G.R. No. 247916 - Chen vs. Field Investigation Bureau

On September 26, 2016, the Field Investigation Bureau of the Office of the Deputy Ombudsman for the Military and Other Law Enforcement Offices (FIB-MOLEO) filed 21 complaints against 25 Philippine Coast Guard (PCG) officials, including petitioner Radm. Cecil R. Chen PCG (Ret.), for Serious Dishonesty, Grave Misconduct, and Conduct Prejudicial to the Best Interest of the Service.
The complaints stemmed from an anonymous tip and the findings of Audit Observation Memorandum No. PCG-2015-018 (AOM 15-018) dated April 15, 2015 by the Commission on Audit (COA), focusing on irregularities in liquidation of cash advances and reimbursements made in 2014.

COA reported that as of December 31, 2014, PCG granted cash advances totaling P689,640,806.06 to 21 Special Disbursing Officers (SDOs), with total liquidations amounting to P633,612,786.45.
These cash advances were authorized and approved by high-ranking officials including the PCG Commandant and Comptrollership heads.
COA found lack of official office orders duly designating SDOs for these cash advances, and discrepancies such as some business establishments listed in sales invoices, cash invoices, or receipts not found at their indicated addresses.
COA's validation of liquidation documents revealed denials by some establishments about the authenticity of the attached invoices and receipts.

FIB-MOLEO asserted that cash advances were irregularly issued without proper documentary support designating the SDOs, violating COA Circular No. 97-002 which requires cash advances only to duly designated disbursing officers and only for specific purposes.
It was further claimed that the respondents violated PD 1445 (Government Auditing Code) and RA 9184 (Government Procurement Reform Act), citing failure to liquidate previous advances before releasing new ones and irregular use of emergency procurement without justification.

Petitioner was allegedly involved in two disbursement vouchers (DVs) for P1 million each on December 11, 2013 and February 3, 2014, for office supplies and IT equipment.
Petitioner’s defense included: presentation of special orders supposedly designating him as SDO, reliance on the PCG Accounting Department for disbursement and liquidation processes, and denial of involvement in purchasing decisions or conversion of funds.
He claimed good faith, lack of intent to deceive, and questioned the authenticity of his signature on at least one check. He also asserted he was made a scapegoat in a conspiracy by others.

On July 19, 2017, the Ombudsman Special Panel found petitioner and other PCG officials guilty of Serious Dishonesty, Grave Misconduct, and Conduct Prejudicial to the Best Interest of the Service, imposing dismissal from service with accessory penalties.
The panel held that officials disregarded procurement rules, committed fraud in purchases, and compromised government service integrity.
Motions for reconsideration were denied on November 6, 2017.

Petitioner appealed to the CA, which on July 30, 2018, affirmed the Ombudsman’s decision, dismissing the petition.
The CA found petitioner liable for Grave Misconduct, Serious Dishonesty, and Conduct Prejudicial to the Best Interest of the Service based on his approval of disbursements lacking proper supporting documents, evasion of competitive bidding, and dishonest acts that caused serious damage to the government.
A motion for reconsideration was denied by the CA on June 20, 2019.

He merely signed reports certified by the PCG Chief Accountant and fully liquidated previous advances.
He had no role in purchase/receipt of supplies.
The transactions complied with applicable procurement laws.
The presumption of regularity applies, he acted in good faith, and was coerced by the PCG’s flawed system.
He was wrongly implicated and had no intent to deceive or injure government interests.

Whether the Court of Appeals erred in holding petitioner liable for irregular grant of cash advances as a designated Special Disbursing Officer despite proof of liquidation and certification by PCG Accounting.
Whether the Court of Appeals erred in finding petitioner administratively liable for Serious Dishonesty, Grave Misconduct, and Conduct Prejudicial to the Best Interest of the Service despite evidence showing non-participation in procurement and receipt of supplies.