Secret fund spending: Yule parties, tree planting, gifts

MANILA, Philippines — Tree planting, gift-giving, medical missions, wheelchair distribution and Christmas gatherings were among the activities cited by the Office of the Vice President (OVP) to justify its confidential fund spending in 2022, a Commission on Audit (COA) auditor told the Senate impeachment court on Tuesday.

The liquidation documents also listed an appreciation night for Department of Education (DepEd) partners, consultations with barangay officials, and thanksgiving meetings with transport groups and persons with disabilities (PWDs).

But COA auditor Xylene Mae del Campo of the Intelligence and Confidential Funds Audit Office (Icfao) testified that none of these activities were among those authorized under Joint Circular No. 2015-01, which governs the use and liquidation of confidential funds.

Her testimony on the 14th day of Vice President Sara Duterte’s impeachment trial focused on the very activities the OVP identified in its own supporting documents as confidential operations.

On direct examination, private prosecutor Lorna Kapunan asked Del Campo to read entries from the OVP’s liquidation report for its fourth-quarter 2022 confidential fund.

Secret funds for Christmas?

One was the “Department of Education 2022 Partners Appreciation Night” in Mandaluyong City on Dec. 13, 2022.

“Appreciation night? Is that a confidential activity under the joint circular?” Kapunan asked.

Del Campo replied that it was not.

The documents also cited a Dec. 15 activity of the Knights of Rizal Supreme Council in Baguio City marking its 60th anniversary and a youth campaign on patriotism.

Other entries included a Christmas activity in Happyland, Tondo; a Christmas gathering and extension-office meeting in Barangay 101, Tondo; consultations with Manila barangay chairpersons; a thanksgiving and update meeting with a tricycle operators and drivers association in Quezon City; consultations with TNVS, Angkas and food-delivery groups; and a meeting with the PWD sector.

Del Campo said the documents likewise listed tree-planting activities, wheelchair distribution, gift-giving, medical missions and other activities of OVP satellite offices.

Asked whether tree planting, Christmas parties and awards ceremonies qualified as confidential activities, she answered: “No.”

Under the joint circular, confidential funds may be spent only for specific purposes, including information gathering related to national security and peace and order, safe houses, vehicles and equipment for confidential operations, and rewards to informants under strict conditions.

According to Del Campo, the activities cited by the OVP did not fall within those categories.

Receipts, but no proof of success

The issue, however, was not limited to the nature of the activities.

Del Campo said documents showing proof of success showed activities such as festival attendance, rice distribution, medical mission hospital visits and other satellite offices’ engagements.

Former Icfao auditor Roderick Wamil testified last week that documents submitted by the OVP also failed to show proof that the supposed information-gathering and surveillance activities had actually succeeded.

Wamil said acknowledgment receipts submitted to support confidential-fund expenditures lacked documentary evidence of payment and proof of success required under audit rules.

The finding was significant because large portions of the confidential funds were reportedly used as rewards.

For the fourth quarter of 2022 alone, Wamil said the OVP spent P40 million on medicines purportedly intended as rewards. The expenditure was disallowed because medicines are not among the authorized uses of confidential funds.

The same issue surfaced in 2023.

The OVP used P42 million in the first quarter and another P40 million in the second quarter to purchase medicines. Wamil said the office again failed to submit documents showing payment and proving the success of the information-gathering or surveillance activities supposedly supported by the rewards.

As a result, the auditors questioned whether the existence of acknowledgment receipts and accomplishment reports was enough to justify the expenditures.

Prosecution spokesperson, Kabataan party-list Rep. Renee Co said the issue was no longer the absence of documents.

“There is a liquidation. There are acknowledgment receipts. There are accomplishment reports. There is an explanation,” Co told reporters after the hearing.

“The question now is what those papers really say.”

She said prosecutors were examining whether the documents complied with audit requirements, including matching dates, identifiable recipients and evidence supporting the claimed confidential activities.

Co also pointed to questions involving the names appearing in the receipts, the timing of transactions and what she described as the apparent physical impossibility of disbursing large sums in multiple locations on the same day.

Money spent before release

Another issue raised during Del Campo’s testimony involved the timing of the expenditures.

The OVP received P125 million in confidential funds for the fourth quarter of 2022 and was authorized to use the money from Dec. 21 to 31 after the allocation was withdrawn on Dec. 20.

Yet some activities cited in the liquidation documents were dated as early as Dec. 13.

Presiding officer Francis “Chiz” Escudero asked whether the activities had taken place before the confidential-fund check was encashed.

Del Campo replied that documents showed activities from Dec. 13 to 18, outside the authorized utilization period.

She added that even if the activities had otherwise qualified as confidential operations, the funds could not be used to reimburse expenses incurred before their release.

Citing Item 6.1.1 of the joint circular, Del Campo said confidential-fund cash advances cannot be used to liquidate previous expenditures.

Her testimony formed part of the prosecution’s presentation of Article I of the articles of impeachment, which alleges the misuse of P612.5 million in confidential funds allocated to Duterte’s offices from December 2022 to the third quarter of 2023.

P375M also flagged

Del Campo and Wamil both served with Icfao, the COA office responsible for auditing confidential and intelligence funds. Del Campo succeeded Wamil after his transfer to the COA Pasay office in 2024.

Icfao issued notices of disallowance covering P73 million in OVP confidential-fund expenditures for the fourth quarter of 2022 and another P375 million covering expenditures from the first to third quarters of 2023. The P73-million disallowance has since been affirmed by the COA en banc.

Prosecutors said the case now hinges on the contents of the liquidation documents themselves—what activities the OVP and DepEd claimed were confidential operations, when they occurred, who supposedly received the funds and what evidence showed that the expenditures produced the results required under the rules.

“The question now is what those papers really say,” Co said.

“We can now see the fuller picture of how serious the irregularities are—the names, the dates and the physical impossibility of disbursing that much money on a particular date in so many locations throughout the Philippines.” /cb