JAIME PONCE DE LEON, MERIAM DELOSTRICO, ORLANDO RAMIREZ, REGALADO RENACIA, REYNALDO BABAO, MARY LOU MANANQUIL, SESIPATRO MIER, MONINA POSA­DAS, LILIA RACHO, LEONARDO SALVA, AND …

These 14 cases involve irregular and fraudulent transactions in
the Bais City Highway Engineering District (BCHED),
one of the fifteen (15) engineering districts in Central Visayas, or Region VII.  Similar cases from the same Region already
decided by the Sandiganbayan, are:  (1) the Danao City
1978 cases; (2) Tagbilaran
City 1978 cases; (3) Lapu-Lapu City
1978 cases; and (4) the Siguijor 1977 cases.

The petitioners are eleven (11) of twenty-eight (28) persons
charged before the Sandiganbayan with fourteen (14)
counts of violations of Section 3(e) of the Anti-Graft and Corrupt Practices
Act (R.A. No. 3019)* committed in connection with
some “ghost projects” in the Bais City Highway
Engineering District (BCHED) in 1978.

The petitioners, except Jaime Ponce De Leon who is a private
contractor, were government employees at the time of the commission of the
crime holding positions in the BCHED as follows:

1. Meriam Delostrico – Accountant I;

2. Orlando
Ramirez – Senior Civil Engineer;

3. Regalado Renacia – District Engineer;

4. Reynaldo Babao
– Maintenance Man;

5. Mary Lou Mananquil
-Civil Engineer;

6. Sesipatro Mier – Administrative Officer;

7. Monina Posadas – Senior Civil Engineer;

8. Lilia Racho –
Property Custodian;

9. Leonardo Salva
– Asst. Highway Engineer;

10. Danilo Altura – Ground Man Gardener.

(pp. 24-25, Rollo.)

The information against them alleged that they conspired and
connived with their co-defendants to defraud the Government in amounts totalling P627,239.88, through the falsification of
fourteen (14) general vouchers, checks, and other documents –

“x x
x making it appear that Regional Office No.
VII of the Ministry of Public Highways regularly issued an advice of cash
disbursement ceiling (ACDC) and the corresponding letters of Advice of
Allotment to cover the purchase of construction materials for use in the
improvement and/or repair of roads within the District when in truth and in fact,
as all the accused well knew, the same were not true, and correct; by making it
appear in the voucher that funds were available and that there were appropriate
request[s] for allotments to pay the aforesaid purchase; that a requisition for
the said item was made and approved; that a regular bidding was held; that a
corresponding purchase order was issued in favor of the winning bidder; that
the roads construction materials were delivered, inspected and used in the
supposed project and that the alleged supplier was entitled to payment when in
truth and in fact, as all the accused know, all the foregoing were false and
incorrect and because of the foregoing falsifications, the above-named accused
were able to collect from the Bais City Highways
Engineering District the total amount of x x x Philippine Currency, in payment of the
non-existing deliveries: 
that the aforesaid amount was not reflected in the monthly trial balance
submitted to the Central Office showing its financial condition as the same was
negated thru the journal vouchers as a designed means to cover-up the
fraud:  and then the accused, once
in possession of the said amount, [did]
misappropriate, convert, and misapply the same
to their personal needs, causing injury,
damage and prejudice to the Philippine
Government in the total amount of x x x Philippine Currency.” (Underscoring
supplied; pp. 27-28, Rollo.)

Together with Rolando Mangubat and
Benjamin Camarra,* the
Regional Accountant and Supervising Civil Engineer, respectively, of the BCHED,
the petitioners were convicted of the charges against them and were uniformly
sentenced by the Sandiganbayan to suffer in each of
the 14 cases an indeterminate penalty of imprisonment ranging from FOUR (4)
YEARS and ONE (1) DAY as minimum, to EIGHT (8) YEARS and ONE (1) DAY as
maximum; each to suffer perpetual disqualification from public office, to
indemnify, jointly and severally, the Government of the Republic of the
Philippines in the amount stated in each of the fourteen (14) informations (pp. 88-94, Rollo);
and to pay their proportionate share of the costs of the actions.

