COA clears Gatchalian on P20 million intel fund expenses

February 21 ------ The Commission on Audit has cleared Sen. Sherwin Gatchalian of P20.2 million in intelligence and confidential (I/C) liabilities allegedly incurred while serving as mayor of Valenzuela City over a decade ago. In a decision released recently, the COA-Commission Proper (COA-CP) granted the petition for review filed by Gatchalian and then-City Budget Officer Pia Febes P. Aquino in connection with the notice of disallowance (ND) on I/C fund expenditures of P20,265,700 in 2007 and 2008.

Two ND’s were issued by COA in 2015, as the audit agency noted that Valenzuela City’s expenditures for confidential and intelligence activities in 2007 and 2008 exceeded the maximum amount allowed during the time by the Department of the Interior and Local Government. Valenzuela’s Sangguniang Panglungsod authorized a total of P25 million in I/C expenditures when it passed separate ordinances in 2007 and 2008.

Gatchalian was also able to get the approval of the Office of the President, through then-Executive Secretary Eduardo Ermita, of the 2007 and 2008 “work program and financial plan for the I/C fund” for a total P25 million. Upon audit of the expenditures, the head of COA’s Intelligence and Confidential Audit Unit (ICFAU) issued notices of suspension for the expenditures and required the city government to substantiate the disbursements from the I/C funds.

While Aquino was able to submit the required documents, she failed to forward the computation of the I/C fund ceilings, prompting COA to issue the NDs. Further, the NDs were issued as auditors noted that the P12,500,000 I/C expenditure in 2007 overshot the allowable fund for the year, which was only P12,250,000 or 30 percent of the city government’s Peace and Order –Maintenance and Other Operating Expenses budget.

The 2008 ND was issued on the ground that P10,015,700 was in excess of the allowable I/C for 2008. Gatchalian and Aquino said they had not exceeded the maximum amount for the intelligence and confidential activities, arguing that the excess falls under the exemption allowed by DILG-Memorandum Circular No. 99-65. The COA-CP found the appeal meritorious as it noted that the expenditures made by Gatchalian and Aquino “fell within” limits set by the Peace and Order Program of the city government. “Finally, there was no showing that Mayor Gatchalian and Ms. Aquino committed an error in their certifications, nor was there an issue as to the availability of funds or as to the completeness of the supporting documents. Thus, the lifting of the ND is proper,” the panel headed by COA Chairman Michael Aguinaldo ruled.