How Sara Duterte broke rules on confidential funds — again and again

Graphics by Nico Villarete/Rappler

A joint circular governs the use of confidential funds. At her impeachment trial, it is cited over and over to underscore the Vice President's apparent violation of the rules.

AT A GLANCE

• The impeachment trial of Vice President Sara Duterte highlighted alleged violations of the rules governing the use of confidential funds in the Philippines.
• Multiple provisions from Joint Circular 2015-01 were reportedly breached by the Office of the Vice President, including improper disbursement of funds and lack of documentation for expenditures.
• State auditors issued notices of disallowance against the OVP due to these violations, which included unauthorized transfers of funds and insufficient justification for expenses.

This is AI-generated. Read the article for full context. Report any errors.

The impeachment trial of Vice President Sara Duterte shone a spotlight on the bible of confidential fund (CF) utilization in the Philippines, and how the country’s second highest official has supposedly violated it repeatedly.

Joint Circular 2015-01, issued under the administration of Benigno “Noynoy” Aquino III, provides an executive framework on how to release, use, report, and audit confidential and intelligence funds (IF). This document was crafted by the Commission on Audit (COA), Department of the Interior and Local Government (DILG), Department of Budget and Management (DBM), Governance Commission for GOCCs, and the Department of National Defense.

Rappler enumerates the many times this rule book was allegedly defied by the Office of the Vice President (OVP).

Provision: Section 6.3.2 Letter A

• What does it say? “The Special Disbursing Officer shall disburse the CF and IF in accordance with the provisions this circular.”
• How was it allegedly violated? Former OVP SDO Gina Acosta confirmed handing over the agency’s confidential funds to Duterte’s security officer Colonel Raymund Lachica, who used the funds to “pay” OVP informants. Only the SDO is allowed to do that. State auditor Xylene Mae del Campo said this is among the reasons why COA issued a notice of disallowance against the OVP.

Provision: Section 6.1.6

• What does it say? “No transfer of funds/appropriation through cash advances or any form of payment from one agency to another for purposes of confidential and intelligence activities shall be allowed.”
• How was it allegedly violated? Lachica, despite his assignment with the OVP, is an active personnel and career officer of the Armed Forces of the Philippines. The prosecution argues that when Acosta turned over the funds to Lachica, an inter-agency transfer of the funds occurred.

Provision: Section 6.1.1

• What does it say? “Cash advances shall be used for specific legal purpose related to CF and/or IF. Under no circumstance shall it be used for liquidation of the previous cash advance or be transferred from one accountable to another.”
• How was it allegedly violated? Lachica, to whom the funds were transferred, is not only a non-accountable officer, but also someone who is not covered by the fidelity bond on confidential fund use.
  • The OVP also used the funds encashed on December 20, 2022 to reimburse activities that predated the utilization period, such as for tree-planting activities and Christmas parties.

Provision: Section 6.1.2

• What does it say? “In no case shall cash advance for CF and/or IF be utilized as reimbursement of the expenses prior to the granting of cash advance.”
• How was it allegedly violated? The OVP cited activities from December 13 to 18, 2022 to justify its CF utilization beginning December 20 that year. State auditor Del Campo said this is among the reasons why she drafted the notice of disallowance against OVP.

Provision: Section 4.8.5

• What does it say? “Payment of rewards to informers (non-employee of concerned government agency) subject to the following conditions: Supported with documents evidencing the success of the information gathering and/or surveillance activities on account of the information given by the informer.”
• How was it allegedly violated? Del Campo and state auditor Roderick Wamil separately said the supposed payment of rewards worth millions of pesos that the OVP made was not supported by documents evidencing success of the information-gathering or surveillance activity. Del Campo added that certifications containing a general statement that the OVP’s operations resulted in “no untoward incidents,” as well as protective intelligence reports provided by the agency, were insufficient. The OVP also used confidential funds for medicine and food supplies, but provided no official receipts. Del Campo and Wamil said they could not verify the authenticity of the purchases through acknowledgment receipts alone.

Provision: Section 4.8.4

• What does it say? “Payment of rewards to informers (non-employee of concerned government agency) subject to the following conditions: Purchase or rental of supplies, materials and equipment for confidential operations that cannot be done through regular procedures without compromising the information gathering activity concerned.”
• How was it allegedly violated? Del Campo said in issuing the notice of disallowance, her COA team took into consideration the fact that the OVP did not specify how the payments for tables, chairs, and desktop computers were intended for confidential operations.

Provision: Section 4.2

• What does it say? “All allocations of CF and/or IF shall be supported with a Physical and Financial Plan (Annex A) indicating the proposed amount allocated for each program, activity, and project, where disbursements pertaining to CE and IE shall be based.”
• How was it allegedly violated? Wamil said the PFP of the OVP lacked specifics. For instance, the PFP for confidential spending in 2022 was for a general “Good Governance Program.” Wamil said that since it is a plan, it should have indicated how exactly the money will be spent. OVP assistant chief of staff Lemuel Ortonio later confirmed that for 2022, the OVP first made requested confidential funds from the DBM before actually coming up with a written plan on how to spend it.