Of the twenty-eight (28) accused in the 14 cases, 12 were
convicted and ten (10) were acquitted*,
namely:  (1) Manuel de Veyra, Regional Director; (2) Angelina Escano,
Finance Officer; (3) Basilisa Galvan, Budget Officer;
(4) Matilde Jabalde,
Supervising Accounting Clerk; (5) Josefina Luna, Accountant II; (6) Jose Sayson, Budget Examiner, all of the Cebu
City Regional Office; (7) Leonila Del Rosario, Chief
of Finance and Management Service; (8) Engracia
Escobar, Chief Accountant; (9) Abelardo Cardona,
Assistant Chief Accountant; and (10) Leonardo Tordecilla,
Supervising Accountant.

However, the Sandiganbayan’s 75-page
decision dated July 5, 1989 is silent on the guilt or innocence of five (5)
defendants, namely:  (1) Assistant
Regional Director Jose Bagasao; (2) Accountant Edgardo Cruz; (3) Budget Officer II Agripino
Pagdanganan; (4) COA Auditor Cesar Pasculado; and (5) Auditing Examiner Tranquilino
Sevilla.

The standard procedure for undertaking new highways projects or
maintaining and repairing existing ones, was described by Supervising Civil
Engineer Benjamin Camarra and District Engineer Regalado Renacia, whose
testimonies are summarized in the appealed decision as follows:

“Among the fifteen (15) highway engineering districts which
comprised Region VII of the MPH [Ministry of Public Highways (now Department of
Public Works and Highways)], is the Bais City Highway
Engineering District (BCHED).  It is
headed by the City Engineer of Bais City with its own
auditing staff headed by the City Auditor. 
Its jurisdiction encompasses the territorial limits of Bais City,
including the Bais-Kabangkalan
Road and the Dumaguete North Road, for
which annual maintenance allotments are issued to it and other districts by the
MPH through the Regional Office in the form of Letters of Advice of Allotment (LAAs) which serve as authority for the district office to
incur obligations.  These LAAs are derived from Sub-Advice of Allotments (SAAs) which are issued to all regional offices by the MPH
based on Advices of Allotment (AAs) issued by it by
the Ministry of the Budget after the annual government appropriations act or
budget has been approved.

“While AAs, SAAs
and LAAs serve as authority to incur obligations by
the MPH, its regional offices and the latter’s district offices, the authority
to make payments for said obligations incurred is derived from Cash
Disbursement Ceilings (CDCs), which are issued by the
Ministry of Budget to the MPH together with the AAs.  The MPH, in turn, issue Advices of Cash
Disbursement Ceilings (ACDC) to its regional office, and the latter then issues
the corresponding Sub-Advice of Cash Disbursement Ceilings (SACDCs)
to the different engineering districts under it.  All releases of funds by the MPH to its
regional offices are made at the outset of every quarter, based on the
programmed needs of the region’s district offices, and said releases made
through LAAs and CDCs to
each district are entered in the appropriate logbooks or ledgers of the
Regional Office, principally in the Budget and Finance Division thereof.

“In the case of the Bais CHED,
disbursement of the quarterly allotments for maintenance or other needs of the
districts is effected through the proper written request by the District
Engineer for the release of such funds, accompanied by the supporting programs
of work, directed to the Regional Director. 
Upon approval of said request by the latter, an LAA is issued to the
District Engineer by the Regional Finance Officer, certified as to the
availability of funds by the Regional Accountant, and countersigned by the
Regional Director.  Correspondingly, the
requisite SACDC is prepared by the Regional Finance Officer to be signed by him
and the Regional Director, after which they are duly recorded in a
logbook.  Both the LAA and SACDC are then
sent to the district office and are carried and received by duly-authorized
representatives.

“Implementation of the district’s programs of work now go into the
requisition stage, wherein the proper Requisition for Supplies and Equipment
(RSE), needed for the prosecution of its projects and embodied in the approved
program of work, is prepared by the requisitioning officer, certified as to the
availability of funds by the District Accountant and approved by the District
Engineer.  The Project Engineer also
prepares a Request for Obligation of Allotment (ROA) which the Accountant
certifies as to availability of funds. 
The RSE, together with a copy of the program of work, is then
transmitted to the Regional Office for the approval of the Regional Director
and thereafter returned to the district concerned for prosecution of the
project after compliance with bidding and award procedures.

