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Jaca vs People FACTS.

G.R. No. 166967 / January 28, 2013 / Brion, J./ Locgov Common appointive local officials /JMB Petitioners The following Cebu City appointive officials are charged with violations
NATURE Petition for review on certiorari of 3(e) of RA 3019 and are the petitioners of the case, except Bacasmas:
PETITIONERS Edna J. Jaca, Alan C. Gaviola, Eustaquio B. Cesa Gaviola as City Administrator
RESPONDENTS People of the Philippines and Sandiganbayan, Cesa as City Treasurer
Bacasmas as Chief Cashier under the Office of the City Treasurer
SUMMARY. A surprise audit revealed that there were cash shortages in the Cebu City Jaca as City Accountant
Government brought about by Badanas scheme of double-recording vouchers and
payrolls to cover up the money she takes from the government. The petitioners are The proper process of granting cash advances to a paymaster:
implicated in the criminal and administrative investigations based on their duties The voucher:
attached to their designations. They raise the defense of the limitations of their duties, as First, paymasters request for a cash advance by preparing vouchers to be submitted
well as reliance on others that the others have faithfully complied with their jobs. OMB to the Chief Cashier. Second, the Chief Cashier affixes his initials to the voucher and
and SB found them guilty of the acts alleged in the COA report. The issue that the SC has forwards the same to the City Treasurer if the accompanying documents are in order.
to settle is WON the petitioners should be held liable for Sec. 3(e) of RA3019, taking into Third, the City Treasurer affixes his signature certifying that the expenses are lawful
account the duties imposed upon them by virtue of their designation. The SC answered and incurred under his direct supervision and is forwarded to the City Accountant.
this in the affirmative. Fourth, the City Accountant then affixes his signature after recording and conducting
The finding of gross inexcusable negligence was evident: a pre-audit. Fifth, the City Accountant then forwards the voucher, together with an
For the Treasurer for abiding to that long-standing practice of simply requiring a written accountants advice, back to the Chief Cashier for the preparation of the check.
request without being accompanied by proper supporting documents and his vital role in
the release of the funds. The check:
For the Accountant for admitting that she was just signing the vouchers in order to
First, Chief Cashier signs the check and forwards it to the City Treasurer to sign the
avoid delay EVEN when she knew that the previous cash advances were not yet properly
check and the voucher. Second, the voucher then is sent to the City Administrator
settled and accounted for.
for approval and also countersigns the check. Third, The City Administrator then
For the City Administrator for ignoring the obvious. When supporting documents are
returns everything to the cash division. Finally, the paymaster receives the check for
absent, he could have at least required its presentation. If there is a practice of some
later encashment and signs the RECEIPT PORTION (signifying that he received it.)
employees being paid weekly, it should have alerted him that there should be four
of the voucher.
payrolls prepared, instead of only two (which represent the twice a month payroll).
DOCTRINE. The City Treasurer is tasked with, inter alia, the following duties: (1) to take
The audit:
custody of and exercise proper management of the funds of the local government unit
First, the paymaster and the cash division prepare the report of the disbursement
concerned and (2) to take charge of the disbursement of all local government funds and
and record it to the cashbook. Second, COA examines the books. Finally, the cashier
such other funds the custody of which may be entrusted to him by law or other
forwards the report to the City Accountant for recording and posting.
competent authority. It is from the viewpoint of Cesas duties as a City Treasurer that
Cesas good faith should be measured, not simply from the fact that he acted because a
The city conducted a surprise audit concerning the disbursement of public funds WRT
subordinate from his office is the one asking for a cash advance. By certifying that the
salaries of Cebu City government employees. Of immediate concern is Rosalina
cash advances were necessary and lawful and incurred under his direct supervision,
Badana, who immediately absconded upon learning of the surprise audit. The audit
Cesa cannot escape the obligation to determine whether Badana complied with Section
team learned that there was a cash shortage of P18M and this was because of an
89 of PD No. 1445, although the same requirement would have to be ultimately
allegation that the petitioners violated PD 1145, LGC and some COA regulations. This
determined by the City Accountant.
moved Mayor Garcia to file with the Ombudsman a complaint against Badana for
RA No. 7160 charges the city accountant with both the accounting and internal audit
malversation of public funds. Because of this case, criminal and administrative
services of the local government unit and, among others, to (1) install and maintain an
investigations led to the implication of the petitioners for violation of Sec. 3(e) of RA
internal audit system in the local government unit (2) review supporting documents
3019.
before the preparation of vouchers to determine the completeness of the requirements
(3) prepare statements of cash advances, liquidation, salaries, allowances,
reimbursements and remittances pertaining to the local government unit (4) prepare The COA report (what did the petitioners do?):
statements of journal vouchers and liquidation of the same and other adjustments The key allegation is that the records show that cash advances were granted even if
related thereto (5) post individual disbursements to the subsidiary ledger and index the previous cash advances were not yet liquidated, in violation of the above
cards and (6) maintain individual ledgers for officials and employees of the local mentioned laws against the accumulation of excess cash in the custody of an
government unit pertaining to payrolls and deductions. accountable officer (A/N: the point - humihingi ka pa pero sobra sobra na hawak mo.)
