Auditor: OVP Confidential Funds ‘Personally’ Used

Unless proven otherwise, Vice President Sara Duterte is presumed to have spent her confidential funds for personal use or benefit after her office failed to properly liquidate the funds despite a formal demand from the Commission on Audit (COA), the House prosecution said on Wednesday, Aug. 5.

Citing the testimony of state auditor Roderick Wamil, prosecution counsel Benjamin Tolosa Jr. said failure to liquidate funds creates prima facie evidence that accountable officers misused such funds or used these for personal benefit.

Wamil cited before the Senate impeachment court Item 8.3 of Joint Circular No. 2015-01, in the process creating the legal presumption on Duterte.

In law, evidence is deemed prima facie when it appears sufficient on its surface to support a conclusion, shifting the burden to the opposing party to refute it.

Tolosa said the process could begin as early as the Audit Observation Memorandum (AOM), which informs the concerned agency of missing or inadequate documents and gives it an opportunity to respond.

Wamil earlier testified about audit observations involving missing proof of payment, unsupported rewards, purchases backed only by acknowledgment receipts and categories of spending outside the circular’s allowable confidential expenses.

For his part, Deputy Speaker Paolo Ortega V said issues on the confidential funds could have been avoided if there was “complete staff work.”

Ortega said the use of aliases would have posed a different issue had the agencies preserved the records necessary to identify the real recipients and the legitimate confidential operations behind them.

Tolosa said even if Duterte returned the amounts disallowed by COA, it would not extinguish the separate constitutional questions being tried by the impeachment court.

He said impeachment proceedings determine whether the official conducted a betrayal of public trust or another constitutional ground for removal, which is different from the COA process for recovering improperly supported expenditures.

“Our allegation is misuse and fraudulent liquidation of the confidential funds. They already constitute betrayal of public trust,” Tolosa said.

However, he cautioned that the prosecution did not want to preempt how the senators would judge or evaluate a repayment or the events that produced the audit findings, adding that the defense remains free to argue that restitution has a different legal or evidential significance.

Imee Marcos shields VP

“There is a prima facie evidence,” Wamil said after Sen. Imee Marcos pointed out that COA’s initial audit warnings never explicitly used the word “stolen” and never accused the Office of the Vice President of faking receipts.

Wamil explained that because there is “presumption,” it was unnecessary to mention such.

Marcos tried to distance Duterte from the controversy by arguing that the person legally responsible for the missing funds should be the specific staff member who physically handled the cash, not the Vice President.

But Wamil stressed that the blame goes straight to the head of the agency.

“Under the Joint Circular, it shall be the responsibility of the head of the agency, first, to approve ‘yung cash advance. Second, to oversee the agency-wide utilization. Third, to ensure compliance with the Joint Circular,” Wamil told the court.

He noted that of the more than 30 government agencies he has audited, some would return their leftover confidential funds to the National Treasury while the OVP and the Department of Education (DepEd) completely drained their budgets every single quarter.

The issue stemmed from the COA’s issuance of a final decision to hand down a notice of disallowance (ND) on the OVP’s confidential funds totaling P125 million for Dec. 21 to 31, 2022.

Under questioning by presiding officer Sen. Francis Escudero, Wamil explained that once this final order is issued, the money must be paid back immediately – even if the OVP tries to fight the COA decision in court.

“If they (OVP) file a petition for certiorari before the Supreme Court, they should return it immediately,” Wamil said despite admitting that the decision isn’t final until the Supreme Court issues a ruling.

Sen. Francis Pangilinan asked, and Wamil confirmed, if the problem or controversy would have been avoided if the OVP properly liquidated the funds.

Pangilinan also highlighted the OVP’s aggressive spending habits.

Funny aliases

When Sen. Raffy Tulfo asked if the COA investigated other agencies for the use of junk food brand names like “Piattos” as recipient aliases, Wamil said, “We are document-based with no way to determine if this is an alias or not.”

Sen. Bam Aquino asked if the use of alias is allowed under their Joint Circular 2015-01. Wamil said “the circular is silent; it is neither allowed nor prohibited.”

Sen. Erwin Tulfo questioned the COA’s failure to look into the funny names as aliases like “Mary Grace Piattos, Chippy McDonald and Mickey Mouse.” The other aliases used in the acknowledgement receipts as shown to the court are “Renan Piattos,” “Mico Harina,” “Andy Lim,” “Gabriel Bisaya,” “Alejandro Pikit,” “Nova Santos” and “Patty Ting.”

Wamil said the confidential and intelligence funds audit was limited to a “compliance audit.”

Sen. Panfilo Lacson, with his extensive intelligence and law enforcement background, described the COA audit on the secret funds as a mere “paper audit.”

“No physical audit? Then how would you know if those were legitimate signatures in the acknowledgment receipts?” Lacson said, urging the COA to amend the joint circular to give more teeth on the secret funds audit.

Wamil told Sen. Risa Hontiveros it was the first time confidential funds were used to give medicine as reward to the alleged informants.

“Mary Grace Piattos,” for one, received P70,000 worth of medicine as reward money based on one acknowledgement receipt.

Hostile witnesses

The House prosecution team will call for the first time “hostile” witnesses in the impeachment trial after Escudero issued subpoenas to former special disbursing officers Gina Acosta of the OVP and Edward Fajarda of DepEd. They were directed to appear next week.

Prosecution lawyer Amando Ligutan, on “Storycon” on One News, described the two as “hostile” witnesses or those expected to testify in favor of the defense.

Acosta and Fajarda were previously identified as among those who made the cash withdrawals for the confidential funds.

Ligutan said the prosecution is “confident” with the current stage of the trial, noting that they were able to raise all points “rather successfully.”

He said there is no decision yet on whether to present as witnesses Duterte’s former aide Ramil Madriaga.

Highly unusual

Wamil said it was the first time in his 10 years auditing dozens of government agencies that he’d seen “unusual” practices like the OVP submitting zero official receipts (ORs) or sales invoices in its liquidation.

Wamil noted that the OVP submitting 849 simple acknowledgment receipts (ARs) without a single OR was unprecedented.

Compared to an OR which proves a purchase from a BIR-registered seller, an AR merely acknowledges that a person received cash for a certain service or goods.

Pangilinan also flagged the suspicious nature of the ARs, noting they were written in perfectly round figures like P250,000 and P500,000 with zero cents, which Wamil agreed was unlikely for official market purchases.

Furthermore, the OVP recorded 111 separate disbursements on a single day on Dec. 23, 2022, totaling P17 million – a pace Wamil also described as unusual.

Meanwhile, the Senate court allowed to mark as evidence the portion of the affidavit of self-confessed Duterte Death Squad hitman Arturo Lascañas and read out in open court.

Escudero denied the defense panel’s move to block the document as prosecution evidence and granted the prosecution’s request to transfer exhibit markings of portions of Lascañas affidavit from provisional copies to certified true copies. – With Marc Jayson Cayabyab, Neil Jayson Servallos, Delon Porcalla