Office of the Vice President (OVP) and the Department of Education (DepEd) officials purportedly asked the Commission on Audit (COA) to issue a less formal “audit query” instead of an Audit Observation Memorandum (AOM) over deficiencies in the agencies’ confidential fund submissions, a COA witness testified on Tuesday, Aug. 4.

COA auditor Roderick Wamil testified on the audit of P612.5 million in confidential funds, including P500 million released to the OVP and P112.5 million to DepEd.

Both offices were under the control of impeachment trial respondent Vice President Sara Duterte during the subject period. Tuesday was day 12 of Duterte’s Senate impeachment trial.

Wamil, formerly assigned to the COA Intelligence and Confidential Funds Audit Office (ICFAO), said Duterte’s subordinates raised the request for the softer audit action during a meeting on the second week of September 2023.

The prosecution witness recalled that the meeting was attended by OVP Chief-of-staff, lawyer Zuleika Lopez and lawyer Michael Poa, then-DepEd chief-of-staff and spokesperson. Poe is now a member of Duterte’s defense team.

Also present were COA Assistant Commissioner and ICFAO head Nilda Plaras and audit team head Gloria Camora, Wamil said.

Wamil said he was asked to attend the meeting because he was handling the audit of the confidential funds of both the OVP and DepEd.

According to Wamil, Lopez and Poa asked about the liquidation process and the supporting documents required under Joint Circular (JC) No. 2015-01, which governed the use and audit of confidential and intelligence funds.

Plaras referred them to the JC and explained that an AOM would be issued if auditors found deficiencies, Wamil said.

“They asked po if instead of an [AOM], in case may audit findings, ay audit query na lang po iyong i-issue sa kanila,” he told the court during the continuation of his direct examination by private prosecutor Lorna Kapunan.

(They asked if, instead of an AOM, in case there are audit findings, an audit query be issued to them instead.)

Wamil said an audit query was not among the audit actions provided under the joint circular. “Hindi po ako familiar sa audit query since hindi naman po siya kasama doon sa issuances under the [JC] 2015-01,” he said.

(I am not familiar with the audit query since it is not included in the issuances under JC 2015-01.)

But Wamill said ICFAO rejected the request and proceeded to issue AOMs after deficiencies were found. “Hindi po pumayag si ICFAO since hindi naman po siya sanctioned nung aming [JC] 2015-01."

(ICFAO did not agree since it is not sanctioned under our JC 2015-01.)

An AOM formally informs an agency of audit deficiencies and requires it to submit explanations, justifications, or supporting documents.

Wamil said COA personnel later attempted to serve an AOM at the OVP office, but it was not accepted because no authorized person was available to receive it.

The prosecution team is currently tackling article I of the articles of impeachment, which says that offices under Duterte's control misused P612.5 million worth of confidential funds.

Wamil earlier testified that the OVP and DepEd failed to submit documentary evidence supporting confidential fund payments for the first two quarters of 2023.

He also said both agencies reported reward payments without documents showing that information provided by informants led to successful information-gathering or surveillance activities.

For the OVP, Wamil identified P82 million in medical and food aid and P20 million in incentives or travel-related expenses that he said were not authorized uses of confidential funds.

He also cited P27 million in reward payments for the first two quarters that lacked proof of successful intelligence or surveillance operations. For the third quarter, the OVP reported another P35 million in rewards without attaching such proof, he said.

Wamil said DepEd likewise reported medical and food aid and incentives or travel-related expenses that were outside the authorized uses of confidential funds.

DepEd’s physical and financial plans also failed to identify the specific confidential activities for which the funds would be used, he said. The plans broadly listed counterinsurgency, abuse prevention, anti-illegal activities and anti-extremism or terrorism programs.

Wamil said DepEd submitted no lists identifying the schools, teachers, learners, communities, alleged illegal activities or groups covered by the programs.

He further testified that DepEd’s disbursement vouchers and liquidation reports described the spending as maintenance and other operating expenses, or MOOE, instead of confidential fund expenses. The MOOE forms part of an agency’s regular operating funds, while confidential funds are intended for confidential operations.

He also said DepEd’s cash advances were approved by then-undersecretary for Finance Annalyn Sevilla instead of Duterte as agency head, contrary to the joint circular. The respondent was education secretary from 2022 to 2024.

Wamil identified Duterte’s signatures on the OVP and DepEd disbursement vouchers, liquidation reports, accomplishment reports and certifications. He said Duterte certified that the cash advances were necessary, lawful and incurred under her direct supervision.

She also certified that the purposes of the cash advances had been accomplished and approved reports containing the questioned expenses.