INITIAL REPORT ON THE FINANCIAL AUDIT CONDUCTED AT THE OFFICE OF THE CLERK OF COURT (OCC), MUNICIPAL TRIAL COURT IN CITIES (MTCC), LUCENA CITY.

Reynoso versus the Office of the Court Administrator

The Case

This is an administrative matter that began not as a complaint filed by any private party, but as a financial audit. The Financial Audit Team of the Office of the Court Administrator examined the books of the Office of the Clerk of Court of the Municipal Trial Court in Cities of Lucena City, and the audit became a regular administrative complaint against the Clerk of Court, Gil B. Reynoso. The case matters because it fixes the standard of accountability of a Clerk of Court as an accountable officer over judicial funds, and it shows how the Supreme Court treats the loss of official receipts, unremitted collections, and unvalidated deposits. It is a case about fiduciary duty in the first person, and about what happens when the person holding the trust can no longer produce the paper that proves the trust was kept.

Procedural History

The matter originated in the Supreme Court itself. The audit team of the Office of the Court Administrator conducted the examination and reported its findings, and the Court, by a Resolution in January 2006, adopted the recommendations of the Office of the Court Administrator, including the issuance of a Hold Departure Order against the respondent. The respondent filed an Answer, which he had prepared and signed in California, and the Court required him anew to submit the missing documents enumerated in that Resolution, except those official receipts already submitted to the Commission on Audit. He then filed a Manifestation and Compliance explaining why he could not produce them. The Court Management Office presented his Summary of Accountabilities, and the Office of the Court Administrator submitted its evaluation by Memorandum in September 2007. The case was thus decided by the Supreme Court as an original administrative proceeding, without passing through a trial court or the Court of Appeals.

Facts

The audit covered the accountability period from 1985 up to the end of February 2005. The audit team found missing official receipts across the Fiduciary Fund, the General Fund, and the Judiciary Development Fund; unaccounted official receipts; original copies of cancelled official receipts that could not be produced; a missing Land Bank passbook for a savings account covering a period in 1996; and supporting documents for fiduciary fund withdrawals that were lacking. It also found unreported and erroneously reported collections in the monthly reports, and official receipts reported as cancelled in the monthly reports although the originals were not marked cancelled. The team recommended that the respondent be directed to submit the missing documents, to secure confirmation from the Land Bank of the Philippines as to the validity of unvalidated deposits, and to explain the discrepancies in writing.

In his Answer and in his Manifestation and Compliance, the respondent did not deny the shortages of paper. He explained that when he took over as officer in charge after the former Clerk of Court, Ricardo Querubin, went on leave for health reasons, there was no formal turnover of the office or of the used and unused receipts. He described an office space of about one and a half meters by three and a half meters, shared by seven employees, with steel cabinets filled to the brim, so that records had to be left in the open. He said that records were lost or misplaced when the court was renovated in 1990 and when the office transferred in 1995, and that he had lost track of the receipt booklets because past audits never required him to account for them. He insisted, however, that he never touched or misappropriated any money, though he admitted that he might have misposted or misdivided funds among the various accounts.

The Court Management Office then presented his Summary of Accountabilities as of the end of February 2005, with the caveat that the computed liabilities might change upon submission and examination of the missing documents. The figures showed a balance of accountability in the Fiduciary Fund, the General Fund, the Special Allowance for the Judiciary Fund, and the Judiciary Development Fund, exclusive of withdrawals lacking supporting documents. The Office of the Court Administrator evaluated the case and concluded that the respondent, as an accountable officer, had failed to live up to his duty.

Issues

• Whether or not a Clerk of Court may be held administratively liable for missing, unaccounted, and uncancelled official receipts and for the loss of a bank passbook and supporting documents of fund withdrawals.
• Whether or not the explanations of lack of formal turnover, inadequate office space, repeated transfers of office, and absence of prior audit objections exonerate the respondent from liability.
• Whether or not the respondent is liable for the shortages and balances of accountability in the Fiduciary Fund, the General Fund, the Special Allowance for the Judiciary Fund, and the Judiciary Development Fund.

