COMMISSION ON AUDIT CIRCULAR NO.

77-17D
TO

April 15, 1977

: 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-1 In 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-2 Copy 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-1 Copy of cash advance voucher/s.

B-2 Copy of the Request/s for Obligation of Allotment (for agencies/offices

using government accounting).
B-3 Disbursing 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-4 Supporting 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)

III.

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.

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 remodus 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 reNPA 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

T O TAL

P16,500.00

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

CERTIFICATION
Inclusive
Date

Nature/Purpose/Operation

Amount

1-30/3/77

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

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.
T O TAL

P200.00

50.00
P650.00

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

CERTIFICATION
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

CERTIFICATION
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