HOW much may a province, city or municipality set aside from its budget for confidential expenses?
In no less than seven rulings between 2018 to 2022, the Commission on Audit (COA) has repeatedly clarified that local government executives do not have unlimited powers when it comes to determining how much of taxpayers’ money may be earmarked for such less-scrutinized spending.
On January 26, 2018, the COA granted the provisional lifting of the notice of disallowance on the P79.94 million cash advances of the provincial government of Laguna drawn from 2011 to 2013 to give then governor Jeorge “E.R.” Ejercito Estregan a chance to respond to three notices of suspension issued against the confidential/intelligence expenses (CIE).
But in the same ruling, Intelligence and Confidential Fund Audit Unit (ICFAU) director Flerida Jimenez said that the LGU’s confidential expenses are limited under the Department of the Interior and Local Government (DILG) Memorandum Circular No. 99-65.
The DILG circular states that spending of confidential nature by LGUs cannot exceed three percent of its annual budget or 30 percent of the Peace and Order Program (POP) budget for the year in question.
The ICFAU likewise insisted that the expenditure items must make sense, hence exclude regular maintenance and operating expenses as well as grants, donations, or monetary assistance.
On May 23, 2019, the COA also lifted the disallowance against the P40 million CIE of the city of Las Piñas for 2011 and 2012.
While the audit team assigned to the city found the P20 million per year spending on confidential activities excessive, the COA en banc set aside this finding on the ground that the maximum amount available to the city government was P23.015 million in 2011 and P23.89 million in 2012 based on its POP budget for those years, again based on the DILG circular.
On January 28, 2020, the COA issued two rulings both related to confidential spending.
The first was related to the appeal filed by Sen. Sherwin Gatchalian who, as former city mayor of Valenzuela, was held liable for the disallowed P20.26 million CIE for 2007 and 2008.
The ICFAU held that the expenditure exceeded the ceiling of P2.25 million in 2007 and P2.48 million in 2008.
However, the Commission noted that 30 percent of the city’s POP budget totaled P13.75 million in 2007 and P25.3 million in 2008 which meant that the cash advances drawn by the mayor were well within the limits set under the DILG circular.
The second ruling on the same date involved the P22.75 million CIE of Pasay City which was disallowed in audit for being excessive but was appealed by then mayor Antonino Calixto.
In ordering the disallowance lifted, the COA noted that the POP budget of Pasay for 2012 amounted to P155.14 million of which 30 percent or P46.54 million was available for confidential activities.
As the city officials only spent P22.75 million for CIE, the commission held that there was no violation of the DILG memorandum circular provision as to the maximum amount.
