REPORT ON THE FINANCIAL AUDIT CONDUCTED IN THE MCTC-MADDELA, QUIRINO

Report on the Financial Audit Conducted in the MCTC-Maddela, Quirino

The Case

This is an administrative matter brought by the Supreme Court itself, through the Office of the Court Administrator, against Mrs. Francisca B. Dueñas, Clerk of Court II of the Municipal Circuit Trial Court of Maddela-Nagtipunan, Quirino. It began not as a complaint by a litigant but as a letter from the acting presiding judge reporting that Mrs. Dueñas had been absent without leave since April 2006 and had submitted no financial reports since 2005. The Court ordered a financial audit of all the court's funds, and the audit revealed shortages, unremitted and delayed collections, missing official receipts, and undeposited cash bonds. The case matters because it is the Court's own statement of the fiscal duties of a Clerk of Court and of the consequences of betraying that trust.

Procedural History

The matter began with a letter dated 19 May 2006 from the acting presiding judge, Judge Josephine B. Gayagay, to the Court Administrator, reporting the continuous absence without leave of Mrs. Dueñas and requesting an immediate audit of her accountabilities. On 14 March 2007, the First Division of the Supreme Court issued a Resolution dropping Mrs. Dueñas from the rolls effective 19 April 2006 and declaring her position vacant. A financial audit team was then formed to examine all the records and documents for all funds of the court for the period 1 January 1997 up to 31 January 2007. The team submitted its report, and on 20 February 2008 the Office of the Court Administrator adopted and endorsed the team's recommendation for the approval of the Supreme Court. The case was thus an original administrative proceeding before the Supreme Court, decided in February 2009.

Facts

Mrs. Dueñas served as Clerk of Court II of the Municipal Circuit Trial Court of Maddela-Nagtipunan, Quirino. She stopped reporting for work on 19 April 2006 without filing any application for leave, and no report of her financial transactions had been submitted since 2005. Mrs. Evelyn P. Cadavis, Court Interpreter I, was designated Officer-in-Charge effective 19 April 2006. A checklist of requirements was sent to Mrs. Dueñas, and a financial audit team examined the books for the period from 1 January 1997 to 31 January 2007, covering the accountability of Mrs. Dueñas up to 18 April 2006 and of Mrs. Cadavis thereafter.

The audit found that Mrs. Dueñas had shortages in three funds: 4,208.50 pesos in the Judiciary Development Fund, 14,202.80 pesos in the Special Allowance for the Judiciary Fund, and 414,164.82 pesos in the Fiduciary Fund. Collections were remitted months after collection and often not in full. Two booklets of official receipts were unaccounted for, including the triplicate copies for the Fiduciary Fund covering five years. Some withdrawals of cash bonds were not supported by court orders or acknowledgment receipts, and several cash bonds were never deposited at all. The current passbook remained in her possession, and bank records showed she made numerous withdrawals from October 2005 to March 2006 amounting to 252,500 pesos, depleting the account. By contrast, the audit of Mrs. Cadavis showed only over-remittances, which accrue to the National Government.

The money value of the earned leave credits of Mrs. Dueñas was certified at 228,778.95 pesos. The audit team recommended her dismissal for gross dishonesty, grave misconduct, and continuous absence without leave, with forfeiture of all benefits including accrued leave credits, disqualification from reemployment in any government agency, application of her leave credits to the shortages, and restitution of the balance of 203,797.17 pesos.

Issues

• Whether or not Mrs. Dueñas is administratively liable for gross dishonesty, grave misconduct, and continuous absence without leave as Clerk of Court.
• Whether or not the shortages in the Judiciary Development Fund, the Special Allowance for the Judiciary Fund, and the Fiduciary Fund may be charged against her, with her leave credits applied to partial restitution.
• Whether or not the penalties of dismissal, forfeiture of benefits, disqualification from reemployment, and restitution should be imposed.

Applicable Provisions

Supreme Court Circular Number 13-92 provides:

All fiduciary collections shall be deposited immediately by the Clerk of Court concerned, upon receipt thereof, with an authorized depository bank.

This fixes the standard of prompt deposit that Mrs. Dueñas violated through delayed and partial remittances.

Supreme Court Circular Number 5-93 designated the Land Bank as the authorized government depository, and the Court notes that the same funds should be deposited immediately upon receipt with the city, municipal, or provincial treasurer where the court is located. This identifies the lawful destination of court funds and the impropriety of keeping them in the clerk's custody.

Ruling

The Court agreed with the recommendation of the financial audit team as adopted by the Office of the Court Administrator. On the first issue, it held that the Clerk of Court performs a very delicate function as custodian of the court's funds, revenues, records, property, and premises, and is liable for any loss, shortage, destruction, or impairment of said funds and property. Clerks of Court are not supposed to keep funds in their custody; they must deposit them immediately upon receipt. The Court declared that delayed remittance of cash collections by Clerks of Court constitutes gross neglect of duty, and that the failure of a public officer to remit funds upon demand by an authorized officer is a ground for liability. The audit findings of shortages, undeposited collections, missing receipts, and unauthorized withdrawals established her accountability.

On the second issue, the Court approved the application of the money value of her leave credits, amounting to 228,778.95 pesos, as partial restitution of the computed shortages, dispensing with the usual documentary requirements, and directed her to restitute the balance of 203,797.17 pesos within thirty days from notice.

On the third issue, the Court imposed the recommended penalties, consistent with its treatment of the Clerk of Court as the nucleus of all court activities, adjudicative and administrative, whose administrative functions are as vital to the prompt and proper administration of justice as judicial duties.

Doctrine

A Clerk of Court is the custodian of the court's funds and is liable for any loss, shortage, destruction, or impairment thereof. Fiduciary collections must be deposited immediately upon receipt with the authorized depository, and clerks are not supposed to keep funds in their custody. Delayed remittance of cash collections constitutes gross neglect of duty, and failure to remit funds upon demand by an authorized officer is a ground for administrative liability. These rules flow directly from the circulars quoted above, which command immediate deposit of fiduciary collections and designate the authorized government depository.

Disposition

The Court dismissed Mrs. Dueñas from the service for gross dishonesty, grave misconduct, and continuous absence without leave, with forfeiture of all benefits including accrued leave credits, disqualified her from reemployment in any government agency, applied her leave credits to the shortages, and ordered her to restitute the balance of 203,797.17 pesos.

Remember This

Memorize this line: the Clerk of Court is the custodian of the court's funds and is liable for any loss, shortage, destruction, or impairment of said funds and property. Examiners use this case to test the fiscal duties of clerks of court, the rule of immediate deposit under the circulars, and the doctrine that delayed remittance is gross neglect of duty.