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EDITORIAL: Peace funds

IN a recent landmark decision, the Supreme Court (SC) clarified the parameters surrounding the utilization of confidential funds for peace and order concerns.

The ruling, issued on July 11 and recently disclosed, emphasized a direct connection to law enforcement agencies as a prerequisite for such expenditures.

The case in question involved the Commission on Audit (COA) and a town government in Davao de Oro province.

The local government contested a notice of disallowance from the COA, which questioned a P2.6-million cash advance for confidential and intelligence gathering activities made by Laak town’s former mayor, Reynaldo Navarro, in 2011.

The SC, in a 14-page decision, rejected claims of grave abuse of discretion against the COA.

The court underscored that factual findings from administrative bodies, such as the COA’s Intelligence and Confidential Funds Audit Unit (ICFAU), are binding unless substantial evidence proves otherwise.

Crucially, the ruling highlighted the limits set by the Department of the Interior and Local Government (DILG) Memorandum Circular No. 99-65, which dictates that confidential expenses should not exceed 3% of the municipality’s annual budget or 30% of the peace and order budget, whichever is lower.

Laak’s 2011 budget of P143.89 million set a 3% limit of P4.317 million, but the 30% limit based on the P5 million peace and order budget was P1.5 million.

The cash advance drawn by the former mayor was P4.1 million, exceeding the approved limit and resulting in a disallowance of P2.6 million.

Notably, the COA did not recognize certain expenses, including P4.24 million for “human rights advocacy” and P8.8 million for the “community development and monitoring program,” as valid peace and order expenditures.

The SC concurred, stating that these initiatives, along with meals, snacks, and cash donations, did not align with the defined scope of peace and order efforts.

The court’s decision reinforced the importance of adhering to the guidelines outlined in DILG Memorandum Circular No. 99-65.

By upholding the ICFAU’s decision to reduce Laak’s peace and order budget to P5 million, the SC asserted the need for a clear alignment between confidential funds and law enforcement priorities.

This ruling serves as a benchmark for local governments and law enforcement agencies, underlining the necessity for transparency and strict adherence to established regulations when utilizing confidential funds for peace and order initiatives.

The Supreme Court’s recent ruling on the use of confidential funds for peace and order issues sets a crucial precedent for accountability and transparency.

By emphasizing a direct connection to law enforcement agencies and upholding the guidelines outlined in the DILG Memorandum Circular No. 99-65, the court underscores the importance of responsible financial management at the local level.

The decision not only safeguards public funds but also clarifies the legitimate scope of peace and order expenditures. Rejecting claims of abuse of discretion, the court affirms the significance of respecting findings from specialized administrative bodies, such as the COA’s ICFAU, unless substantial evidence suggests otherwise.

As local governments navigate budgetary decisions, the ruling provides a roadmap for aligning confidential funds with law enforcement priorities.

It reinforces the principle that expenditures should directly contribute to maintaining peace and order, excluding activities that fall outside this defined scope.

Ultimately, this decision sends a strong message about the need for clarity and adherence to regulations in the disbursement of public funds.

It encourages a responsible approach to financial management, promoting integrity and ensuring that confidential funds serve their intended purpose in enhancing community safety and security.

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