REPORT ON THE FINANCIAL AUDIT CONDUCTED ON THE BOOKS OF ACCOUNTS OF OIC MELINDA DESEO, MTC, GENERAL TRIAS, CAVITE,

The Office of the Court Administrator examined the books of
account of the Municipal Trial Court, General Trias, Cavite with regard
to collections for the Fiduciary Fund for the period November 1997 to
February 4, 1999 and for the General and Judiciary Development Funds for
the period August 1998 to January 31, 1999. The financial audit was
ordered in response to the letter, dated February 4, 1999, of Judge
Lerio C. Castigador of that court, informing the Court that Court
Interpreter Melinda Deseo, who was formerly the Officer-in-Charge (OIC)
of said MTC, had used her cash collections to encash personal checks.

In her explanation, dated February 13, 1999, Court Interpreter
Deseo admitted the allegations. She admitted that she deposited in the
savings account of the MTC in lieu of her cash collections not only her
personal checks received from the Government Service Insurance System
for salary and salary loan but those of her friends and relatives as
well. She claimed that she did so in good faith and that she had seen
to it that the amounts she had taken from her collections were equal to
the amounts of the checks she deposited in the savings account of the
MTC. She explained said that she encashed the personal checks of her
friends and relatives out of “necessity” and also her personal checks to
defray the expenses of her sick mother, and otherwise avoid
unscrupulous money changers who cashed checks at huge discounts. She
admitted that she did the foregoing without the authority of judge
Castigador and expressed regrets for what she had done.

The Office of the Court Administrator found the following:

1. The Rural Bank of General Trias, Cavite is being utilized as
   depository bank instead of Land Bank of the Philippines or Provincial
   Treasurer’s Office/City Treasurer’s Office/Municipal Treasurer’s Office,
   the authorized depository agencies of the government.
2. The incumbent Officer-In-Charge, Ms. Corazon Perez, was directed
   to transfer the outstanding balance as of February 4, 1999 net of
   interest earned from Rural Bank of General Trias to the nearest Land
   Bank of the Philippines.
3. The interests earned from Fiduciary Fund are not remitted on a
   quarterly basis to the National Treasury under the General Fund as
   provided for in Circular No. 50-95.
4. There were encashments of personal checks from Fiduciary Fund collections.
5. The accountable officer was not complying with Circular No. 22-94
   which requires that all receipts must be issued in strict numerical
   sequence and all copies of cancelled receipts must be intact for COA
   inspection.
6. Entries in the Cashbook do not reconcile with the monthly reports
   submitted to the Accounting Division, Office of the Court Administrator.

In the course of our examination we noted that there was an overage
deposit of P1,500 deposits in the Rural Bank of General Trias which
according to Ms. Deseo pertains to the deposits made by Mr. Perfecto
Villanueva in Criminal Case No. 2476 under O.R. No. 6852716, dated
February 19, 1998. This was already refunded to Mr. Villanueva by
virtue of a Court Order dated February 23, 1998. According to Ms. Deseo
she personally refunded the amount upon presentation of the SC official
receipt from her collections and did not withdraw the said amount from
the bank. There is also unwithdrawn interest of P180.12 making a total
of P1,680.12 overage from bank balance as against cashbook and Statement
of Unwithdrawn Fiduciary Fund.

On the basis of the foregoing findings, the OCA recommended on
October 20, 1999 that (1) Melinda Deseo be given an admonition and
warned that repetition of what she had done or a similar offense would
be dealt with more severely; (2) the present OIC, Corazon Perez, be
advised to comply strictly with Circular No. 50-95 and other circulars
governing the collection of funds; and (3) Judge Lerio Castigador be
admonished to closely monitor the handling of the cash collections.

In view of the recommendation that Court Interpreter Melinda
Deseo be simply given an admonition with warning, the matter was
returned to the OCA for revision of its recommendations. However, in
its memorandum, dated February 9, 2000, the OCA reiterated its previous
recommendation.

Hence, the necessity to impose a penalty on Ms. Deseo, consistent with the OCA’s finding that she violated Circular No. 50-95.

