MANILA – Senior officials of the Office of the Vice President (OVP) and the Department of Education (DepEd) sought the issuance of a less formal “audit query” instead of an Audit Observation Memorandum (AOM) over deficiencies in their confidential fund submissions, a Commission on Audit (COA) auditor testified before the Senate impeachment court.

The audit covered PHP612.5 million in confidential funds — PHP500 million released to the OVP and PHP112.5 million to the DepEd.

State auditor Roderick Wamil, formerly assigned to the COA Intelligence and Confidential Funds Audit Office (ICFAO), testified that the request was made during a meeting in the second week of September 2023 attended by OVP Chief of Staff Zuleika Lopez, then DepEd chief of staff and spokesperson Michael Poa, COA Assistant Commissioner and ICFAO head Nilda Plaras, and audit team head Gloria Camora.

Wamil said Lopez and Poa sought clarification on the liquidation process and documentary requirements under Joint Circular No. 2015-01, which governs the use and audit of confidential and intelligence funds.

He said Plaras explained that an AOM would be issued if auditors found deficiencies in the submitted documents.

“They asked if, instead of an Audit Observation Memorandum, an audit query could be issued to them in case there were audit findings,” Wamil testified.

Wamil said an audit query is not among the audit actions authorized under Joint Circular No. 2015-01.

“I am not familiar with an audit query since it is not part of the issuances under Joint Circular 2015-01,” he said.

According to Wamil, the ICFAO rejected the request because it was not sanctioned under the joint circular.

An AOM is a formal audit issuance that informs an agency of deficiencies and requires it to submit explanations, justifications, or supporting documents.

During cross-examination, Poa — now a member of Vice President Sara Duterte’s defense team — asked Wamil whether Duterte had sought an exemption from COA rules governing confidential funds.

Wamil replied that OVP representatives had requested that an audit query be issued instead of an AOM.

“That would effectively be an exemption from the provisions of the Joint Circular,” he said.

Poa later asked whether the OVP had submitted liquidation reports and responded to the AOMs issued by COA.

Wamil answered that the agency did, but maintained that its submissions remained non-compliant with the requirements of the joint circular.

Earlier in his testimony, Wamil said the OVP and DepEd failed to submit documentary evidence showing that information provided by informants resulted in successful intelligence-gathering or surveillance operations, as required under Joint Circular No. 2015-01.

He also testified that the OVP reported unauthorized confidential fund expenditures, including PHP82 million for medical and food assistance, PHP20 million for incentives and travel-related expenses, and PHP62 million in reward payments that lacked proof of successful intelligence operations.

For the DepEd, Wamil said the agency likewise charged medical and food assistance and incentive-related expenses to confidential funds, failed to identify specific confidential activities in its physical and financial plans, and described confidential fund disbursements as maintenance and other operating expenses (MOOE) in its vouchers and liquidation reports.

He further testified that then-DepEd Undersecretary for Finance Annalyn Sevilla, instead of Duterte as agency head, approved the department’s cash advances for confidential funds, contrary to the joint circular.

Wamil also identified Duterte’s signatures on the OVP and DepEd disbursement vouchers, liquidation reports, accomplishment reports, and certifications, saying she certified that the cash advances were necessary, lawful, and incurred under her direct supervision, and that the purposes of the cash advances had been accomplished.