COMMISSION ON AUDIT CIRCULAR NO. 77-17D - April 15, 1977

COMMISSION ON AUDIT CIRCULAR NO. 77-17D April 15, 1977

TO:All Heads of Departments, Bureaus and Offices of the National Government, Government-Owned or Controlled Corporations, Self-Governing Boards/ Agencies/Commissions, all Auditors thereof and Others Concerned.

SUBJECT:Supplement to COA Circular No. 76-17, dated February 16, 1976 as amended by COA Circular No. 76-17A, 77-17B, and 77-17C prescribing the procedures for the audit of the National Security Fund, Intelligence and Confidential Funds including Confidential Expenses charged to ordinary funds.

In order to promote the policy of collaboration and coordination with management in the responsibility of preventing irregular, unnecessary, excessive and extravagant expenditures of public funds by sharing with it the imposition of control measures, and allow flexibility of operations by ensuring the smooth flow of, and prompt action on vouchers and their supporting documents pertaining to disbursements of the National Security Fund, Intelligence and Confidential Funds, including Confidential Expenses of the National Government as well as Government-Owned or Controlled Corporations, Self-Governing Boards/Agencies/Commissions, the following procedures and requirements are hereby prescribed:

I.NATIONAL SECURITY FUND:

A -Cash advances from the National Security Fund and their liquidation shall be submitted directly to the Chairman, COA for audit. The former shall be accompanied by the following:

A-1In amounts exceeding Five Hundred Thousand (P500,000) Pesos - clearance from the Treasurer of the Philippines that there is sufficient cash available in the National Treasury to cover such amount.

A-2Copy of written directive by the President of the Philippines alloting funds for National Security purposes.

II.INTELLIGENCE AND CONFIDENTIAL FUND:

A -Subject to the rules and limitations on countersigning authority, cash advances from the Intelligence or Confidential Fund shall be audited and approved by the resident auditor of the government office/agency concerned. The date, purpose/s of the cash advance and the fund against which the same is charged shall be stated in the cash advance voucher.

B -Liquidation or replenishment vouchers shall be submitted directly, to the Chairman, COA for audit. The vouchers shall state the cash advance/s being liquidated or to be replenished and shall be accompanied by the following:

B-1Copy of cash advance voucher/s.

B-2Copy of the Request/s for Obligation of Allotment (for agencies/offices using government accounting).

B-3Disbursing Officer's Summary of Expenses Incurred. The summary shall consolidate expenses in one operation or project segregating expenses incurred in other operations or projects. Similar expenses in the same operation or project shall be lumped into one expense group. The date/s of disbursement, the nature (entertainment, purchase of info, etc.) and purpose (to get confidence of asset, to inquire into the modus operandi or hideout of criminal syndicate, etc.) of each expense group shall be briefly stated in the summary. (Sample form attached as Annex "A")

B-4Supporting Papers:

B-4(a)Purely intelligence expenses shall be distinguished from expenses merely incidental to intelligence work like entertainment, travel, etc. and non- intelligence expenses which by provision of law may be charged to a particular Intelligence or Confidential Fund.

B-4(b)In lieu of the reimbursement receipts, a certification by the intelligence or confidential officer itemizing every purely intelligence expense of his, giving a brief account of each, shall be submitted. The same shall be verified and attested to by his immediate supervisor who shall compare the itemized expenses with his report, and approved by the government agency/office head. In cases where the law vests direct supervision over operations and projects on the department head, then approval shall be made by the department head. (Sample form attached as Annex "A-1")

B-4(c)Individual representation or entertainment expenses of each intelligence or confidential officer shall be limited to a maximum ceiling to be fixed by the government agency/office head but not to exceed FOUR HUNDRED (P400.00) Pesos in any one month. A certification as to the amount incurred for each month, if any, shall be submitted in lieu of receipts. The same shall be attested to by the immediate supervisor who shall be responsible for examining the pertinent receipts to see to it that they were incurred in connection with official duty. (Sample form attached as Annex "A-2") In highly meritorious or justifiable cases, the maximum ceiling of (P400.00) a month may be exceeded provided that the supporting certification for expenses in excess of said maximum ceiling shall be approved by the department head concerned or his authorized representative. Special and group entertainment expenses shall be supported by the corresponding commercial receipts together with a certification by the officer in charge of the activity giving a brief description of the activity, its purpose and connection with the intelligence work of the agency/office concerned. The same shall be verified and approved by the agency/office head. (Sample form attached as Annex "A-3").

B-4(d)Travelling expenses shall be supported by receipts for transportation, board and lodging expenses together with an itinerary of travel to be approved by agency/office head or his authorized representative. There shall be no more claims for per diems.

B-4(e)Non-intelligence expenses authorized to be charged to a particular Intelligence or Confidential Fund shall be governed by the same regulations applicable to ordinary disbursements.