The pertinent portions of this Circular are set forth below:

CIRCULAR NO. 50-95

TO: ALL JUDGES AND CLERKS OF COURT OF THE REGIONAL TRIAL
COURTS, SHARI’A DISTRICT COURTS, METROPOLITAN TRIAL COURTS, MUNICIPAL
TRIAL COURTS IN CITIES, MUNICIPAL TRIAL COURTS, MUNICIPAL CIRCUIT TRIAL
COURTS AND SHARI’A CIRCUIT COURTS.

SUBJECT: COURT FIDUCIARY FUNDS

The following guidelines and procedures for purposes of uniformity
in the manner of collections and deposits are hereby established:

A. Guidelines in Making Deposits:

(1) Deposits of fiduciary funds shall be made under a savings
account. A current account may also be maintained provided that a
savings account is also maintained with automatic fund transfer
arrangement.

(2) Deposits shall be made in the name of the Court, with its Clerk of Court and the Executive judge as authorized signatories.

(3) The Clerk of Court shall be the custodian of the Passbook to be
issued by the depository bank and shall report to the Executive Judge
for TC, SDC, MetroTC, MTCC, and the Presiding Judge for MTC, MCTC and
SCC, the bank’s name, branch and savings/current account number. Xerox
copy of the passbook shall be submitted to the Fiscal Audit Division.

B. Guidelines in Making Withdrawals

. . . .

(4) All collections from bailbonds, rental deposits, and other
fiduciary collections shall be deposited within twenty four (24) hours
by the Clerk of Court concerned, upon receipt thereof, with the Land
Bank of the Philippines.

(5) Interest earned on these deposits and any forfeited amounts
shall accrue to the general fund of the national government. Within two
(2) weeks after the end of each quarter, the Clerk of Court shall
withdraw such interest and forfeited amounts and shall remit the same to
the National Treasury under a separate remittance advice, duplicate
copy thereof to be furnished the Chief Accountant of the Supreme Court
for record and control purposes.

(6) Only one depository bank shall be maintained and the bank must
be formally informed by the Executive/Presiding judge as to who are the
authorized signatories to the withdrawal slips and that every withdrawal
slip must be accompanied by a court order authorizing the withdrawal of
the amount indicated thereat.

(7) Except in instances specifically mentioned in the immediately
succeeding paragraph, all fiduciary collections currently deposited with
the local treasurers/ and other depositories shall be withdrawn
therefrom and deposited with the savings/current accounts maintained by
the court for these collections.

(8) In localities where there are no branches of the Land Bank of
the Philippines, fiduciary collections shall be deposited by the Clerk
of Court with the Provincial, City, or Municipal Treasurer.

(9) Within two (2) weeks after the end of each quarter, all Clerks
of Court are hereby required to submit to the Chief Accountant of the
Supreme Court, copy furnished the Office of the Court Administrator, a
quarterly report indicating the outstanding balance maintained with the
depository bank or local treasurer, and the date, nature, and amount of
all deposits and withdrawals made within such period.

Circulars that are inconsistent herewith are considered revoked.

This Circular shall take effect on November 1, 1995.

October 11, 1995.

(Sgd.) ERNANI CRUZ PAÑO

Court Administrator

Considering her admissions and the findings of the OCA, there is no
doubt that Court Interpreter Melinda Deseo violated Circular No. 50-95
by using her cash collections, which she should have deposited in the
bank for the account of the MTC, in order to encash not only her
personal checks but also those of her friends and relatives. As we have
previously stated, the Fiduciary Fund is in the nature of a trust fund
which should not be withdrawn without authority of the court.^[1] Its use for other purposes constitutes a misappropriation of public funds placed in the care of the public officer concerned.

Ms. Deseo’s claim that she encashed the checks of friends and
relatives because they badly needed cash and her checks to defray the
expenses of her sick mother cannot be justified. The same excuse has
been rejected by this Court as the activity is no different from the
activities of money changers victimizing lowly employees in need of
cash. Indeed, the activity found was actually a lending operation with
the use of public funds.^[2]

In recommending that Ms. Deseo be merely admonished, the OCA stated:

Ms. Deseo was designated as Officer-in-Charge of this court on
September 25, 1995. She occupies the position of Interpreter, thus she
is unfamiliar with the guidelines in handling court funds. When she was
designated in an acting capacity, she had no thorough knowledge nor had
an orientation/seminar in administering Fiduciary Fund collections.
When she encashed personal checks against court funds she violated
Circular No. 50-95 which she readily admitted per explanation dated
February 13, 1999. These factors were considered as mitigating in
evaluating the liability of Ms. Deseo. Besides, this office found that
the collections and deposits on other funds (JDF and General Fund) are
in order and withdrawals of Fiduciary Funds are upon court order.

