NENITA L. LEANO, PETITIONER, VS. HON. EUFEMIO C. DOMINGO, CHAIRMAN, COMMISSION ON AUDIT, HON. BARTOLOME C. FERNANDEZ, JR., COMMISSIONER ON AUDIT, HON. ALFREDO P. CRUZ, COMMISSIO…

Leano versus Domingo

The Case

This is a petition for review on certiorari brought by Nenita Leano against the Chairman and Commissioners of the Commission on Audit. Leano asks the Supreme Court to annul the Commission's denial of her request for relief from accountability for 12,500 pesos of government funds lost in an alleged robbery of the cashier's office where she served as acting cashier. The case matters because it fixes the standard of negligence that governs every accountable public officer, and it tells us how far the courts will defer to the factual findings of the Commission on Audit.

Procedural History

After the loss was discovered, Leano filed with the Commission on Audit a request for relief from accountability for the 12,500 pesos. The Commission denied the request in an indorsement dated September 7, 1987, finding her negligent in handling her cash accountability. Leano moved for reconsideration, and the Commission denied that too in a letter-reply dated May 11, 1988. Leano then came to the Supreme Court by petition for review on certiorari, seeking annulment of both the denial and the denial of reconsideration. The Court gave due course to the petition and calendared it for deliberation.

Facts

By a special order dated December 23, 1983, Leano was designated Acting Cashier I of the Bureau of Quarantine effective January 1, 1984, for the duration of the absence of the regular cashier, who had been accused of malversation of public funds and was still at large. Leano assumed and performed the duties of the position.

Between 7:00 in the evening of December 17, 1984 and 8:45 in the morning of December 18, 1984, the cashier's office was allegedly robbed of 12,500 pesos, representing the year-end bonus of several employees who had not claimed it during office hours. The incident was reported to the Western Police District, and the ocular investigation found that the unknown suspects entered through the teller's window and opened the steel cabinet, possibly with the original key left inside a small wooden box near the cabinet, or with a false key, since no sign of force on the cabinet was traced. The cash was taken in the pay envelopes, leaving several envelopes with cash behind.

A cash count conducted by the resident auditor on December 18, 1984 found a shortage of 12,500 pesos in one account and an overage of 16,910 pesos in another. The auditor recommended that Leano be relieved from her duties as accountable officer due to negligence, that she use the safe instead of the steel cabinet, that a new safe combination be installed, and that erroneous subsidiary ledger entries be adjusted. Leano then requested relief from accountability, which the Commission denied on the ground that she was negligent: she failed to use the safe as recommended, left the key of the steel cabinet inside a small box near it, and allowed other persons access to the cash box with pay envelopes and to release the same.

Issues

• Whether or not the Commission on Audit acted with grave abuse of discretion in denying Leano's request for relief from accountability for the 12,500 pesos lost in the robbery.
• Whether or not Leano was negligent in the keeping of her cash accountability, so as to make her liable for the loss.

Applicable Provisions

Section 105, paragraph 2 of Presidential Decree Number 1445, the Government Auditing Code, provides:

Every person accountable for government funds shall be liable for all losses resulting from the unlawful or improper deposit, use or application thereof and for all loss attributable to negligence in keeping of the same.

This is the provision the Commission applied and the Court sustained: it makes the accountable officer liable for losses caused by negligence in keeping government funds.

Ruling

The Court held that the petition is devoid of merit and that the Commission did not act with grave abuse of discretion. On the question of negligence, the Court adopted the familiar test: did the defendant, in doing the alleged negligent act, use that reasonable care and caution which an ordinary prudent person would have used in the same situation? If not, there is negligence. The law, the Court said, adopts the standard supplied by the conduct of the discreet paterfamilias of the Roman Law, and negligence is measured not by the actor's personal judgment but by what would be reckless or blameworthy in a man of ordinary intelligence and prudence.

Applying that test, the Court found that Leano fell short of the demands of her position. Proper diligence would have compelled her to request an immediate change of the combination of the safe, yet the record showed no effort on her part to have it changed; she was content with the fact that the former cashier had also used the steel cabinet. The Court also found that the use of the steel cabinet was not a wise and prudent decision, since the cabinet, even when locked, could at times be pulled open, and the original key was left inside a small wooden box near it, making it highly possible that the cabinet was opened with its own key. Finally, the Court held that the factual findings of an administrative tribunal must be respected as long as they are supported by substantial evidence, even if not overwhelming or preponderant, and that the Commission's decision was amply supported by its internal records and findings and by the police report.

Doctrine

Every person accountable for government funds is liable for all loss attributable to negligence in keeping of the same, under Section 105, paragraph 2 of the Government Auditing Code. Negligence is the omission to do something which a reasonable man, guided by those considerations which ordinarily regulate the conduct of human affairs, would do, or the doing of something which a prudent and reasonable man would do; the standard is that of the discreet paterfamilias of the Roman Law, not the personal judgment of the actor. An accountable officer who fails to take the precautions that her position plainly demands, such as securing the combination of the safe or keeping the key of the depository beyond the reach of others, is negligent and cannot obtain relief from accountability. And the factual findings of an administrative tribunal, such as the Commission on Audit, must be respected as long as they are supported by substantial evidence, even if not overwhelming or preponderant.

Disposition

The petition was dismissed for lack of merit, and the denial by the Commission on Audit of Leano's request for relief from accountability was sustained.

Remember This

Memorize the rule: an accountable public officer is liable for loss attributable to negligence in keeping government funds, measured by the conduct of a prudent paterfamilias, not by her own judgment. Examiners use this case to test the negligence standard for accountable officers and the deference owed to the factual findings of the Commission on Audit when supported by substantial evidence.