A.M. No. 96-1-25-RTC




Baguio City EN BANC A.M. No. 96-1-25-RTC April 18, 1997 REPORT ON THE FINANCIAL AUDIT IN RTC, petitioner, vs. GENERAL SANTOS CITY; AND THE RTC & MTC OF POLOMOLOK, SOUTH COTABATO, respondents. PER CURIAM: This matter concerns the report and recommendation of the Office of the Court Administrator on the results of the audit of the books of account of the clerks of court of the Regional Trial Court of General Santos City, the Regional Trial Court of Polomolok, South Cotabato, and the Municipal Trial Court of Polomolok. 1. Regional Trial Court of General Santos City: The audit of the books of account of Clerk of Court Elmer D. Lastimosa showed a cash overage of P105.00 and a shortage of P196,983.49. Mrs. Eliasim J. Narvaez, cash clerk III of the RTC, explained that the overage was actually her money because she used her own money whenever there was no loose change available in her cash collections. On the other hand, with respect to the Judiciary Development Fund the audit team found that the total collections for the period April 1991 to December 1994 amounted to P2,887,384,99, but only P2,690,401.50 had been remitted to the bank so that there was a shortage of P196,983.49. The shortage was admitted by Ms. Teresita Blanco who, although holding an appointment as social welfare officer, also handled the cash collections of the court. Ms. Blanco did not record her collections before January, 1995. Documents, such as the triplicate copies of official receipts covering the collections during the period, which could shed light on the matter, were missing. Apparently, Ms. Blanco destroyed them to conceal her misappropriation. Nevertheless, other evidence shows that the collections from April 1991 to June 1995 (except the months of May 1992 and July, 1993, which could not be determined because no other evidence covering these periods could be found) amounted to P2,887,384.99. On the other hand, based on the subsidiary ledgers of the Accounting Division and the certification of the Philippine National Bank General Santos City Branch, the total remittances were found to be P2,690,401.50. There was, therefore, a shortage of P196,983.49. The Clerk of Court, Atty. Elmer Lastimosa, said that he was surprised by the discovery of the shortage and that he did not know how it was incurred. According to him, Ms. Teresita Blanco was already performing the work of cash clerk, handling the funds of the court, on July 8, 1991 when he became the clerk of court. Atty. Lastimosa explained that he did not want to antagonize the members of his staff by changing the system already in place. Besides, he did not know accounting procedures and he simply assumed that the staff members knew what they were doing. He trusted Ms. Blanco because she is the godmother of his oldest child. He enjoined his staff to do their duties faithfully. Upon discovery of the defalcation, Atty. Lastimosa said he demanded from Ms. Blanco restitution of the amount. As already stated, Ms. Teresita Blanco admitted the shortage and the amount thereof. She claimed that she used part of her collection to defray the hospital expenses of her two-day old niece who suffered a viral infection. Her sister, who is the mother of the child, is a public school teacher depending on her meager salary for their livelihood, while the latter's husband is jobless. Ms. Blanco said she intended to repay the amount she had "borrowed" 1 from her collection, but, before she could do so, her brother-in-law living in Balagtas, Bulacan, died. She was forced by circumstance to use some of her collection to pay for the transportation of her family from Koronadal, South Cotabato, to Bulacan. In addition, Ms. Blanco said she loaned money taken from her collection to her co-employees, because otherwise they would "fall prey to loan sharks or usurers charging interest rate ranging from 10% to 21% a month." 2 Ms. Blanco was certain that her co-employees would repay the amounts they borrowed. Ms. Blanco paid a total of P105,520.87, leaving a balance of P91,462.62. Checks, corresponding to her salaries and bonuses for the period August 1, 1995 to May 16, 1996, in the amount P52,340.49, were withheld after discovery of the shortage. During this period, Ms. Blanco did not work. She was on vacation leave from August 1, 1995 up to October 31, 1996 but she did not report for work until October 24, 1996, after she had been ordered to do so. On the basis of the foregoing facts, the OCA recommends that: 1. Ms. Teresita C. Blanco, Social Welfare Officer II, be dismissed from the service with forfeiture of all retirement benefits and with prejudice to reemployment in any national or local office of agency of the Government, including government-owned or controlled corporations, for misappropriating the amount of P196,983.49 from the JDF collections of her court; 2. accept Ms. Blanco's deposit of P105,520.67 with the Land Bank of the Philippines' General Santos City branch last December 4, 1996 as partial restitution of