COA Proposes Revision of Rules on Auditing Intelligence and Confidential Funds

MANILA, Philippines – The Commission on Audit (COA) is seeking to revise its 11-year-old joint circular that sets the guidelines for auditing intelligence and confidential funds. This move comes after concerns and gaps in the auditing of confidential expenses were exposed during the ongoing impeachment trial of Vice President Sara Duterte. COA Commissioner Michael Mallillin stated on Thursday, September 3, that the state auditor aims to update Joint Circular No. 2015-001. One of the key issues COA seeks to address is the supporting documents for proof of payment. During the impeachment trial, the House prosecution questioned Duterte over the lack of receipts for payments made as rewards and for information. Duterte’s office submitted acknowledgment receipts as supporting documents for these payments. State auditors standing as witnesses said they could not verify the authenticity of the purchases through acknowledgment receipts alone. The trial also revealed that Duterte’s Office of the Vice President used confidential funds for medicine and food supplies but provided no official receipts. The peculiar names in the acknowledgment receipts for the payment of information and rewards presented during the impeachment trial, such as Mary Grace Piattos, Andy Lim, and Alejandro Pikit, have drawn public attention and ridicule. Duterte’s legal team has neither confirmed nor denied whether the names on the receipts were fictitious. Mallillin said the commission may set a requirement that would allow at least a state auditor to know the actual identities of the person, “as done in foreign jurisdictions.” The new guidelines also seek to protect the identity of informants, but Mallillin stressed that there should be a balance between protecting identity and allowing COA, based on certain clearances, to examine identities without compromising national security and confidentiality. COA also seeks to address questions on the evidence of success and the causal links, which are among the requirements for the payment of rewards and information using confidential funds. The commission will also look into the storage of documents and the process of issuing credit notices and how disallowances should be addressed. During the Senate budget hearing on COA, Mallillin said the commission would coordinate with other government agencies to update the guidelines. The 2015 circular was crafted by COA, the Department of Budget and Management, Department of the Interior and Local Government, Department of National Defense, and the Governance Commission for Government-Owned and Controlled Corporations.