IN two recent decisions on the appeals of two local government executives, the Commission on Audit defined how much a province, city, or municipality may earmark for confidential expenses and what kind of programs, projects or activities may be funded under such secret funding.
On Jan. 28, 2022, the COA Commission Proper reduced the P9.525-million disallowance issued in 2014 against then Negros Oriental governor Roel Degamo to P6.945 million.
Degamo, who was gunned down by assassins in his own home in March, had been held liable for his cash advances from confidential and intelligence funds (CIF). He claimed the provincial government had P12.7 million appropriations for CIF in 2011.
For 2012, he asked the Sangguniang Panlalawigan (SP) for P10 million CIF but it trimmed down the amount to just P5 million. Unhappy with the allocation, Degamo vetoed the reduced CIF. The SP capitulated and passed Resolution No. 76 not to override the veto of the governor, resulting in a re-enacted CIF of P12.7 million base on the previous year’s figure.
However, after audit of the expense liquidations, the COA’s Intelligence/Confidential Funds Audit Unit (ICFAU) issued a notice of suspension questioning the basis for re-enactment of the CIF budget and the inclusion of road projects and water systems.
Also flagged were the lack of supporting documents on the supposed payment of incentives to agents and operatives amounting to P8.22 million, absence of support documents showing the necessity for rental of safehouses in each municipality, and the inclusion of the purchase of medicines and hospital supplies.
In his justifications, Degamo invoked DILG Opinion No. 16 s. 2011 which supported the view that that the previous year’s intelligence funds may be re-enacted. He likewise argued that there is “no strict formula” on the usage of the CIF, much less specific limitations on what kinds of medicines maybe covered.
Unsatisfied with the explanation, the ICFAU issued a notice of disallowance for the entire sum of P9.525 million holding Degamo liable for the refund together with provincial accountant Teodorico Reyes, provincial treasurer Danilo Mendez, and provincial budget officer Marichu Alpuerto.
In its seven-page decision, the COA Commission Proper upheld Degamo’s position that the re-enacted CIF was valid under Section 55 (b) of RA 7160 or the Local Government Code.
However, the Commission struck down his arguments regarding the limitations on the use of the CIF and held that under the Department of the Interior and Local Government (DILG) Memorandum Circular No. 99-65, the provincial government’s CIF is limited to only 30 percent of its budget for the Peace and Order Program (POP).
While the province listed 46 POP projects with a total cost of P48.927 million, the COA said only four of these are valid for being connected to “maintaining peace and order and public safety.”
“The core of the controversy is whether the items involving the concreting, improvement and rehabilitation of various farm-to-market roads, among others, may be included as a proper item of POP. The enumeration stated in the paragraph 4, Item II of DILG MC No. 99-65 on POP allocation, was expressly made nonexclusive. The province does not have carte blanche authority to include any activity as an item of POP,” COA said.
The only projects allowed were the P6 million peace and order expenses, P2 million subsidy to municipalities on the maintenance of the Civilian Armed Force Geographical Unit (CAFGU) auxiliary units, P100,000 as subsidy to the Tripartite Industrial Peace Council, and P500,000 for the operation and maintenance of the Peace and Order Council.
Barred by the COA were 24 road projects, five water supply projects, and outreach/medical missions.
“Perforce, the POP allocation of the province should only be P8,600,000, the 30 percent of which amounts to P2,580,000. The province actually spent/utilized the amount of P9,525,000, which still exceeded the allowable limit of P2,580,000, thus, the excess amount of P6,945,000 must be disallowed for being illegal and irregular,” the COA said.
In a separate decision, the COA Commission Proper also partially granted the appeal of former Quezon City mayor Herbert Bautista on the disallowance on his cash advances for CIF totaling P20 million.
The Commission held that contrary to the original finding of the audit team, the former mayor’s cash advance did not exceed the CIF ceiling in 2010.
It noted that the appropriations for POP amounted to P86.311 million, 30 percent of which was given P25.893 million.
