Legislation seeks stricter oversight of confidential funds, holding agency heads accountable for misuse
MANILA, Philippines — Members of the House good government committee filed two bills on Wednesday, December 11, seeking to tighten the rules on confidential funds and impose stiffer penalties for misuse.
This came after the congressional panel, investigating the Office of the Vice President (OVP) and the Department of Education (DepEd), uncovered "red flags" in the management and accounting of confidential funds spent in 2022 and 2023.
Under Vice President Sara Duterte's leadership, the OVP and DepEd spent a combined P612.5 million in confidential funds: P500 million by the OVP and P112.5 million by the DepEd.
Lawmakers have expressed concern over the "excessive" expenditure of confidential funds on safehouse rentals and maintenance, as well as their allocation for relief goods and medical supplies.
They have also questioned the veracity of payment documentation, citing numerous inaccuracies, the use of "fictitious" names and unverifiable identities, and instances of repeated signatures for different individuals on acknowledgment receipts.
Given these findings, which lawmakers believe suggest "fraudulent" and "inappropriate" use of funds, the committee proposed two bills to ensure proper use of confidential funds and hold those responsible for misuse accountable.
The two bills filed are:
- House Bill 11192 or the Confidential and Intelligence Funds Utilization and Accountability Act
- House Bill 11193 or the Special Disbursing Officers Accountability Act
Limited to agencies responsible for national security
House Bill 11192 aims to limit confidential and intelligence fund allocations to agencies tasked with national security, peace and order, and intelligence gathering, as outlined in the General Appropriations Act or the national budget.
It also explicitly prohibits the use of confidential and intelligence funds for non-security-related purposes, including political activities or personal expenses.
The bill also sets a threshold on confidential fund allocations, limiting them to a maximum of 10% of an agency's total annual budget. Exceptions to this threshold can only be made through specific legislation.
Agencies with confidential funds will be required to submit summarized reports while maintaining necessary confidentiality. However, all information on these funds will be declassified if the Commission on Audit (COA) issues a notice of disallowance.
To be notified of disallowed funds means that state auditors have found "illegal, irregular or improper" use of confidential or intelligence funds. This notice also requires an agency to return the disallowed funds to the government.
The bill specifies that declassified information regarding confidential fund use will be open to inquiry and investigation. The related documents will be made public, and accessing them will not require a “compulsory process.”
Failure to submit required documents and reports, or delegating fund disbursement to unauthorized individuals, will constitute prima facie evidence of misuse.
Who will be liable? Joint Circular 2015-0, which outlines the guidelines for confidential funds use, mandates special disbursing officers to deliver payments and ensure proper documentation, making them accountable for misuse.
However, the bill also holds agency heads accountable for misuse, regardless of whether it is intentional or due to negligence.
Penalties. Those found liable will face permanent disqualification from holding office, forfeiture of benefits, and a 20-year prescription period for any offenses or crimes punishable under this bill.
Holding special disbursing officers accountable
Meanwhile, House Bill 11193 explicitly prohibits delegating the disbursement of funds to anyone other than the designated special disbursing officer.
The bill also states that prima facie evidence of fund misappropriation arises if funds are improperly transferred, not fully liquidated, or used for purposes unrelated to national security, peace and order, or law enforcement.
Like House Bill 11192, agency heads will be “jointly and severally liable” with the special disbursing officer in cases of misuse and misappropriation of funds.
This proposed legislation penalizing special disbursing officers stems from the committee's finding that OVP and DepEd personnel merely "disbursed" the confidential funds to security officers, who then delivered the payments.
RELATED: DepEd, OVP disbursing officers: 'Security officers' handled confidential funds
The good government committee began investigating the OVP's use of confidential funds after it was revealed during a budget hearing that the COA disallowed P73 million of the P125 million spent in just 11 days in December 2022.
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