The disbursement vouchers covering the cash advances were not supported by Good faith they didnt know that Badana was conducting this scheme.
payrolls to determine the cash advance to be granted in violation of a COA regulation The information is defective because with deliberate intent, with manifest partiality
requiring proper documentation. and evident bad faith is inconsistent with gross negligence.
Accounting records show that these cash advances were granted and taken up in Witnesses are incompetent to testify as they did not take part in the preparation of
January, 1998 while the cash returns made after granting these cash advances were the report. By extension this makes the COA report as hearsay.
taken up in December, 1997. This is contrary to the generally accepted principles of Culpability not properly established they didnt receive a prior notice of
time period which requires that accounting should be time bounded; meaning cut- disallowance to warrant them of the knowledge of the unliquidated cash advances.
off date should be properly and strictly observed. No injury is committed since no one complained that they did not receive their
Presentation of vouchers already recorded are regarded as cash items even though salaries.
they have already been used. (A/N: the way I understood it is that this refers into
double recording of vouchers to cover up / minimize the deficiency) ISSUES & RATIO.
1. WON petitioners are liable for violation of Sec. 3(e) RA 3019. YES
The scheme: (as to the specific issue, the SC had to settle WON the scope of their duties included the
Paid payrolls and vouchers already recorded in the cashbook are presented as cash power to prevent the whole scheme from happening and if so; what should they have done
items. This is done to reduce Badanas accountability as paymaster. This is possible about it.)
because Badana has access to paid payrolls and vouchers and the disbursing officer Procedural (just to get it out of the way)
not stamping PAID to all payrolls and vouchers (to prevent double usage and Rule 45 not proper since that only deals with questions of law. The review of the
double recording). Anyway, the reason why the petitioners are being tried for this defense of good faith requires a reevaluation of a question of fact.
crime is because it was alleged that it was their duty to prevent this from happening. The information is valid. Sure, the information could have used or in between
evident bad faith and negligence just so the issue isnt raised. However,
The decisions: Gallego v. SB already dealt with this issue that the way the information is
The Ombudsman found Jaca and Cesa guilty of simple neglect of duty in the admin phrased does not indict the accused of three separate crimes but rather refers to
case. As to Gaviola, his case was dismissed for being moot. the modes on how committed.
The Sandiganbayan held all four guilty of violation of Sec 3(e) of RA 3019. The COA report is not hearsay. In examining the testimony of Chan, it was found
out that he was specifically assigned to the audit of the cash and accounts of
Defenses raised: (most impt. part of the facts) Badana.
Individually:
Cesa, the City Treasurer Substantive:
He was simply following the long-standing practice that the Chief of the Cash
Division (Bacasmas) already examined the voucher and supporting documents Existence of undue injury or giving of unwarranted benefit:
before he affixes his own signature there. Petitioners: Prosecution has not established the fact of Badanas unliquidated cash
Under the LGC, City Treasurers cease to be an approving authority in the cash advances because a witness testified that the audit has not yet been completed at
advances. It is the City Accountant who can approve or disapprove cash advances or the time of the prosecution in the SB, relying on the case of Madarang v. SB.
disbursements. He signs the voucher as a requesting party and not as an approving SC: That case is different: the accused in that case was acquitted because the audit
authority. (A/N: in short, laglagan.) was not yet completed and there were accounts yet to be considered; the
Jaca, the City Accountant examination was not even done in the official station of the accused and that those
Strict compliance with the regulations is unrealistic because of the long-standing located in different areas were not included in the report.
practice of some employees being paid weekly while others are paid in 15-day
intervals. Before she can process the liquidation of a cash advance, another The present case is different because the reason why the audit was so hard to complete is
application comes in. (A/N: natabunan ng trabaho) precisely because of the irregularities found by the COA in the citys books. Nowhere does
That she has informed Cesa and the City auditor (at that time) of the unliquidated it appear that the incompleteness pertains to the scope of the audit or that the audit was
cash advances. done in a haphazard manner. After all, to explain the irregularities, Badana could have
Gaviola, the City Administrator been in the best position to explain but she is still at large so the COA had to make do with
He relied on the City Accountant that Badanas previous cash advances were properly what is has. Undue injury to the government has been established because of the
accounted for. His approval is a ministerial act done after a pre-audit and shortages.
determination of the regularity of the vouchers and documents (which is not his job).
