The truth about the VP’s ‘P125 million’ confidential funds

WELL, the truth in essence is that the criticisms are brazen propaganda fake news, accepted as true by the naïve and intellectually lazy, and spread most recently by Makati Business Club Executive Director Apa Ongpin.

I’m glad though that there has been a revolution in media that we call social media, which has encouraged intelligent people to disseminate their research and analysis, spreading truth to counter the biased reportage of traditional media.

There are several factors that allow such social media commentators to write very truthful and accurate analytical pieces. First, they’re not subject to potential and actual censorship by the big business owners of traditional media. Second, most of them are not full-time journalists, and are professionals and in fields (academic for instance) that have given them the intellectual tools and body of knowledge to be able to write knowledgeably about an issue, instead of believing what ruling-class propaganda says. And third, unlike newspaper opinion pieces that are required not to exceed 1,200 words because of the obvious space constraints, social media commentators can write more words (at least on Facebook) to fully explain their views, with the only constraint being their calculation of the reader’s attention span.

The downside of social media writers is that many of them don’t get to be read by too many people.

A good example of these writers I respect very much is Anthony Ludalvi Vista, who is an international lawyer and criminal law professor. Although he is now based in Canada (which makes it very unlikely he is with Sara’s information team), he was formerly a special prosecutor who handled high-profile cases. To illustrate my point regarding the downside of such writers, his Facebook page has just 11,000 followers, small compared to my two Facebook pages which have 200,000 while my X account has 42,000.

I urge my readers to follow Vista’s page; he has written excellent analytical pieces on the burning issues of the day.

Vista’s piece on Sara Duterte’s P125-million confidential fund follows in full, although I have put in italics statements that I think must be emphasized:

Vista piece

“The P125 million ‘confidential fund’ issue involving Vice President Sara Duterte has generated wide public debate. Yet under Philippine audit law, not every missing or incomplete receipt means corruption. “To understand the issue correctly, one must know how the Commission on Audit (COA) actually works and how its findings are treated by law.

“As of today, there is no record that COA has referred this case to the Office of the Ombudsman for prosecution. In Philippine procedure, that is important: without a referral from COA, there can be no formal finding of corruption.

“Under Article IX-D, Section 2 of the 1987 Constitution and Presidential Decree 1445 (Government Auditing Code), COA is the sole authority that can examine, audit and settle government accounts. It determines whether public funds were properly spent.

“COA’s power is exclusive. Neither Congress nor any other government agency can replace its judgment when it comes to deciding if spending is regular, necessary or properly documented. “The Office of the Ombudsman, which prosecutes corruption cases, relies heavily on COA’s audit findings as its main evidence. In fact, COA’s Notice of Disallowance (ND) or audit report is often the key document used by the Ombudsman when filing graft or malversation cases. If COA finds no irregularity, the Ombudsman has no accounting and audit basis to charge anyone, except when non-accounting evidence arises.

COA

“When COA sees that an expense is irregular, unnecessary, excessive or lacking in documentation, it issues a Notice of Disallowance. This means the spending is questioned, and the official concerned may be asked to justify or refund the amount. It is not a criminal charge, but an administrative audit result.

“If the official disagrees, they may appeal to the COA division and later to the commission proper. Only when COA concludes that the act shows clear intent to commit corruption — like graft, malversation or falsification — does it refer the case for possible prosecution.

“In August 2024, COA issued Notice of Disallowance 2024-002-100, covering P73.2 million of the P125 million confidential fund used by the Office of the Vice President (OVP) in 2022.

“The questioned amount came from COA’s audit findings that some acknowledgment receipts were incomplete — some lacked names, signatures or dates — particularly those covering ‘rewards’ and ‘safe-house rentals.’ These expenses were related to confidential or security operations. Because of the missing details, COA partially disallowed P73.2 million, representing the portion of the fund that did not fully meet paperwork requirements.

“It is important to note that P51.8 million of the P125 million was not disallowed, meaning COA found that portion properly supported and liquidated. This shows that the disallowance was based only on technical documentation issues, not on misuse, personal gain or corruption.

“There are also no other pending disallowances involving the OVP or the Department of Education confidential funds for 2022 and 2023. “The P73.2 million remains the only questioned amount, and it may already have been resolved or settled, though COA has not yet released an official update.

“Confidential and Intelligence Funds (CIFs) are governed by Joint Circular 2015-01 (COA, Department of Budget and Management, Department of the Interior and Local Government, Governance Commission for Government-Owned or -Controlled Corporations and Department of National Defense). These funds cover sensitive operations connected to national security, law enforcement and intelligence gathering.

Rules

“Their accounting rules are different from normal government funds. Instead of detailed receipts, they only require acknowledgment receipts, certifications or summary liquidation reports. The names of people or places involved can be coded or redacted for security reasons. Because of this, incomplete or coded receipts are normal in CIFs.

“COA usually performs post-audits of CIFs and issues audit observation memoranda before deciding if any expenses should be disallowed.

“Therefore, irregular-looking receipts in CIFs do not automatically indicate corruption — they often reflect the confidential nature of the fund’s purpose. The OVP received a clean or unmodified audit opinion from COA for both 2022 and 2023. A clean audit means that the financial statements were organized, supported by documents and fairly presented according to accounting rules.

“This does not mean that every peso spent is perfect, but it shows that the office’s records were transparent and in order. For an agency managing confidential funds, that is a strong sign of good documentation. It is rare for agencies with serious audit problems to receive a clean audit opinion. That COA gave such an opinion to the OVP means that the P73.2 million issue was not considered misuse or corruption, but rather a documentation issue.“If COA auditors had seen evidence of fraud, they would not have issued a clean audit. The clean audit therefore supports the view that the funds were used within authorized purposes.

“As of today, only one disallowance — the P73.2 million from 2022 — exists. The clean audit opinions for 2022 and 2023 remain valid and undisputed.

“Taken together, these facts mean there is no official COA finding of corruption. The P73.2 million disallowance is a technical audit issue, not a graft case. It remains part of the ordinary audit process, subject to clarification or settlement.

“In the current political climate, where calls for Vice President Duterte’s impeachment have gained traction, COA’s restraint stands out. If it were acting with bias, it could have easily aligned itself with the administration’s political stance. Instead, COA handled the audit according to its mandate — through documentation review, notices and audit opinions. This impartiality is why its conclusions are generally trusted as credible and professional.

Referral

“The lack of a COA referral, the clean audit opinions and the special accounting rules for CIFs all lead to one conclusion: the fund was spent within legal and confidential parameters.

“In auditing, due process and evidence determine accountability. “Without a COA referral, no corruption case legally exists. Until such a referral is made, the P73.2 million issue remains an accounting matter, not a criminal one.

“The clean audit reports from COA confirm that the OVP’s records were transparent, orderly and compliant — something that would not happen if the funds were misused. The record therefore speaks for itself: COA has made no finding of corruption.”

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PS by this columnist: Ongpin’s propaganda sound bite was actually the reports leaked by the administration that the secret funds were given to such “persons” identified as “Mary Grace Piattos,” which by its obviously invented name is fictitious. This regime’s propagandists, of course, are taking advantage of most people’s ignorance of how confidential funds are distributed. “Piattos,” etc., were aliases for the agents the confidential funds were released to in order to ensure their confidentiality. I remember when I reviewed such funds when I was in government. Confidential funds were released to persons identified as Dolphy, Pugo and James Bond. Only their handlers knew their real names. It’s a bit like introducing yourself in a shady bar as Apa instead of Rafael Alfonso Salvador Garcia.

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The truth about the VP’s ‘P125 million’ confidential funds
Source: Breaking News PH