“Based on the approved RSE, the district’s Property Custodian or
Purchasing/Supply Officer, with the approval of the District Engineer, sends
out Request for Sealed Quotations to various contractors or suppliers
requesting them to submit, on or before a date fixed therein, their quotations
for the materials or supplies.  Notices
thereof are likewise publicized through either newspaper publications or
postings in public places.  Within the reglementary period, the sealed bid forms are opened by the
Committee on Bidding and Award in the presence of representatives of the
District Engineer and the District/City Auditor.  The lowest price quotation or bid is
determined and the corresponding Abstract of Bids is prepared and signed by the
members of the committee, as well as the auditor’s and district engineer’s
representatives, after which the corresponding award is made to the said lowest
bidder, duly approved by the District Engineer. 
A Purchase Order (PO) is thereafter prepared by the Property Custodian,
addressed to the winning bidder, certified as to availability of funds by the
Accountant and approved by the District Engineer.

“Delivery is then effected by the winning
bidder, in accordance with the terms and conditions of the PO,
which may include the time required to start and terminate said deliveries and
the places of delivery.  Inspection of
deliveries are made at the delivery or project sites by a representative of the
Auditor’s office upon receipt of a verbal or written request for such inspection
prepared by the Property Custodian to the Auditor.  The Auditor’s representative inspects the
deliveries, signs the Delivery Receipts (DRs) and
finally, the Report of Inspection (ROI), duly concurred in by the Property
Custodian.  During said deliveries,
samples of the materials are also tested for their conformity with
specifications and the results of such tests are submitted to the District
Engineer to be attached to the payment vouchers, together with all other
supporting documents.

“After completion of deliveries, the corresponding General Voucher
(GV) for the payment of the supplies or materials delivered is prepared,
usually by someone at the district office. 
Said GV contains on the face thereof five (5) certifications to be
signed by the proper officials, namely, the Property Custodian, the Project
Engineer, the District or City Engineer, the Accountant and the District or
City Auditor attesting and certifying to the correctness, legality and
propriety of the transaction covered by said GV.  Attached to said GV
and required to be examined and verified by the proper district officials and
their subordinates are the requisite supporting documents, such as, the RSE,
ROA, Program of Work.  Detailed
Estimates, Request for Sealed Quotations, Abstract of Bids, PO,
DRs, Request for Inspection,
Test Reports and Tax Clearance Certificate of the supplier-contractor.  After the GV is processed, pre-audited and
approved, the papers are brought to the Cashier for the preparation of the
check or treasury warrant or TCAA check, which is also pre-audited.  The check is then released to the
supplier-contractor or his duly authorized representative who issues the
corresponding official receipt.

“At the end of each calendar month, the District Accountant
prepares several reports, including the Report of Obligations Incurred (ROI)
and the Report of Checks Issued (RCI), which are submitted to the Regional
Office.  At the Regional Budget and
Finance division, these reports, together with those coming from other
districts, are entered in the proper journals and, in the course of ordinary
accounting procedures, are entered in the General Ledger.  In turn, the entries in the General Ledger
become the basis for monthly Trial Balances (TBs)
which are prepared cumulatively by the Regional Accountant, recommended for
approval by the Regional Finance Officer and approved by the Regional Director,
which TBs are also submitted every month to the
Central Office of the MPH.  At the end of
the fiscal calendar year, the final Trial Balance is prepared by the Regional
Office and likewise submitted to the MPH.” (pp. 31-37, Rollo.)

Upon the evidence presented at the trial, the Sandiganbayan
found that:

1.  Although the BCHED had
received its allocation of P568,487.80 for 1978 for the maintenance and repair
of roads and bridges in that district the defendants caused the disbursement of
an additional sum of P627,239.88 through 14 fake general vouchers paid to
accused Jaime Ponce De Leon, for supposed deliveries from January to April 1978
of materials for the Dumaguete City North Road (2-1/2
kms.) and the Bais– Kabankalan Road (4 kms.),
utilizing three (3) fake LAAs and four (4) SACDCs (pp. 60-61, Rollo).  Per estimate of the Central Office, the
average cost of maintenance was only P11,000 per
kilometer of highway in 1978 (p. 57, Rollo) but
P627,239.88 was spent by the defendants in January to April 1978 to repair or
maintain 6-1/2 kms. of the Dumaguete City North Road and
the Bais-Kabankalan Road,
which should have cost only P71,500 more or less.