Applicable Provisions

The 2002 Revised Manual for Clerks of Court, citing Circular Number 22-94 dated April 8, 1994, provides on the cancellation of official receipts:

In cases wherein cancellation of official receipts becomes inevitable, the Clerk of Court or duly authorized representative, must present to the Provincial/City/Municipal Auditor the spoiled and cancelled receipt/s for inspection. Under no circumstances shall destruction of accountable forms be allowed.

This bears on the case because the respondent failed to present the original copies of cancelled official receipts for inspection.

The same Manual provides on the custody of cancelled receipts:

Original copies of cancelled official receipts are to be attached to their duplicate and triplicate copies in the booklet for audit of COA and the Fiscal Monitoring Division.

This bears on the case because the originals of the cancelled receipts were not attached and could not be produced.

The same Manual provides on the loss of official receipts:

In cases of loss of official receipts, the Clerk of Court or the duly authorized representative must immediately report to the Provincial/City/Municipal Auditor and then file an application for relief if the circumstances warrant.

This bears on the case because no such report or application for relief was shown.

The same Manual provides on the accountability for official receipts:

Official receipts are accountable forms and an accounting of their use is required at the end of the term of the Clerk of the Clerk of Court/Accountable Officer.

This bears on the case because the respondent could not render that accounting.

The same Manual provides on the recording and custody of official receipts:

Official receipts issued must be properly recorded in their respective books of accounts for accounting and control purposes. Official receipts must be kept in safe custody. The Clerk of Court as the person directly responsible for all court collections must take all reasonable steps to minimize the risk of losses, defalcations and other types of irregularities.

This bears on the case because it states the exact duty the respondent was found to have breached.

Ruling

On the first issue, the Court held that the respondent, as Clerk of Court, has control and supervision over the personnel, properties, and supplies of his office, and must be held accountable for the missing official receipts, the unaccounted official receipts, the original copies of cancelled official receipts, the passbook of the Land Bank savings account, and the supporting documents of fiduciary fund withdrawals. The Manual treats official receipts as accountable forms, and the respondent could not account for them.

On the second issue, the Court held that his lengthy explanations do not exonerate him. The loss of documents during the numerous transfers of office, the lack of a secured storage area, the commingling of files, and the fact that auditors from the Commission on Audit never called his attention to any irregularity, all taken together, only bring to the fore that as Clerk of Court and accountable officer he miserably failed to live up to his bounden duty. His own admissions that he misposted or misdivided funds, that the cancelled receipts were not reported in his monthly reports, and that he could not say where they were, confirmed the breach.

On the third issue, the Court held him liable for the balances of accountability shown in the Summary of Accountabilities, subject to the caveat that the computed liabilities may change upon submission and examination of the missing documents.

Doctrine

A Clerk of Court is an accountable officer. Official receipts are accountable forms, and the Clerk of Court must keep them in safe custody, record them in the proper books, present cancelled originals to the auditor, and report any loss immediately and apply for relief. The duty is personal and cannot be delegated to circumstance. Lack of a formal turnover from a predecessor, cramped office space, repeated transfers of office, and the silence of past auditors are not defenses; they are, in the Court's words, precisely the evidence that the accountable officer failed his bounden duty. The standard is strict because the funds involved are fiduciary in character, held for litigants and for the judiciary, and the Court will not allow their loss to go unaccounted.

Disposition

The Court held the respondent Clerk of Court administratively liable for the missing documents and the balances of accountability, and directed him to comply with the directives of the audit, including the submission of the missing documents and the explanation of the discrepancies, with the computed liabilities subject to adjustment upon examination of the documents.

Remember This

Memorize the line that official receipts are accountable forms and that the Clerk of Court must keep them in safe custody, for that single sentence carries the whole duty. Examiners use this case to test the strict accountability of Clerks of Court over judiciary funds, and to see whether a candidate will accept excuses of no turnover, small office, and past silence as defenses, when the Court treats them instead as proof of the breach.