the amount of P196,983.49 which she misappropriated from the JDF collections of her court; 3. the cash value in the amount of P52,340.49 of all the Land Bank of the Philippines Checks (itemized listing found on page 21 of this Memorandum) due Ms. Blanco, for her vacation leave with pay, sick leave with pay and other benefits due her for the period August 1, 1995 to May 16, 1996, be used to pay the amount of P196,983.49 which she misappropriated from the JDF collections of her court; 4. the net salary due her, for the period October 24, 1996 to the date the Court finally decides her fate, be likewise used to pay the amount of P196,983.49 which she misappropriated from the JDF collections of her court; and 5. Atty. Elmer D. Lastimosa, Clerk of Court VI, RTC, General Santos City, South Cotabato be fined one (1) month's salary for his negligence in the handling of the court's JDF collections; . . . Ms. Blanco is guilty of dishonesty and should be dismissed from the service, with prejudice to her reinstatement in the government, and all leave credits and retirement benefits due her forfeited, as recommended. As recommended also, the amount of P105,520.87, which she deposited on December 4, 1996 in the Land Bank of the Philippines General Santos City branch, should be credited to her account so that her liability for the period in question should be reduced to P91,462.62. Rule XIV, Section 9 of the Civil Service Rules provides: The penalty of dismissal shall carry with it cancellation of eligibility, forfeiture of leave credits and retirement benefits, and the disqualification for reemployment in the government service. Further, it may be imposed without prejudice to criminal or civil liability. Although the amount of P52,340.49 corresponds to Ms. Blanco's salaries, nonetheless it is subject to forfeiture under this Rule because it actually represents the money value of vacation leaves, considering that during the period in question, she was either on vacation leave or was absent without leave (AWOL). The amount cannot, therefore, be applied to the payment of shortage as the OCA recommends it should be. Recommendation No. 4 is well taken. The salary which Ms. Blanco has earned since her return to work on October 24, 1996 until her separation from the service should be applied to the payment of her liability consistent with Rule XIV, Section 9 of the Civil Service Rules. The Court agrees that the misappropriation of funds pertaining to the Judiciary Development Fund by Ms. Teresita Blanco constitutes malversation under Article 217 of the Revised Penal Code. Her intention to repay the amount cannot erase her criminal liability. 3 The Court Administrator should take steps for the criminal prosecution of Ms. Blanco. With respect to recommendation No. 5 of the OCA, the Court finds that Atty. Lastimosa is guilty not only of negligence but also of inefficiency and incompetence in the performance of official duty. Apparently lost on him was what this Court stated in OCA vs. Bawalan: 4 The Office of the Clerk of Court performs a very delicate function, that of being the custodian of the court's funds and revenues, records, properties and premises. Being the custodian thereof, the clerk of court is liable for any loss, shortage, destruction or impairment of said funds and properties. . . . Section 7, Rule 136 of the Rules of Court requires that "the clerk shall safely keep all records, papers, files, exhibits and public property committed to his charge. . . . , By virtue likewise of his duty as custodian of the court's funds, respondent had no justification whatsoever for leaving the collection and issuance of receipts for legal fees to Emy Austria. It devolves upon him to personally attend to the collection of the fees, the safekeeping of the money thus collected, the making of the proper entries thereof in the corresponding book of accounts, and the deposit of the same in the offices concerned. These duties he had to discharge notwithstanding his admission or pretension that since he has no knowledge of accounting rules and regulations, he was constrained to rely on the assistance of his designated collecting officer. The collection of legal fees, by its nature, is a delicate function of clerks of court as judicial officers entrusted with the correct and effective implementation of the regulations thereon. Functionally, the work involves the examination and verification of every pleading and document to determine with accuracy the amount of collectible revenues or fees which by law properly belong to the Government. Atty. Lastimosa's dependence on his staff members for the performance of his duties cannot be justified by the fact that he is young, has just been admitted to the bar, and is new on the job. His duties are spelled out in Chapter VII, Section B of the Manual for Clerks of Court. As the Court Administrator observed: While it may be true that the Clerk of Court item was his first job and he may not want to have antagonized the OCC employees who