G.R. No. 143403 - Cruz vs. Gangan

Filonila O. Cruz, a government employee and district director of the TESDA in Camanava, Caloocan City, was issued a government-owned cellular phone (a Nokia 909 analog model).
On January 15, 1999, after a consultation at the TESDA Regional Office in Taguig, Metro Manila, she returned to her official station by boarding the Light Railway Transit (LRT).

While on board the LRT from Sen. Gil Puyat Avenue to Monumento, her handbag was slashed by an unidentified person, resulting in the theft of its contents, which included her wallet and the government-issued cellular phone.
The loss occurred during a period when the LRT was almost always crowded, suggesting a heightened risk of petty crimes such as pickpocketing and bag snatching.

On the same day of the incident, petitioner immediately reported the theft to the police, prompting an investigation that ultimately failed to locate the culprit or recover the phone.
Three days later, on January 18, 1999, she formally reported the incident to the regional director of TESDA-NCR through a memorandum, in which she also requested relief from accountability for the lost phone.
The request was subsequently processed through administrative channels:

The regional director issued a 1st Indorsement on January 19, 1999.
A 2nd Indorsement by the resident auditor on February 26, 1999, resulted in the denial of the relief request on the ground that petitioner failed to exercise the necessary diligence in safeguarding the property.

Following this, petitioner was ordered to pay the book value of the lost cellular phone (P3,988) plus its case (P250), totaling P4,238.
The decision of the resident auditor was sustained by the director of the National Government Audit Office II (NGAO II) and ultimately upheld by the Commission on Audit (COA).

The case involved evaluating the appropriate level of care a government employee must exercise in safeguarding government property while in transit.
It also touched upon the standards of accountability under Section 105 of Presidential Decree 1445 and the protocols required for reporting losses due to theft, as provided by the applicable rules and regulations governing official property.

Whether petitioner, by choosing to board the LRT despite possessing a government-issued cellular phone, failed to exercise the degree of diligence required in the custody and proper management of government property.
Whether riding the LRT, under the circumstances of limited transportation alternatives and time constraints, constitutes a negligent act that could justify accountability for the loss.

Whether the COA committed grave abuse of discretion in its finding that petitioner was negligent in the handling of the property.
Whether the COA improperly applied the case of Nakpil vs. CA, 144 SCRA 596, and disregarded Article 1174 of the New Civil Code, thereby failing to recognize that negligence must be proven beyond mere speculation.
Whether petitioner’s timely notification and application for relief from accountability should exempt her from being held liable for the loss, given that the loss occurred under circumstances of theft rather than due to her willful neglect.