The importance of auditing confidential funds

By all appearances, the COA auditors may most likely prove to be the most effective adverse witnesses against the vice president. Their testimonies have given light to the intricacies of determining lapses, violations of and deviations from the proper use and disbursement of public funds. The COA auditors were competent, credible and consistent in their narrations of the facts constituting the elements of mishandling of confidential funds.

Article IX, C, Section 2 of the Constitution provides that the COA shall have the power, authority and duty to examine, audit, and settle all accounts pertaining to the revenues and receipts of, and expenditures or uses of funds and property, owned or held in trust by, the government or any of its subdivisions, agencies or instrumentalities, including government-owned and controlled corporations with original charters.

Section 3 of the same provision mandates that no law shall be passed exempting any entity of the government or its subsidiaries in any guise whatever or any investment of public funds from the jurisdiction of the COA. This means that both the president and the vice president, as well as the Senate and the House, and the Supreme Court are not exempted from the COA audit.

Confidential funds are public funds. They are not exempted from COA audit, but the audit of their transactions are not the same as the normal process conducted by COA for other government agencies and funds. Auditing of confidential and intelligence funds are handled by a special unit of auditors reporting directly to the Chairman of COA. It is called the ICFAU or the Intelligence and Confidential Fund Audit Unit.

The audit is limited to post audit or a meticulous review of the spending records and documents of the unit being audited. The documents are put inside sealed envelopes so as to respect the confidentiality of the transactions and protect the security of informers and confidential sources of critical security information. But respecting the agency does not mean that the auditors shall compromise the need for accountability of the disbursing officers and heads of agencies in the use, disbursement and spending of the funds.

There is also a need for the head of agency to sign a sworn declaration under oath certifying that the purpose for the disbursement has been achieved and that the funds were properly utilized, Regular store purchases require the submission of official receipts and not mere acknowledgement receipts. Liquidation reports are required to be submitted on time, failing in which may give rise to a disputable presumption that the funds were diverted to personal use.

The agencies, including the OP and the OVP, are duty bound to submit in due time the correct and accurate liquidation reports. The need to assiduously follow the strict guidelines outlined under the Joint Circular of 2015-1 signed by the COA, DBM, DILG, DND, among others. If and when an agency fails to submit the documents related to the use, disbursement and release of confidential funds, a Notice of Disallowance may be issued by the COA, and the funds should be returned to the government.

History is being made where an auditor may prove to be the vice president's most effective bearer of truth in the pursuit of justice for the people.  Let us all pray for our country in these most trying times.