Confidential funds needed vs cyberthreats, DICT explains

MANILA, Philippines — The Department of Information and Communications Technology (DICT) defended the use of confidential funds for surveillance amid allegations such activities went beyond its mandate.

In a statement, the DICT said on Wednesday that the confidential expense, of which P300 million had been spent in 2019, was for the “lawful monitoring and surveillance of systems and networks” in line with its functions that include cybersecurity.

Its spending on surveillance through its confidential fund was brought to light by Eliseo Rio Jr., the undersecretary who offered to resign last week over a lack of transparency in the DICT.

Rio said it was not the mandate of the DICT to conduct intelligence and surveillance work.

President Rodrigo Duterte, meanwhile, is open to meeting with anybody who has gripes against the government, Secretary to the Cabinet Karlo Nograles said on Wednesday after Rio said he wanted to speak to the chief executive about his decision to resign.

Cyber threats growing

The DICT said cyberthreats faced by the Philippines were increasing at an alarming rate, citing a study from vendor Kaspersky.

“A key component of cyber security is information gathering on our ICT systems, and aiding the government agencies involved in law enforcement and the defense of our nation and its people,” the DICT said.

“As a member of the National Security Council, the DICT is mandated to protect the nation’s critical infrastructures, its government networks both civilian and military, its small-medium enterprises to large businesses, corporations and their supply chains, and every Filipino citizen using the internet,” the DICT said.

Honasan still mum

The DITC issued the statement even as former Sen. Gregorio Honasan II, information and communications technology secretary, remained mum days after Rio questioned the disbursement of intelligence funds.

Sen. Panfilo Lacson said Honasan, named by Duterte to head the DICT after his second six-year term as senator ended in June 2019, was ready to face his erstwhile colleagues in the Senate for an inquiry into the supposed anomalous use of confidential funds of the DICT.

Lacson said he was again able to speak with his former colleague about Rio’s allegations.

“He knows it. He said that’s actually better,” Lacson told reporters when asked if Honasan was aware that he could be summoned to a legislative investigation.

Lacson and Senate President Vicente Sotto III filed a resolution on Monday reviving the Senate Special Oversight Committee on Intelligence and Confidential Funds, Programs and Activities.

Cabinet meeting

In Malacañang, Nograles said Rio’s resignation was not taken up during the cabinet meeting on Wednesday even though Honasan was in attendance. Palace photos showed Duterte shaking hands with Honasan.

But Nograles believes Duterte would be willing to meet with Rio.

“The President is open to meeting anybody. He has always said that if anybody has a complaint, Malacañang is always open to anybody who wishes to, who has any grievances,” he told reporters.

He also said mechanisms were in place to address allegations of irregularities.

There is the Presidential Anti-Corruption Commission that could motu propio look into Rio’s statements, he said. There is also the Commission on Audit (COA) and the Anti Red Tape Authority, he added.

`Covert operations’

The use of surveillance in cybersecurity remains a debatable issue since intelligence spending should be handled by law enforcement agencies.

A senior IT security expert interviewed by the Inquirer said the DICT did not need a confidential fund to carry out its mandate for cybersecurity.

“Intel funds are used for covert operations. You need intel funds to bypass things like public bidding and search warrants,”the expert said.

COA review

The DICT also said the findings of a classified COA review of the P300 million cash advances for confidential expenses did not disallow the disbursements.

“Its recommendations were procedural, pertaining mainly to the time frames for disbursement,”it said.

The COA Observation Memorandum dated Jan. 20, found that the DICT underspent last year while it flagged irregularities in cash advances in the name of Honasan.

Auditors said the DICT also failed to secure a notice of cash allocation (NCA), which is required under Joint Circular No. 2015-01 that includes the Department of Budget and Management (DBM).

Under Honasan, the DICT used a previously issued NCA to access the unspent balance of P446.2 million.

Prohibited

COA auditors said that balances could be used only to cover payments for goods and services rendered and that the use of cash advances “as reimbursement of expenses prior to the granting of the cash advance” was prohibited.

“Prudence dictates that the department should have tried securing a separate NCA for CE [cash expenses] and provide DBM with a chance to come up with a written denial or position on the matter,”the auditors said.

But apart from lacking the proper supporting document for the cash advance, the COA noted that the funds did not match the scheduled spending outlined in the Physical and Financial Plan submitted by the DICT.

It noted that DICT’s “cybersecurity programs, activities and projects” had a budget of P400 million from Oct. 14 to Dec. 13, 2019.

But the COA said the drawing of the third cash advance on Dec. 17 indicated the project was delayed since the submitted plan set “physical targets” from Nov. 13 to Dec. 13.

By the end of the year, the COA said P300 million of the total appropriated amount of P400 million had been spent and advanced for the cybersecurity programs, activities and projects (PAPs).

“The absence of proper planning and crafting of the unrealistic budget which caused the expected discrepancy between the plan and actual drawing of the funds may result in non-conduct of lined up cybersecurity PAPs due to time/budgetary constraints,” the COA auditors said.