THE Commission on Audit (COA) has lifted the notices of disallowance (NDs) previously issued against the city governments of Pasay and Valenzuela in connection to their confidential and intelligence funds (CIF) expenses totaling P43 million.
In separate decisions dated January 28, 2020, the COA Commission Proper granted petitions for review filed by city officials challenging the basis cited by government auditors in disallowing their CIF expenditures.
Former city mayor now Sen. Sherwin Gatchalian and OIC budget officer Pia Aquino filed the appeal for Valenzuela seeking recall of the 2015 notices of disallowance in connection to alleged excess spending of intelligence and confidential funds totaling P10.25 million in 2007 and P10.016 million in 2008.
COA’s Intelligence and Confidential Fund Audit Unit (ICFAU) initially issued a notice of suspension dated March 6, 2014 on the ground that the cash advances made by the city government were not sufficiently supported by required documents.
On March 18, 2015, Valenzuela was issued two NDs as auditors invoked Department of
Interior and Local Government memorandum circular No. 99-65 limiting intelligence/confidential spending to only P2.25 million. This meant the city incurred overdrawn CIF amounting to P10.25 million in 2007 and P10.016 million for 2008.
However, Gatchalian and Aquino pointed out that the audit did not consider the appropriations for “peace and order programs (POP)” which would put the city’s spending well within the limits.
COA chairman Michael G. Aguinaldo and Commissioners Jose A. Fabia and Roland C. Pondoc agreed.
“In revalidation by the ICFAU, the total amount appropriated for the city’s POP for CYs 2007 and 20008 were found to be P45.824 million and P84.321 million, respectively. From the above computation, it appears that the city’s I/C Fund expenditures fell within the 30 percent POP limit,” the COA noted.
In the case of Pasay City, auditors disallowed the CIF expense for 2012 for supposed violation of existing accounting rules. The audit team said the P22.75 million said was spent through reimbursement using cash advances which is barred by the rules.
It noted that cash advances are prospective by nature hence should not be used for reimbursement of expenses already incurred.
On review however, the COA Commission Proper cleared ex-mayor Calixto, special disbursing officer Ruel San Pedro, city budget officer Ma. Conchita Cayanan, OIC city accountant Alegria Casugay, and city treasurer Manuel Leycano Jr.
It held that expenses incurred as part of the intelligence and confidential activities of the local government unit may be paid out of cash advances “provided that they are covered by the period indicated in the grant.”
At the same time, the COA noted that Pasay City officials submitted full liquidation reports for the sum involved per validation of the ICFAU.
“With the submission of the Head of ICFAU of the results of re-audit conducted showing that the release and utilization of the cash advance for CIF were in accordance with the pertinent provisions of DILG MC No. 99-65…the lifting of the ND is proper,” the commission said.