B-4(f)Disbursements from Intelligence or Confidential Fund which by provision of law are to be accounted for by mere certification of a government official may dispense with the summary of expenses requirement in II B-3, the certification to the effect that the disbursements were made for the purpose/s for which the Intelligence or Confidential Fund was intended being sufficient as supporting paper.

III.CONFIDENTIAL EXPENSES CHARGED TO ORDINARY FUNDS:

A -The procedure and requirements outlines in II-A and B shall be followed in cash advances for confidential expenses and their liquidation.

B -Insofar as requirements are concerned, Confidential Expenses of the Department of National Defense and the Armed Forces of the Philippines shall be governed primarily by COA Circular No. 77-17B and 77-17C.

C -Only allotments for Maintenance and Other Operating Expenses (02) in particular object of expenditure Other Services (06) shall be used for confidential expenses.

D -Special projects classified as confidential shall be subject to the same procedure and requirements in II A & B, and in addition, a written justification by the agency/office head as to why the same is considered confidential shall be submitted.

IV.AUDIT AND CREDIT ADVICE:

A -If the liquidation or replenishment vouchers and supporting papers are in order, the Chairman, COA or his authorized representative shall issue a credit advice addressed to the Chief Accountant thru the Auditor of the government agency/office concerned on the basis of which credits to the cash advance account of the accountable officer concerned shall be recorded in the books of accounts of the agency/office. Vouchers and supporting papers shall be retained by the Chairman, COA for safekeeping in his confidential file.

B -In the case of disbursement vouchers, the original copy shall be returned to the agency/office, a copy of which and the supporting papers shall be retained and kept in the COA Chairman's file.

V.VERIFICATIONS:

The agencies' Chief Accountants and Auditors shall verify periodically the books of accounts to see to it that the quarterly allotments, cash disbursement ceiling and the funds for the above-mentioned purposes are not exceeded.

VI.INTERNAL CONTROL MEASURES:

It shall be the responsibility of the department/agency/office head to institute internal control measures to discourage and prevent irregular, unnecessary, excessive and extravagant expenditures by their personnel involved in intelligence and confidential activities.

(SGD.) FRANCISCO S. TANTUICO, JR., Acting Chairman

Annex A

Inclusive

Date

Nature/Purpose/Operation

Amount

Operation Talaba

1-30/3/77

Purchase of info by ten (10) intelligence officers re-modus operandi of swindling syndicate in Makati.

P5,000.00

1-30/3/77

Individual entertainment expenses of ten (10) intelligence officers.

4,000.00

1-30/3/77

Confidential meeting with NISA and ISAFP agents.

1,000.00

Operation Counter-Info

1-30/4/77

Purchase of info by five (5) intelligence officers re-NPA propaganda activities in San Fernando, Pampanga.

1,500.00

1-30/4/77

Individual entertainment expenses of five (5) intelligence officers.

2,000.00

1-30/4/77

Incentive pay given to seven (7) journalists for their work in the counter-propaganda operation, etc.

3,000.00

P16,500.00

T O T A L

I hereby certify that the above summary is a full, true and correct statement of confidential disbursements taken from my cash advance/s for the period stated therein.

JOHNNY POSY

Special Disbursing Officer

Annex A-1

C E R T I F I C A T I O N

Inclusive

Date

Nature/Purpose/Operation

Amount

1-30/3/77

Purchase of info Juan de la Cruz in Escolta re-anti-counterfeiting case.

P200.00

1-30/3/77

Gave amount for operating expenses of informer to surveil suspect in fake checks case in Caloocan City.

100.00

1-30/3/77

Hired private car used in discreet inspection of suspect establishment in Olongapo City.

300.00

1-30/4/77

Wired Mr. So and So to report status of mission in Zamboanga, etc.

50.00

P650.00

T O T A L

I hereby certify further that the above expenses are actual, necessary, lawful, and reasonable and the same is authorized by office regulations.

JUAN DE LA CRUZ

Intelligence Officer I

Certified and Attested:

JOSE REYES

Chief, Intelligence Service

APPROVED:

PEDRO MAGUS

Director, Bureau of Intelligence

Annex A-2

C E R T I F I C A T I O N

This is to certify that the undersigned actually incurred the amount of FOUR HUNDRED PESOS (P400.00) for representation expenses for the period 1-30 March, 1977 in the Course of the performance of my official duties.

PEDRO GUSTO

Intelligence Officer V

Pertinent receipts verified and found in order:

JOSE RIO

Chief, Intelligence Unit

Annex A-3

C E R T I F I C A T I O N

This is to certify that the amount of One Thousand (P1,000.00) Pesos was incurred by the undersigned in holding a luncheon conference sponsored y (PEZA) participated in by the Chiefs of Civil Security Offices of the different departments, bureaus and Offices of the national government, receipt attached.

ABRAHAM ASTOR

Chief, Security Office, PEZA

Verified & Approved:

ANTONIO TRONO

Director, P E Z A