were there ahead of him, the fact is he IS the Clerk of Court and should have — even if he had not participated in any Court-sponsored seminar wherein he would have been told about his financial responsibility — looked at the cash records very carefully and asked Ms. Blanco to always give to him duplicate copies of all collections receipted for. This is only common sense where money matters are concerned for any person accountable for the same. Or he should have appointed a cash clerk of his own confidence after conducting a cash count and inventory as soon as he had assumed office. Atty. Lastimosa has shown lack of administrative leadership and ability, judged by the nature of his work and position, and his duties and responsibilities. Instead of fine equivalent to his salary for one month, as recommended by the OCA, Atty. Lastimosa should be suspended for six (6) months and one (1) day in accordance with Rule XIV, Section 23, in relation to Rule XIV, Section 17, of the Civil Service Rules. 2. Regional Trial Court of Polomolok, South Cotabato: The audit team of the OCA found irregularities consisting of (a) failure to deposit collections of the court in the Land Bank of the Philippines and (b) the use of such collections to encash the checks of private individuals. Atty. Antonio Tagami is the Clerk of Court of the Regional Trial Court of Polomolok, South Cotabato (Branch 39). He admitted opening an account in the Rural Bank of Tupi, but sought to justify his action on the ground that this was done with the knowledge and consent of the presiding judge, allegedly because the vault supplied by the Court could not be opened. He claimed that the choice of the rural bank as temporary depository was based on the fact it is the nearest, being less than 200 meters away from the RTC, while the Land Bank of the Philippines, the official depository of government funds, is 4.5 kilometers away and the only means of transportation is by tricycle. Atty. Tagami claimed that after their collections reached P500.00, the funds were transferred to the LBP. Atty. Tagami denied that money belonging to the court was used to encash check. While the personal check of a certain Nympha Macalilong was found during the inventory, he claimed this was an isolated incident. According to Atty. Tagami, what he had done was to give advances ("vales") to the members of his staff from his collection but the amounts were later deducted from their salaries. He explained that the personal check of Nympha Macalilong was not redeemed because of lack of time. He said: Prior to July 20, 1995, an information reached our Office that a surprise audit will be conducted by the Fiscal Audit Division of the Office of the Court Administrator, so, I alerted my staff to pay their corresponding obligations which was readily complied with, except one who has no cash that time, but she has a check in her possession, and the same was made as payment for the sum borrowed by her. The check is now the subject of this explanation, as said check was not encashed prior to the surprise audit. The said check after all was a good check. Upon instruction of the Fiscal Audit Division, the account with the rural bank was closed by Atty. Tagami. The OCA does not believe the claim that although the collections were deposited in the rural bank they were later transferred to the Land Bank of the Philippines as soon the amount reached P500.00. The funds were not deposited in the LBP at all. Instead, the OCA believes Atty. Tagami was simply unaware of Administrative Circular No. 8A-83 issued April 21, 1993, as well as Administrative Circular No. 5-93 issued April 30, 1993, which requires clerks of court of lower courts to deposit their collections in the Land Bank of the Philippines. The OCA notes, however that per the audit report, all the funds of the court were accounted for. The OCA also states that the Commission on Audit "has no objection" to the giving of advances ("vales") to court employees out of the court collections provided that checks used to pay the advances are issued by the Court or government financial institutions. The failure to deposit the funds of the court in the LBP cannot be excused by the fact that the LBP branch in Polomolok is 4.5 kilometers from the court. If there was a problem of transportation, the matter should have been brought to the attention of the court. Nor can it be due to ignorance of the abovementioned circulars, considering that these circulars have been in existence since April, 1993 and Atty. Tagami is chargeable with knowledge of such circulars. Rather the Court is convinced that the funds were not deposited in the LBP because they were used for lending operation. The use of public funds for the purpose of giving advances ("vales") to employees can under no circumstance be justified. As this Court pointed out in Meneses vs. Sandiganbayan: 5 The grant of loans through the "vale" system is a clear case of an accountable officer consenting to the improper or unauthorized use