, ordered the portion of the testimony stricken from the record. —LDF, GMA News