TERESITA RETAZO COMPLAINANT, LORNA A. VERDON, CLERK OF COURT, MCTC, DON CARLOS, BUKIDNON, RESPONDENT.

Retazo versus Verdon

The Case

This is an administrative case in which Teresita Retazo, a private complainant, charges Lorna A. Verdon, the Clerk of Court of the Municipal Circuit Trial Court of Don Carlos, Kitaotao, and Dangcagan in Bukidnon, with malversation of public funds. The complaint was consolidated with an earlier financial audit matter concerning shortages in the court's fiduciary account. The case matters because it fixes the standard of accountability for the clerk of court as custodian of court funds, and it shows how a shortage in an accountable officer's accounts, left unexplained, is treated as misappropriation warranting the gravest administrative penalty.

Procedural History

The matter began as an administrative report of a Deputy Court Administrator on the financial accountabilities of the respondent, following an audit by the Commission on Audit that uncovered a missing cashbook and passbook for the Fiduciary Fund. The Office of the Court Administrator directed the respondent to submit her records, and when she failed to comply, her salaries were withheld. The Supreme Court then directed her to explain and suspended her from office pending resolution. Meanwhile, the complainant filed a separate affidavit-complaint for malversation. When the respondent failed to comment, she was deemed to have waived her defense, and the complaint was re-docketed as a regular administrative matter. The two matters were later consolidated. After further non-compliance, the Court imposed a fine on her. The cases reached the Supreme Court as an original administrative matter, and the Court resolved them on the pleadings already filed.

Facts

On the eighth of September 1998, the acting presiding judge requested an investigation after Commission on Audit representatives, conducting an audit, found the cashbook and passbook for the Fiduciary Fund missing, along with receipts and other anomalies. The Fiscal Monitoring Division of the Office of the Court Administrator repeatedly directed the respondent to submit her official cashbooks, validated duplicate deposit slips, and passbooks. She submitted only photocopies, and never completed the originals. Her salaries and allowances were withheld beginning in April 2001.

On the nineteenth of July 2001, the Commission on Audit informed the respondent that examination of her cash accounts showed a shortage of 238,220 pesos, with official receipts still missing and unaccounted for. Her cashbook showed a fiduciary fund balance of 325,604.74 pesos, but only 87,384.74 pesos stood as cash in bank, and no cash or valid cash items were produced. In her reply the next day, she promised to replenish the amount as soon as possible and asked for time to produce it.

Separately, the complainant had deposited 30,000 pesos with the respondent to secure the provisional liberty of an accused, Juanito Retazo. The accused was acquitted and the bail was ordered returned, but the complainant could not collect because the respondent was under suspension and the funds in her custody stood at only 2,052.16 pesos. The complainant then filed her affidavit-complaint for malversation. The respondent never commented, never submitted the required documents, and never answered the Court's directives.

Issues

• Whether or not the respondent is guilty of dishonesty and grave misconduct for the shortage in the fiduciary fund and her failure to account for it.
• Whether or not the respondent's promise to replenish the shortage amounts to an admission that she misappropriated the funds.
• Whether or not the amounts of 238,220 pesos and 30,000 pesos may be deducted from the respondent's withheld salaries and allowances.

Applicable Provisions

Section 7 of Rule 136 of the Rules of Court provides:

The clerk shall safely keep all records, papers, files, exhibits and public property committed to his charge, including the library of the court, and the seals and furniture belonging to his office.

This fixes the respondent's duty as custodian, and her failure to account for the funds committed to her charge is a breach of that duty.

Section 23 of Rule XIV of the Omnibus Rules Implementing Book V of Executive Order Number 292 provides:

The following are considered grave offenses: x x x 4. Dishonesty; x x x 8. Grave misconduct.

This classifies dishonesty and grave misconduct as grave offenses, for which the penalty of dismissal is prescribed even at the first instance.

Section 9 of the same Rule provides:

The penalty of dismissal shall carry with it cancellation of eligibility, forfeiture of leave credits and retirement benefits, and the disqualification for re-employment in the government service.

This defines the accessory consequences that attach to the penalty of dismissal.

Article XI, Section 1 of the 1987 Constitution provides:

Public office is a public trust. Public officers and employees must at all times be accountable to the people, serve them with utmost responsibility, integrity, loyalty, and efficiency, act with patriotism and justice, and lead modest lives.

This is the constitutional norm of public accountability that the respondent violated.

Ruling

On the first issue, the Court found the respondent guilty of dishonesty and grave misconduct. The findings and recommendations of the Office of the Court Administrator were well taken. The Court held that an accountable officer may be convicted of malversation even in the absence of direct proof of misappropriation, so long as there is evidence of a shortage in his accounts which he is unable to explain. The respondent failed to live up to the high ethical standards imposed on court employees, and her actions placed her honesty and integrity in serious doubt.

On the second issue, the Court treated the respondent's promise to replenish the shortage as an admission. The Office of the Court Administrator reasoned that she would not have promised to replenish the amount if she had not spent the fiduciary account for herself.

On the third issue, the Court directed the Financial Management Office to deduct 268,220 pesos from her withheld salaries and allowances, to be deposited to the fiduciary account. From that amount, 238,220 pesos was allocated to the money misappropriated, and 30,000 pesos was to be returned to the complainant as the cancelled bail bond, upon proper documentation. The 1,000 peso fine was also to be paid, and the remainder returned to the respondent.

Doctrine

An accountable officer may be held liable for malversation even without direct proof of misappropriation, provided there is evidence of a shortage in his accounts which he cannot explain. The clerk of court is the custodian of the court's funds, records, and properties, and is liable for any loss, shortage, destruction, or impairment of those funds and properties. Dishonesty and grave misconduct are grave offenses punishable by dismissal even at the first instance, and dismissal carries cancellation of eligibility, forfeiture of retirement benefits except accrued leave credits, and disqualification from re-employment in government. Public office is a public trust, and those involved in the administration of justice must live up to the strictest standard of honesty and integrity.

Disposition

The Court found the respondent guilty of dishonesty and grave misconduct, dismissed her from the service with forfeiture of retirement benefits except accrued leave credits and with prejudice to re-employment in government, and ordered the deductions from her withheld salaries as described, without prejudice to any criminal complaint against her.

Remember This

Memorize this line: an accountable officer may be held liable for malversation even without direct proof of misappropriation, so long as there is an unexplained shortage in his accounts. Examiners use this case to test the liability of the clerk of court as custodian of court funds, and the rule that dishonesty and grave misconduct carry dismissal even at the first instance.