Sara's confidential funds as Davao mayor prompts call for end to secret auditing

MANILA, Philippines — Lawmakers are pushing for a more transparent auditing process of agencies' use of confidential funds and the imposition of a "reasonable cap" following resurfaced audit documents showing Davao City's finances during Vice President Sara Duterte's tenure as the city mayor. 

Annual audit reports from the Commission on Audit (COA) from 2016 to 2022 show that the local government of Davao City had been allocated a staggering P2.697 billion in confidential funds in total or P460 million per year.

This is larger than the confidential funds received by the country’s wealthiest cities like Makati City and Quezon City, Rep. France Castro (ACT Teachers) pointed out. Quezon City only had P435 million in confidential funds in the same time period, while Makati City had P1.25 billion.

Castro called for a probe on whether these expenditures adhered to the guidelines stipulated in COA-DBM Joint Circular No. 2015-01.

"Perhaps this is why Vice President Sara Duterte is so eager to have a confidential fund in her national office, as she may have become accustomed to such a practice during her time as mayor of Davao," Castro said.

The lawmaker also highlighted that if allocated differently, the P2.697 billion in confidential funds could have been used to provide a P1,000 city allowance to approximately 17,000 Davao City teachers for more than 13 years.

Transparency sought 

Castro said that the rampant use of the secret lump sum necessitates independent audit institutions and congressional budget oversight committees to regularly audit government financial practices.

The lawmaker also called for robust internal control systems to prevent fraud, mismanagement and corruption within government agencies and tighter protection for whistleblowers who report financial misconduct.

Sen. Risa Hontiveros also expressed her openness to studying the issues surrounding confidential funds across government levels. 

Hontiveros floated the possible imposition of reasonable thresholds on confidential funds for local government units (LGUs).

The lower chamber announced during the last day of budget deliberations for the proposed 2024 budget that it would strip Duterte’s two offices — the Office of the Vice President (OVP) and the Department of Education — of millions of confidential funds.

The development came after public clamor for transparency over how Duterte used the P125 million in confidential funds that the OVP acquired in 2022 even if it was not included in the General Appropriations Act — a budget item that the Makabayan bloc described as irregular and unauthorized.

Both the House and the Senate have decided to realign confidential and intelligence funds to agencies in charge of defending the West Philippine Sea.