of public funds by other persons, which is punishable by the law. To tolerate a such practice is to give a license to every disbursing officer to conduct a lending operation with the use of public funds. There is no law or regulation allowing accountable officers to extend loans to anyone against "vales" or chits given in exchange by the borrowers. On the other hand, the General Auditing Office (now the Commission on Audit) time and again, through repeated office memoranda and rulings had warned against the acceptance of "vales" or chits by any disbursing officer because such transactions are really forms of loans (Memorandum Circular No. 570, June 24, 1968, General Auditing Office). It is true that the funds of the court were all accounted for, but this was because Atty. Tagami and his staff got wind of the surprise visit ahead of time and had been able to prepare for inspection. Still, the personal check remained unpaid or unredeemed. Atty. Tagami's claim that the loan to the employee was an isolated case cannot be given credit, given what we have found in this case. The discovery of a personal check of Nympha Macalilong exposes the anomaly in the grant of "vales". The OCA recommends that Atty. Tagami be fined P1,000 and warned that commission of the same offense will be dealt with more severely. The Court considers this to be too light a penalty to be imposed for his violation of the law and the rules. He is guilty of misconduct and, in accordance with Rule XIV, Section 23 should be suspended for six (6) months, with warning that repetition of the same act would be punished more severely. 3. Municipal Trial Court of Polomolok, South Cotabato: The Audit team found that: (a) Clerk of Court Evelyn Trinidad kept her collections in her bag depositing them once a month in a time deposit account; (b) She issued only one receipt for the entire collection in a day and, for one year (from April, 1993 to April, 1994), gave no official receipts at all for fiduciary collections; (c) Not all the fiduciary collections for the period May 1994 to July 1995 were deposited in the bank, as shown by the fact that the total amount shown in the receipts exceeded the amounts recorded in the cashbook and the amounts deposited in the bank. There was an overwithdrawal of deposits of the fiduciary fund as even the interests earned by the deposits were withdrawn; (d) Ms. Trinidad did not regularly remit her collections and incurred a shortage of P1,752.39 in the Judiciary Development Fund; and (e) She allowed Judge Orlando A. Oco to keep custody of her collections. Ms. Trinidad claimed that she kept the collections in her handbag because the MTC did not have a safety vault for the purpose; that she could not go to the Land Bank of the Philippines everyday to make deposits because of her other duties as clerk of court. For this reason, she deposited her collections only once a month. She stated that this was also the reason why her remittances were irregular. She explained that there was no cash clerk designated to attend to collections. She further explained that she issued only one receipt for the entire collection for the day because there was a shortage of receipts and she had to economize while waiting for her requisitions to arrive. As for the fact that no official receipts were issued for fiduciary collections from April, 1993 to April 1994, Judge Oco explained that they thought that there was a separate form for these receipts for which a request was allegedly made by Ms. Trinidad to the Supreme Court. Judge Oco claimed that pending arrival of the forms, he acknowledged receipt of amounts deposited by litigants by way of bonds, consignation of payment, etc. in orders issued by him, stating the date, amount, and purpose of the payment. To secure money paid to litigants by way of bonds in pending cases, Judge Oco said Ms. Trinidad placed the collections in the name of the court in several time deposits which she did not know was in violation of the circulars of this Court. With respect to the fiduciary fund, Judge Oco further explained that the discrepancy between the amounts stated in the receipts of the fiduciary fund and the amounts deposited in the bank and reflected in the cash book was due to the withdrawals of bonds which had already been cancelled. As for the alleged overwithdrawal, Ms. Trinidad explained that the interests were not withdrawn but only transferred to the account of the National Treasury in the Land Bank of the Philippines. Ms. Trinidad attributed the apparent shortage to a possible error in addition made by the Fiscal Audit Division, but she claimed that, in any event, she paid when the auditor found the shortage. As for the charge that she allowed Judge Orlando A. Oco to control the funds of the court, she explained that she kept the certificates of time deposit (CTDs) and other court records in the drawer of the judge's table because its lock was sturdier than that of her own drawer. Keeping the CTD there would enable Judge Oco to give information whenever litigants inquired about their bonds without having to call her. Despite its findings of anomalies in the Municipal Trial Court of Polomolok, the OCA has not submitted a recommendation pending verification of a discrepancy in the amounts stated on the front and back sides of CTD No. 228991 issued by the LBP. This certificate is in the name of the court and is for P27,516.55. However, the extension agreement on its reverse side shows an amount which as of July 5, 1995 and after two extensions is P548,067.24. When required to produce the amount of P548,067.