2.  The “badges of fraud”
proving the fake character of the three (3) LAAs and
four (4) SACDCs which served as bases for the
preparation and payment of the 14 GVs to Ponce De
Leon were:

(a)   the improper
charging of alleged prior year’s (1977) obligation to the 1978 LAAs and SACDCs which were irregularly
issued,

(b)   the improper
charging likewise of the illegal disbursements to “savings on equipment
rentals,”

(c)   the fake or
doubtful LAAs were not numbered in sequence,

(d)   there were no
references to the mother SAA numbers which are always cited in the regular or
authentic LAAs,

(e)   the fake LAAs were not recorded in the logbook maintained by the
Regional Office,

(f)   the rubber stamps for the certification of
availability of funds in the fake LAAs ‘were all
signed by accused Rolando Mangubat, Chief Accountant
I.’ Such certification in the regular LAAs were
usually signed by his assistant, Delia Preagido, and

(g)   the authorized
signatories of regular LAAs were either Finance
Officer Escano alone or jointly with Asst. Regional
Director Jose Bagasao, while the fake LAAs were signed by Mangubat and Bagasao (pp. 64-65, Rollo).

3. No copies of the programs of work were presented during the
investigation.  The programs of work for
the two projects prepared by Mananquil (and checked
and approved by Ramirez and Renacia) were “antedated
or manufactured” after, not before, the issuance of the 14 GVs (pp. 66-67, Rollo).

4. To facilitate the defraudation of
the Government, although the three (3) fake LAAs were
for amounts of P200,000, P250,000 and P200,000 each, and the SACDCs were for P100,000, P450,000, P20,000 and P200,000
each (p. 68, Rollo) the RSEs,
POs and GVs were split into amounts of less
than P50,000 each so that they could be processed, pre-audited, and approved by
the accused BCHED resident auditor Jose Veloso
instead of the COA Regional Auditor, as provided in COA Circular No. 76-41
dated July 30, 1976, in relation to COA Circular No. 16-16-A dated March 23,
1976, clarifying COA Circular No. 76-A dated February 10, 1976 (p. 69, Rollo).

5. The materials for the two road projects were not delivered by
the contractor, Ponce De Leon.  The
documents supporting the GVs payable to De Leon
were either antedated or undated, and all were hastily and haphazardly prepared
(pp. 70-71, Rollo).

6. Ponce De Leon was not a gravel-and-sand
extractor nor a supplier.  His
business was registered as “Allied Auto Supply/Marketing” and “Allied Transport
Services.” In 1978, he had not paid any extraction fees and he did not own or
lease any quarry, or trucks for hauling gravel and sand.  The delivery receipts (DRs)
for the materials supposedly delivered by him showed that only one truck was
used to make simultaneous deliveries at the two project sites which were more
than 60 kilometers apart (pp. 72-73, Rollo), proving
that the DRs were fictitious.

7. No maintenance engineers or foremen of the BCHED supervised
and inspected the two projects (p. 73, Rollo) which
otherwise would have been done if there was actual ongoing work in those
projects.

8. The accused public officials, by the nature of their duties,
would have known that the documents (LAAs, SACDs, RSEs, POs, and GVs) were fake by merely scrutinizing them, or by the
exercise of ordinary diligence, for the funding of the three LAAs was irregular and the RSEs
and GVs had been “split” into uniform amounts of not
more than P50,000 each.

9. Ponce De Leon knew fully well that his participation in the
transactions was “only make-believe or a farce;” but he whole-heartedly
cooperated and conspired with his co-accused to consummate their common plan to
defraud the Government (p. 79, Rollo).

Section 3(e) of Republic Act No. 3019, which the petitioners
violated, provides:

“Sec. 3. 
Corrupt Practices of Public Officers.  – In addition to acts or omissions of public
officers already penalized by existing law, the following shall constitute
corrupt practices of any public officer and are hereby declared to be unlawful:

“xxx        xxx       xxx

“(e)         Causing
any undue injury to any party, including the
Government, or giving any private party any unwarranted benefits,
advantage or preference in the discharge of his official administrative or
judicial functions through manifest partiality, evident
bad faith or gross inexcusable negligence.  This provision shall apply to officers and
employees of offices or government corporations charged with the grant of
licenses or permits or other concessions.”

The elements of this offense are:

(1)            That the
accused are public officers or private persons charged in conspiracy with them;

(2)            That said
public officers commit the prohibited acts during the performance of their
official duties or in relation to their public positions;

(3)            That they
cause undue injury to any party, whether the Government or a private party;

(4)            That such
injury is caused by giving unwarranted benefits, advantage or preference to
such parties; and

(5)            That the
public officers have acted with manifest partiality, evident bad faith or gross
inexcusable negligence (pp. 82-83, Rollo).