The Court disagrees. Ms. Deseo’s alleged lack of prior training and
orientation in administering Fiduciary Fund collections cannot relieve
her of administrative liability. Her collections and deposits of other
funds (Judiciary Development Fund and General Fund) are in order. Her
responsibilities for these funds are substantially the same as her
responsibility for the Fiduciary Fund. It is difficult to believe that
she was ignorant of the provisions of Circular No. 50-95. She might, in
the beginning, have been unaware of the circular, but surely she could
not have remained so for the three years that she was the OIC.
Admonition, as recommended by the OCA, is not a penalty. Her offense
deserves more than a “gentle or friendly reproof, a mild rebuke, warning
or reminder, counseling on a fault, error or oversight, an expression
of authoritative advice or warning”^[3] which is all that admonition amounts to.

Indeed, Ms. Deseo is guilty of misconduct for which suspension
for six (6) months and one (1) day without pay is the appropriate
penalty. It is no excuse that the funds of the court were all accounted
for.^[4]

This is where the responsibility of Judge Lerio Castigador comes
in. As Ms. Deseo’s superior, Judge Castigador should have exercised
direct and immediate supervision over her to ensure that she observed
the provisions of Circular No. 50-95. As the Court held:

Indeed, clerks of court are the chief administrative officers of
their respective courts; with regard to the collection of legal fees,
they perform a delicate function as judicial officers entrusted with the
correct and effective implementation of regulations thereon. Even the
undue delay, in the remittances of amounts collected by them at the very
least constitutes misfeasance. On the other hand, a vital
administrative function of a judge is the effective management of his
court, and this includes control of the conduct of the court’s
ministerial officers. It should be brought home to both that the
safekeeping of funds and collections is essential to the goal of an
orderly administration of justice and no protestation of good faith can
override the mandatory nature of the Circulars designed to promote full
accountability for government funds.^[5]

Judge Castigador cannot entirely wash his hands of responsibility by
disclaiming knowledge of Ms. Deseo’s activities. He must, however, be
given credit for getting wind of Ms. Deseo’s activities and bringing
them to the attention of the Court.

WHEREFORE, the Court RESOLVED as follows:

(1) To find Melinda Deseo, former Officer-in-Charge, Municipal
Trial Court, General Trias, Cavite, guilty of MISCONDUCT and order her
SUSPENSION for six (6) months and one (1) day without pay with WARNING
that a repetition of this or a similar offense will be dealt with more
severely;

(2) to ADMONISH Judge Lerio C. Castigador to exercise effective
supervision over the personnel of his court, especially those charged
with collection of the Fiduciary Fund and other trust funds (Judiciary
Development Fund and Trust Fund); and

(3) to ADVISE Ms. Corazon Perez, Officer-in-Charge, to observe strictly Circular No. 50-95 and pertinent circulars of the Court.

SO ORDERED.

Davide, Jr., C.J., Melo, Puno, Vitug, Kapunan, Panganiban, Quisumbing, Purisima, Pardo, Buena, Gonzaga-Reyes, Ynares-Santiago, and De Leon, Jr., JJ., concur.

Bellosillo, J., on leave.

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^[1] Re: Report of the Judicial and Financial Audit of RTC-Br. 4, Panabo, Davao del Norte, 287 SCRA 510 (1998).

^[2] Menesses v. Sandiganbayan, 232 SCRA 441 (1994); Re: Financial Audit in RTC, General Santos City, 271 SCRA 302 (1997).

^[3] Tobias v. Veloso, 100 SCRA 177, 184 (1981).

^[4] Re: Financial Audit in RTC, General Santos City, supra.

^[5] A.M. No.
96-1-25-RTC, Report on the Financial audit in the RTC, General Santos
City and the RTC and MTC of Polomolok, South Cotabato, March 8, 2000.