RE: REPORT ON THE FINANCIAL AUDIT CONDUCTED AT THE MUNICIPAL TRIAL

COURT IN CITIES, CEBU CITY

A.M. NO. P-17-3746, August 28, 2019, PER CURIAM

DOCTRINE OF THE CASE

Dishonesty is the disposition to lie, cheat, deceive, or defraud; untrustworthiness;

lack of integrity; lack of honesty, probity or integrity in principle; lack of fairness and
straightforwardness; disposition to defraud, deceive or betray. Misconduct is a
transgression of some established and definite rule of action, a forbidden act, a dereliction
of duty, unlawful behavior, willful in character, improper or wrong behavior. It is grave
when it involves any of the additional elements of corruption, willful intent to violate the
law, or to disregard established rules.

FACTS

The regional office in Cebu of the Commission on Audit reported that not all
collections of the Municipal Trial Court in Cities (MTCC), Cebu City were deposited on
time. Consequently, a team conducted a financial audit in the Office of the Clerk of Court
(OCC), MTCC, Cebu City. The objectives of the audit were to, among others, determine
the accuracy and regularity of the cash transactions, determine if all the judiciary fund
collections have been deposited in full within the prescribed period and to determine if the
filing fees were collected in accordance with the circulars in effect at the time.

The team compared the official receipts from the records of the Property Division,
Office of the Administrative Services (OAS) and OCA as against the official receipts that
the MTCC dispatched. After examining the available duplicate and triplicate copies of the
official receipts, the team discovered that alterations and erasures were made on the
official receipts of the Judiciary Development Fund (JDF) and the Special Allowance for
the Judiciary Fund (SAJF). In the course of the investigation, Macaldo and Veraque, a
records officer and a cashier, respectively, admitted that they altered the duplicate and
triplicate copies of the official receipts by understating the amount collected and modifying
the date of the transaction, which was evidenced through tampered copies of official
receipts. The team's further investigation revealed that Macaldo and Veraque handled
the financial transactions of the MTCC and Teves, a clerk of court, would just sign the
monthly reports in full trust and confidence.

Based on the team's observation that the unwithdrawn Fiduciary Fund was
P48,959,451.94 while the bank balance for the Fiduciary Fund as of October 31, 2015
was only P48,930,742.88, there was a noted shortage of P28,709.06. As a result of these
investigations, the team recommended that Macaldo and Veraque should be dismissed
due to grave misconduct and dishonesty, while Teves should be suspended indefinitely
on the same grounds. Hon. Baring-Uy was directed to monitor the financial transactions
of the court and to study and implement procedures that shall strengthen the internal
control system to safeguard the judiciary funds. A hold departure order was also issued
against Teves, Macaldo, and Veraque to prevent them from travelling abroad without
authority from this Court.

ISSUE

Are Teves, Macaldo, and Veraque liable for grave misconduct and dishonesty?

RULING

NO. While both Veraque and Macaldo are liable for grave misconduct and
dishonesty, Teves should only be liable for simple neglect. Dishonesty is the disposition
to lie, cheat, deceive, or defraud; untrustworthiness; lack of integrity; lack of honesty,
probity or integrity in principle; lack of fairness and straightforwardness; disposition to
defraud, deceive or betray. Misconduct is a transgression of some established and
definite rule of action, a forbidden act, a dereliction of duty, unlawful behavior, willful in
character, improper or wrong behavior. It is grave when it involves any of the additional
elements of corruption, willful intent to violate the law, or to disregard established rules.
Tampering of official receipts and over withdrawals from court funds are considered grave
misconduct and serious dishonesty.

Veraque was responsible for receiving court collections or payments of legal fees,
depositing the amount collected, and recording the financial transactions in the respective
official cash books. Macaldo, on the other hand, was tasked with issuing official receipts
of BP 22 cases, among others. According to the audit report, they tampered the duplicate
and triplicate copies of the official receipts by changing the date to a later one and
reducing the amount paid. Through this, they were able to obtain money which should
have been turned over to the Court but was instead used for their personal concerns.

Macaldo and Veraque's act of tampering the receipts constitutes dishonesty as it

deceived the Court into believing that lower amounts of JDF and SAJF were collected. It
also constitutes grave misconduct since Macaldo and Veraque willfully abused their
positions to misappropriate public funds for themselves. Both of them were entrusted with
the safekeeping of fees collected from litigants and the rest of the public. They should
have exercised honesty and fidelity in the performance of their duty, such being essential
to the proper administration of justice. That they were motivated by their financial
difficulties is of no moment because no personal problem can justify the misuse of public
funds. Given the gravity of their offense, nothing less than dismissal befits Macaldo and
Veraque.

Clerks of court are primarily accountable for all funds collected for the Court,
whether personally received by them or by a duly appointed cashier who is under their
supervision and control. They are liable for any loss, shortage, destruction or impairment
thereof. Should they fail to properly supervise and manage the financial transactions in
their court, they shall be liable for simple neglect of duty, which is the failure to give
attention to a task, or the disregard of a duty due to carelessness or indifference. While,
Macaldo and Veraque absolved Teves from any participation in their scheme, she is
nonetheless liable for simple neglect of duty. Teves failed to exercise the diligence
expected of her in supervising Macaldo and Veraque. Had she been more vigilant, their
transgression might have been discovered sooner or altogether prevented.