As observed by the Sandiganbayan, all
these elements are present in these 14 cases.

“In the cases at bar, all the above-cited requisite elements are
present.  When accused Bagasao and Mangubat, as Asst.
Regional Director and Regional Accountant, respectively, issued the fake LAAs and corresponding SACDCs to
the BCHED, knowing fully well that the allotments and/or allocation thereunder were not properly authorized by the Ministries
of the Budget and the Public Highways and neither have they been programmed for
release in accordance with standard operating procedure, they thus acted with
evident bad faith.  Accused Renacia and Delostrico likewise
acted with evident bad faith in receiving and implementing the fake LAAs and SACDCs since they should
have known and noticed that the allotments released thereunder
were not for ‘regular maintenance,’ especially so when the district had just received
its first quarter allocations for 1978; that they had not requested formally
for such extra allocations; that the LAAs and SACDCs were fake or spurious on their faces and signed by
unauthorized officials, and that they had not prepared any program of work to
justify such extra allocations.

“All the accused officials from the BCHED, namely, Renacia, Salva, Camarra, Ramirez, Posadas and Mananquil, who were all engineers, and their subordinates
in the prosecution of projects in the district, namely, Babao
and Altura, together with those involved in
administrative, accounting and auditing functions, namely, Mier,
Delostrico, Racho, Pascualdo and Sevilla, likewise
acted with evident bad faith and manifest partiality in participating in the
preparation, processing and approval of the GVs and
supporting documents, such as RSEs, Requests for
Obligation of Allotment (ROAs), Abstracts of Bids,
POs, Delivery Receipts (DRs), Summary of Deliveries,
Reports of Inspection (ROIs) and Checks in payment of
‘ghost projects’ to a fake or spurious contractor-supplier, Jaime Ponce de
Leon.  They not only connived and
confederated in the hasty and mass production of such ante-dated documents,
including programs of work, but also allowed their names, positions and
signatures to be used in completing the cycle which would lend a semblance of
legality or regularity to the questioned transactions and illegal disbursements
[of public funds to a fake contractor-supplier], thus causing undue injury to
the Government in the total amount of P627,230.99.  x x
x.

“x x x.  He also
knew for a fact that the district had no prior year’s unliquidated
obligations in the amount of P650,000.00, hence, any
and all LAAs with correspsonding
SACDCs would be questionable, if not fake, spurious
or irregular.  He and accused Delostrico, the district accountant, were fully aware of
the standard operating procedure in the release of quarterly allotments and
should not have accepted, much less, utilized the fake LAAs
and SACDCs for alleged ‘ghost projects’ which were
not supported by approved programs of work and RSEs
approved in the Regional Office.  x x x.

“xxx        xxx       xx

“Finally, Mangubat cannot escape or be
absolved from liability in the sordid mess. 
He initiated the entire scheme, together with accused Asst. Regional
Director Jose Bagasao, when they issued fake LAAs and which he followed up by issuing fake SACDCs.  He later
tried to cover-up the illegal and improper disbursement of public funds by
certifying to the correctness of the Journal Vouchers at the end of the year
through the utilization of ‘negative entries’ which enabled the region’s financial
records to reflect what he only wanted to reflect, which is, the disbursements
of funds thru regular LAAs and SACDCs
for 1978 but negating the amounts of the disbursements thru the fake LAAs and SACDCs.”  (pp. 83-87, Rollo.)

The petitioners’ attempt to denigrate the testimonies of the
prosecution witnesses, Apollo Sayo and Victoria Quejada, members of the investigating team, is unavailing
for the principal evidence against the accused in these cases are
documentary.  The existence of the
documents and of their signatures therein, is not denied by them.  Their guilt of the crimes charged had been
established beyond reasonable doubt.

WHEREFORE, the petition for review is dismissed.  The appealed decision in SB Crim. Cases Nos. 7201 to 7214 is affirmed in toto, with costs against the petitioners.

SO ORDERED.

Fernan, C.J., Narvasa,
Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco,
Padilla, Bidin, Sarmiento,
Cortes, Medialdea, and
Regalado, JJ., concur.

* Criminal Cases Nos. 7201-7214

* Who are not petitioners in this case.

* All from the Manila Central Office.