LAWMAKERS led by the chairman of the House Committee on Good Government and Public Accountability yesterday filed a bill seeking to initiate reforms in the utilization of confidential and intelligence funds (CIFs) in the wake of the panel’s discoveries during its investigation into Vice President Sara Duterte’s alleged misuse of confidential funds in both the Office of the Vice President (OVP) and the Department of Education (DepEd).
Manila Rep. Joel Chua led his colleagues in filing House Bill (HB) No. 11192, or the proposed “Confidential and Intelligence Funds Utilization and Accountability Act,” to standardize the allocation and use of CIFs and penalize its misuse.
The authors of the measure said the use of CIFs “has never been without issue, including its being subject to audit.”
They also said that Joint Circular No. 2015-01 issued by the Commission on Audit (COA) with the Department of Budget and Management, the Department of Interior and Local Government, the Governance Commission for government-owned and controlled corporations (GCG) and the Department of National Defense, which governs the use of CIFs, “provides a disappointingly lenient requirement for liquidation of cash advances sourced from confidential funds compared to that of cash advances of regular funds.”
The measure, along with another measure which seeks to regulate the functions of government special disbursing officers (SDOs) and penalize mishandling of funds, were authored by 38 members of the good government committee, including Senior Deputy Speaker Aurelio Gonzales Jr. of Pampanga, Deputy Speaker David Suarez of Quezon and Manila Rep. Bienvenido Abante Jr., a vice chairman of the committee.
The proposed remedial laws were filed following the committee’s inquiry into the Vice President’s alleged misuse of a total of P612.5 million in confidential funds in both the OVP and the DepEd when Duterte was still concurrent education secretary.
CONFI FUNDS USE
HBN 11192 proposes the lifting of the confidentiality veil of CIFs once the COA issues a notice of disallowance (ND) to an agency or department for a particular expenditure.
“CIFs lose their confidentiality status and shall be declassified immediately once COA issues a notice of disallowance. The funds, including all related information and documents, shall then be subject to inquiries and investigations, and shall be made public, without need of compulsory processes,” it said.
It stressed it is high time for Congress to impose “stricter requirements and guidelines be issued in the utilization of confidential funds for confidential expenses.”
The proposed measure provides that CIFs “shall be allocated to agencies as indicated under the General Appropriations Act and to all other agencies, department, units with mandates related to national security, peace and order, and intelligence gathering.”
The total allocation for confidential funds for any single agency, considering the population serviced, shall not exceed 10 percent of the total annual budget of the agency, unless otherwise explicitly authorized by law.
It also prohibits the use of CIFs “for agency operations not directly related to peace and order or intelligence gathering, political activities, personal or private expenditure of government officials or employees, and public relations or other non-security-related purposes.”
The bill seeks to penalize violators with perpetual disqualification from public office, including loss of benefits.
In filing the bill, the authors cited several irregularities in the allocation and use of CIFs uncovered in the course of the House panel’s inquiry, such as mismatch of the granting of confidential funds to agencies that are not involved in public order and safety or national security; irregular utilization of confidential expenses to programs, activities, and projects that are not the initiatives of an agency or was there an actual utilization of confidential funds; payment of rewards to individuals whose identities cannot be verified; purchase of information without proof that utilization of the information led to a successful activity by the same agency from which the confidential funds were sourced; and the absence of a requirement of a memorandum of agreement between agencies should there be a coordinating event for utilization of the information acquired through the purchase of reward of the agency incurring the confidential expense and the issuance of a certification for the successful utilization of the information by the agency receiving and utilizing the information.
It noted how the P112.5 million in confidential funds released to the DepEd under Duterte “were used to augment its operations and not for national security,” contrary to the purpose of the funds.
“Moreover, because of the loose requirements of Joint Circular No. 2015-01 on confidential and/or intelligence funds, acknowledgment receipts bearing only signatures and illegible handwriting belonging to individuals whose identities have not been verified were allowed to serve as proof of liquidation,” it said.
SDOs
They same group of lawmakers also filed HB No. 11193, which seeks to regulate SDOs and impose penalties once they misappropriate the funds they handle.
The bill said that without a law to protect funds handled by SDOs, the gaps in the COA guidelines on the use of CIFs “made it susceptible for agency heads and disbursing officers to abuse fund disbursement by the millions and billions without proper liquidation with impunity.”
The proposed “Special Disbursing Officers Accountability Act” defines an SDO as the “head of agency (HoA) or a regular employee designated as such by the HOA, to be in-charge of making disbursement of the amount received.”
The bill requires the SDO to have an approved fidelity bond “in an amount equivalent to his/her cash accountability and whose net worth can cover 50 percent to 100 percent of his/her cash accountability.”
“The funds disbursed to the SDO must be liquidated by the same SDO accountable therefor. The SDO shall ensure proper liquidation of the funds and that the purpose for which the fund was originally intended had been attained,” it said.
In the case of CIFs, the SDO “shall ensure and certify that the funds have been used in relation to the mandate of the agency directly related to national security, peace and order, or intelligence gathering for the effective implementation of its law enforcement mandate.”
Activities related to national security and peace and order include purchase of information necessary for the formulation and implementation of program, activities and projects relevant to the national security and peace and order; payment of rewards, aid and/or capability development for personnel of law enforcement agencies, and volunteers/partners and other activities; crime prevention and law enforcement activities; and programs for anti-illegal drug, illegal gambling, counter-insurgency and/or counter-terrorism, illegal logging, illegal mining, illegal fishing, smuggling and human trafficking.
The bill also enumerates the following instances as prima facie evidence of misappropriations of funds: There is disbursement of funds allocated to a government agency, unit or instrumentality the mandate of which is not directly related to national security or peace and order; the SDO fails to fully liquidate the funds at the end of each year; the SDO disburses the funds to another person who shall make further disbursement of funds; there is disbursement of funds for activities not directly related to national security, peace and order, or intelligence gathering for effective implementation of its law enforcement mandate; or failure to personally comply with the documentary requirements of liquidation.
The proposed law likewise provides that the SDO and the HoA shall be jointly and severally liable in case of failure to render accounts, misappropriation, or misuse of the funds, whether through negligence or intentionally.
It said the penalty of perpetual disqualification from public office, including loss of benefits, “shall be imposed on any offender, without prejudice to the filing of criminal, civil and administrative cases.”
In filing the bill, the lawmakers cited testimonies of two disbursing officers that the OVP’s and DepEd’s confidential funds were handed over to two members of Duterte’s security team which was followed by the fabrication of acknowledgment receipts (ARs) submitted as liquidation documents to justify the hundreds of millions of disbursements.
Former DepEd Special Disbursing Officer (SDO) Edward Fajarda earlier told the Chua panel that Col. Dennis Nolasco, a security officer at the DepEd, was the one who disbursed the agency’s P112.5 million confidential funds in 2023, while SDO Gina Acosta said she disbursed P125 million of the OVP’s 2023 secret funds to Col. Raymund Dante Lachica, head of the Vice President Security and Protection Group (VPSPG).
The disbursement of the P125 million in confidential funds allocated to the OVP in 2022 was also found to be riddled with irregularities, including dates outside of the funding period, forged signatures and fake names.
