Government rules governing the liquidation of confidential and intelligence funds neither explicitly allow nor prohibit the use of aliases in supporting documents, a Commission on Audit (CoA) official told the Senate impeachment court on Wednesday, exposing what lawmakers said were gaps in the state’s oversight Roderick Wamil, a CoA auditor formerly with its Intelligence and Confidential Fund Audit Office (ICFAO), said CoA-Department of Budget and Management Joint Circular No. 2015-01, which set the rules for the use and liquidation of confidential and intelligence funds, contains no provision addressing the use of aliases in acknowledgment receipts and other liquidation records.

Asked by Senator-Judge Bam Aquino if the circular permitted the use of aliases, Wamil replied: “Based on the provision of the joint circular, it is neither allowed nor prohibited.”

He said that previous guidelines governing confidential funds were similarly silent on the matter. “The circular is silent,” Wamil said.

Wamil explained that ICFAO audits were conducted as compliance audits, meaning auditors determined whether submitted liquidation documents complied with the requirements of the joint circular and other applicable regulations.

“The focus of our audits is compliance. The provision of the circular is the basis of our audits,” he said in English and Filipino.

The auditor said CoA’s examination was based on liquidation reports and supporting documents submitted by agencies and did not include independently verifying whether individuals identified in receipts actually existed.

“The validation of the subjects of the audit is not included,” Wamil testified.

The Joint Circular, issued in 2015 by the CoA, DBM, National Security Council, Department of National Defense and other agencies, set the rules for the release, utilization, and liquidation of confidential and intelligence funds.

Under the guidelines, agencies are required to submit liquidation reports, certifications, and acknowledgment receipts to support their expenditures. The circular does not explicitly require auditors to verify the identities of individuals named in the documents.

Wider audit powers

The testimony prompted Senator-Judge Panfilo Lacson to call for a review and possible expansion of the government’s audit rules on confidential and intelligence funds, arguing that the current framework limits auditors to checking paperwork rather than verifying whether the expenditures were tied to legitimate intelligence activities.

Lacson, a former Philippine National Police chief who headed intelligence and anti-crime operations, questioned whether such a document-based review was sufficient to establish that confidential funds were properly spent.

“Why do you only do a paper audit and not a physical one? That seems lacking. How would you know if the signatories to the acknowledgment receipts were legitimate and not just using aliases?” he asked in English and Filipino.

“You might recommend an amendment to the Joint Circular so it won’t be lacking, in fairness to the offices and persons being audited,” he said.

Lacson also asked if auditors assigned to review confidential and intelligence funds were granted security clearances, noting that intelligence operations often involved classified records identifying informants, assets, and operatives who used aliases.

According to Lacson, such records are restricted until an operation is terminated or declassified, preventing auditors from examining information that could have established whether a project actually existed and whether expenditures were connected to legitimate intelligence work.

“How can you audit properly if you do not know the nature of the intelligence project or operation?” he asked.

Lacson suggested that after-surveillance or after-intelligence reports prepared by operatives could be recognized as evidence that a surveillance or intelligence-gathering activity had been successfully conducted.

Wamil replied that the Joint Circular does not require any specific document to establish that an intelligence operation was successful. Instead, auditors determine compliance by examining whether there is a “causal link” between information supplied by an informer and the outcome of an operation.