ℒαwρhi৷24, Ms. Trinidad submitted a copy of CTD No. 228992, which is in the name of the Municipality of Malungon and is for the amount of P541,594.07 but as of July 5, 1995 increased to P548,067.24. The CTD was accompanied by a certification by Erlinda V. Mission, Branch Head of the LBP at Polomolok, that the amount shown on the reverse side of CTD No. 228991, is erroneous and does not really pertain to CTD No. 228991. The Fiscal Audit Division suspects that there is a conspiracy between Judge Orlando A. Oco, the acting Municipal Circuit Trial Court Judge of the 4th MCTC at Malungon-Alabel, and the municipal treasurer of Malungon to use the court's funds. It points out that there is a Land Bank of the Philippines branch in Alabel, which is only 8 kilometers from Malungon, but the deposit of the funds of the Municipality was made at the Polomolok branch which is 44 kilometers away. For this reason the OCA recommends that: 1. The Polomolok Branch Manager of the Land Bank of the Philippines, Ms. Erlinda V. Mission, be directed to furnish the Court, within ten (10) days from receipt, certified true copies of the bank's file copies of Certificates of Time Deposit Nos. 228891 and 228992 [front and back] in accounts with said branch, together with certified copies of the bank's ledgers with respect to the transactions entered into by the bank and the parties who opened the time deposits concerned, including a history of the parties who opened the time deposits and, if a local government unit is concerned, a copy of said local government unit's authorization for the opening of said time deposit. The OCA recommends that, in the meantime, administrative action against Clerk of Court Evelyn Trinidad and Judge Orlando A. Oco be held in abeyance. The Court finds no necessity for securing a certification. The Branch Manager of Land Bank of the Philippines at Polomolok has already certified that the amount of P548,067.24 shown on the back of CTD No. 228991 is an error in posting and that it pertains to a different account (CTD No. 228992) in the name of the Municipality of Malungon. This certification is entitled to full faith and credit in the absence of anything to show that if is false. Why the municipal treasurer of Malungon chose to deposit the amount in Polomolok branch when there is a nearby branch is not the Court's concern, especially since inquiry into the bank deposits of other parties is prohibited by the confidentiality of bank deposits. WHEREFORE, the Court RESOLVED as follows: (1) To find Ms. Teresita Blanco, social welfare officer I, guilty of dishonesty and order her dismissal from the service with forfeiture of all leave credits and retirement benefits, including the amount of P52,340.49, and disqualification for reemployment in any government office, including government owned and controlled corporations; (2) To apply any amount due her from October 24, 1986 as salaries to the payment of her shortage; (3) To find Atty. Elmer Lastimosa, clerk of court VI, guilty of gross neglect of duty, inefficiency and incompetence in the performance of his duties and order his suspension for six (6) months and one (1) day; (4) To find Atty. Antonio Tagami, clerk of court VI, guilty of misconduct and order his suspension for six (6) months with warning that a repetition of this or a similar offense in the future will be dealt with more severely; (5) To order the Office of the Court Administrator to take appropriate steps for the possible criminal prosecution of Ms. Teresita Blanco, Atty. Elmer Lastimosa and Atty. Antonio Tagami, for malversation of public funds as may be warranted by the facts and to report on the action taken within 90 days from notice hereof; (6) To refer the audit report of the MTC of Polomolok back to the Office of the Court Administrator for reevaluation, with instruction to submit a report and recommendation within 90 days from notice hereof. Let a copy of this decision be attached to the personnel records of Teresita Blanco, Elmer Lastimosa, and Antonio Tagami. SO ORDERED. Narvasa, C.J., Padilla, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza, Francisco, Panganiban and Torres, Jr., JJ., concur. Hermosisima, Jr., J., is on leave. Footnotes 1 Rollo, p. 233. 2 Ibid. 3 See Gano vs. Leonen, 232 SCRA 98 (1994); Ferriols vs. Hiam, 225 SCRA 205 (1993). 4 231 SCRA 408, 411-412 (1994). 5 232 SCRA 441, 446 (1994). The Lawphil Project - Arellano Law Foundation