Gross inexcusable negligence and the defense of good faith:
Collectively:
As to Cesa, the City Treasurer, the SC first states that under the LGC the City
Treasurer is tasked with the following duties: SC: The Arias ruling squarely applies where the head of an office is made to answer
o Take custody of and exercise proper management of the funds of the LGU for his act on relying on the acts of his subordinate. Admittedly, the functions of the
concerned City Administrator do not relate to the functions of management and accounting of
o Take charge of the disbursement of all funds under his custody. funds or to internal audit. The concern of the City Administrator is the overall
When Cesa certified that the cash advances were lawful and incurred under his direct administration and management of the affairs of the LGU concerned. As such, the
supervision, he cannot escape the obligation to determine WON Badana complied SC cannot consider the deficiency in the particulars of the payment alone to charge
with PD 1445, even though the same would have been determined by the city Gaviola with knowledge of the scheme going on. He is not directly involved in the
accountant. Both PD 1445 and the LGC provide that the cash advance could only be management of local government funds. So his reliance that others did their job
granted if it is for an authorized purpose; that there is proper documentation on before signing isnt entirely misplaced.
where it is to be applied; and that no cash advance may be allowed unless the
previous cash advance has been settled and accounted for. BUT HE IS STILL LIABLE. When the vouchers have been presented to him, there were
Cesa also cannot rely on the defense that it was a long-standing practice that he no supporting documents that accompanied them. Yet, Gaviola signed the voucher
simply complied with. According to Bacasmas testimony, the Office of the Cash anyway. No evidence was ever presented that Gaviola requested for the supporting
Division under the Office of the City Treasurer simply required a written request for documents before he signed the voucher. It should be pointed out that only the
the release of the cash advance and nothing more. By signing the voucher and payrolls that are prepared are those for the first and second halves of the month. This
representing that he had direct supervision and knowledge of the transaction, Cesa means that there really wont be any supporting documents for those paid on a
had a vital role in the processing and the subsequent disbursement of funds. weekly basis, which Gaviola should have required before signing the voucher. This
The finding that he was only administratively held liable of simple neglect does not just shows a gross and inexcusable negligence on his part.
operate that he be criminally liable for gross negligence under Sec. 3(e) of RA 3019 as
administrative and criminal proceedings operate independently. There was conspiracy.
As to Jaca, the City Accountant, it was a red flag when she admitted that she signed The petitioners are all heads of their respective offices that perform interdependent
the vouchers in order to avoid delay in the disbursement of the salaries of functions in the processing of cash advances. The petitioners attitude of buck-passing in
government employees. She admitted that she did so even if she knew that Badanas the face of the irregularities in the voucher (and the absence of supporting documents),
previous cash advances had not yet been liquidated and did not even inform the COA as established by the prosecution, and their indifference to their individual and collective
that the accounting tools did not accurately monitor the cash advances. duties to ensure that laws and regulations are observed in the disbursement of the funds
of the local government of Cebu can only lead to a finding of conspiracy of silence and
The LGC imposes the following duties on the City Accountant: inaction.
o Accounting and internal audit of the LGU
o Install and maintain an internal audit system The separate acts or omissions of all the accused in the present case contributed in the
o Review supporting documents before preparation of vouchers to determine end result of defrauding the government. Without anyone of these acts or omissions, the
the completeness of the requirements end result would not have been achieved. Suffice it to say that since each of the accused
o Prepare statements of cash advances contributed to attain the end goal, it can be concluded that their acts, taken collectively,
o Prepare statements of journal vouchers and liquidation of the same satisfactorily prove the existence of conspiracy among them.
o Post individual disbursements to the ledger and index cards
DECISION.
As City Accountant, she should have also been aware that of the COA regulations which Petition denied.
require that no additional cash advance shall be allowed to any official or employee unless
the previous cash advance given him is first settled or a proper accounting thereof is
made. Avoiding delay is not an excuse if her duties require that the money is properly
accounted for. Since it was her job to conduct a pre-audit, what she should have done to
inform the Mayor of the attendant risks in the disbursement of funds or set up an internal
audit system.

As to Gaviola, the City Administrator, he relies on the ruling in Arias v. SB which


exonerated the accused based on the doctrine that All heads of offices have to rely
to a reasonable extent on their subordinates and on the good faith of those who
prepare bids, purchase supplies, or enter into negotiations.

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