G.R. No. 180236 - Cabalit vs. Commission on Audit

On September 4, 2001, the Philippine Star News reported that employees of the Land Transportation Office (LTO) in Jagna, Bohol, were tampering with income reports, shortchanging the government.
In response, COA Regional Director Ildefonso T. Deloria tasked State Auditors Teodocio D. Cabalit and Emmanuel L. Coloma to conduct a fact-finding investigation.
The investigation revealed widespread tampering of official receipts from 1998 to 2001, involving 106 receipt sets.
The modus operandi involved detaching Plate Release and Owner's copies of receipts, correctly filling them, while typing incorrect data on other copies (Collector, EDP, Record, Auditor, Regional Office) to reflect lower registration fees, which were then reported, pocketing the difference.
Petitioners Leonardo G. Olaivar, Gemma P. Cabalit, Filadelpo S. Apit, and Samuel T. Alabat were implicated; the total unreported income reached P169,642.50.

COA reported the irregularity to Deputy Ombudsman Primo C. Miro on August 8, 2002.
Charges for dishonesty were filed against Olaivar, Cabalit, Apit, and Alabat; the latter denied any tampering.
Petitioners submitted counter-affidavits denying knowledge or responsibility. Olaivar claimed receipts were typed by others and he only signed them; Cabalit stated her duty was to receive deposits and she was unaware of anomalies; Apit denied knowledge and alleged forgery of his signature; Alabat also denied involvement.

State Auditor Cabalit testified on the investigation, showing discrepancies between original and tampered receipts.
Olaivar's signature appeared on all tampered receipts and he signed the Report of Collections endorsing the falsified figures.
Cabalit and Apit also signed the receipts; tampered receipts bore their signatures on Owner's copies but not on file copies.

Administrative Order No. 17 amended the procedural rules during the proceedings, directing parties to submit position papers instead of traditional trial-type hearings.
COA submitted a position paper pointing to the indispensable role of the petitioners; Olaivar allegedly approved amounts and attested to falsified reports; Cabalit received payments but submitted tampered collections report; Apit countersigned receipts facilitating irregularities.

The Office of the Ombudsman-Visayas found the petitioners liable for dishonesty and dismissed them from service, except Alabat whose complaint was dismissed due to insufficient evidence.
The CA affirmed the decision with modification: it held Olaivar liable for gross neglect of duty instead of dishonesty, while affirming the dishonesty findings against Cabalit and Apit.
The CA reasoned that Cabalit and Apit could not have been unaware of the irregularities due to their routine functions; Olaivar failed to exercise diligence to prevent the tampering.

Petitioners challenged the procedures followed—especially the applicability and retroactive effect of A.O. No. 17.
Cabalit contested the acceptance of position papers only without formal hearing and the attribution of forged signatures to her.
Apit raised errors in limiting due process and failure to consider evidence of signature forgery.
Olaivar denied participation and challenged being held liable only for gross neglect, claiming reliance on subordinates.

Whether the application of Administrative Order No. 17 during ongoing proceedings violated petitioners’ right to due process.
Whether the petitioners (Cabalit, Apit, and Olaivar) are administratively liable for dishonesty or gross neglect in connection with the tampering of official receipts.