Title
Bauzon vs. Municipality of Mangaldan, Pangasi
Case
G.R. No. 233316
Decision Date
Nov 4, 2020
Municipal Treasurer dismissed for Grave Misconduct after failing to detect payroll irregularities, facilitating fraud and corruption.
municipal treasurer
grave misconduct
gross negligence

Case Summary (G.R. No. 233316)

Factual Background

On April 4, 2012, respondent received Audit-Observation Memorandum (AOM) No. Mang. 2012-021 dated February 13, 2012 from the COA. The AOM stated that payrolls and liquidation documents pertaining to the 2011 cash advances of the Assistant Municipal Treasurer amounting to P29,362,148.95 were not submitted for post-audit. On April 19, 2012, respondent received another AOM observing that, during the COA post-audit on disbursement and payroll accounts, some basic requirements in respondent’s disbursement process were not complied with.

The COA Regional Office then issued several AOMs, Notices of Suspension, and Notices of Disallowance. The Notices of Disallowance involved cash advances for payrolls for the months of January to March 2011, May to December 2011, and January to March 2012. The Notices of Disallowance identified Marilyn D. Gonzales (as accountable officer), Evelyn L. Bernabe (as internal auditor), and petitioner (as the official directly responsible for check preparation), among those liable. The records showed that the folders for disallowed payrolls revealed that the totals in the obligation requests and payrolls were altered and increased to reflect an incorrect, higher amount. A total of P1,959,155.00 was later returned to respondent pursuant to Bernabe’s letter dated May 3, 2012 to the Provincial Auditor and the municipal government’s official receipts.

Meanwhile, petitioner and Bernabe appealed the COA Notices of Disallowance before the Office of the Regional Director in San Fernando City, La Union.

Administrative Complaint and Preliminary Action

On May 15, 2012, then Mayor Herminia A. Romero filed with the Civil Service Commission Regional Office No. I (CSCRO I) a complaint for Grave Misconduct and Gross Dishonesty, Disgraceful and Immoral Conduct, and Conduct Prejudicial to the Best Interest of the Service against Helen A. Aquino, Gonzales, Bernabe, and petitioner.

After preliminary investigation, Atty. Engelbert Anthony D. Unite, Director IV of CSCRO I, issued Resolution No. FC-2012-046, finding a prima facie case against Gonzales, Bernabe, and petitioner. In Decision No. 2012-065, the charge against Aquino was dismissed. Mayor Romero’s motion for reconsideration was denied for lack of merit through Resolution No. 12-00047, and formal investigation then proceeded.

Ruling of the CSCRO I

On June 26, 2014, CSCRO I issued Decision No. 14-0066. It found Bernabe, Gonzales, and petitioner guilty of Grave Misconduct and dismissed them from service with all accessory penalties.

CSCRO I held that petitioner’s and Bernabe’s failure to notice, bring out, or take action on irregularities committed by Gonzales supported the inferences arising from Gonzales’s admissions and statements in her comment and counter-affidavit. It emphasized that the disallowed payrolls showed that the total amount was altered and increased, facilitating illegal check padding. It found it unbelievable that Bernabe and petitioner could not have noticed such alterations across almost the entire year of 2011 and into early 2012. It further concluded that while Gonzales committed the irregularities in preparing illegally padded checks, Bernabe and petitioner acquiesced through omission amounting to highly inexcusable neglect of duty.

CSC Disposition

Petitioner sought review before the CSC proper. On December 5, 2014, the CSC affirmed CSCRO I’s dismissal through Decision No. 140931, and it denied reconsideration through Resolution No. 1500279 dated March 3, 2015.

The CSC’s findings focused on petitioner’s position and functions. It noted petitioner’s explanations that payrolls prepared by the Office of the Municipal Accountant were transmitted to the Treasurer’s Office, payrolls were forwarded to the Mayor for approval, the approved payrolls were returned to the Treasurer’s Office, which prepared cash advance vouchers and checks, and that at that stage petitioner had a duty to verify the amount stated in the cash advance vouchers against the summary of the payrolls to be paid. The CSC stressed that before petitioner could make the required summary, she had to examine the payrolls involved and therefore had an opportunity to see the alterations in the totals. As Municipal Treasurer, it held her duty was primary: to take custody of and manage municipal funds and to exercise responsibility for the preparation of checks, which meant she could not evade accountability by shifting blame solely to the Assistant Municipal Treasurer.

The CSC ruled that petitioner deliberately failed to observe the irregularities committed by Gonzales, as reflected in Gonzales’s admitted statements. It treated the disallowed payrolls as indisputable evidence that the total amounts were altered and increased, leading to illegal check padding. It also rejected petitioner’s defense that she was unaware of payroll alterations and treated her denial as inconsistent with the reality that the payroll alterations were apparent enough to be detected through the functions she performed, particularly within the period spanning 2011 to early 2012.

CA Ruling

Petitioner appealed to the CA. In its Decision dated March 20, 2017, the CA affirmed the CSC.

The CA reasoned that petitioner’s failure to take custody of and exercise proper management of municipal funds not only violated Republic Act No. 7160, but also reflected adversely on her capacity as Municipal Treasurer. It held that the treasurer should exercise the highest degree of care over custody, management, and disbursement of municipal funds. It acknowledged that petitioner’s office employed a system in which other offices handled steps in the cash disbursement process before the check was signed. Still, it emphasized that the system did not relieve petitioner because she remained the head of the office and therefore retained direct supervision and control over subordinates.

The CA concluded that petitioner’s failure to ensure the correctness of the amounts indicated in documents she signed showed wanton and deliberate disregard of the demands of public service. It characterized the misconduct as grave because it paved the way for fraud against and consequent damage to the Municipality of Mangaldan. It further held that petitioner could not easily shift responsibility to subordinates by pointing to the internal procedures she implemented.

The CA denied reconsideration through a Resolution dated July 4, 2017.

Issues Raised by Petitioner

Petitioner argued, in substance, that the CA erred in affirming the CSC and that she should not have been held guilty of grave misconduct because respondent failed to discharge its burden of proving the complained acts.

Supreme Court’s Ruling: Petition Denied

The Supreme Court denied the petition for lack of merit.

The Court held that petitioner’s challenges to the CSC and CA findings necessarily involved questions of fact, which were beyond the Court’s jurisdiction in a petition for review on certiorari under Rule 45, particularly where both the CA and CSC had reached uniform findings and conclusions. The Court noted the limited jurisdiction admits of exceptions but found none existed or was even alleged.

Legal Basis and Reasoning on Grave Misconduct

The Court explained the meaning of misconduct and its qualified form when coupled with “gross.” It characterized misconduct as wrongful or unlawful conduct motivated by premeditated, obstinate, or intentional purpose, involving transgression of established and definite rules of action and dereliction of duty. It stated that misconduct becomes grave when it is “out of all measure beyond allowance,” “flagrant,” “shameful,” and “such conduct as is not to be excused,” and it requires proof of elements such as corruption, willful intent to violate the law, or willful disregard of established rules by substantial evidence.

Applying these standards, the Court held that the evidence on record established a pattern of negligence and gross misconduct attributable to petitioner. It treated petitioner’s omission—failure to take proper custody of and exercise proper management of municipal funds—as constitutive of a serious dereliction of duty that provided a ripe opportunity for fraud and corruption. It stated that her responsibility was particularly weighty because she was the officer in custody of public funds and directly involved in check preparation and verification.

To support the legal framework and the evaluation of responsibility of public officers handling public funds, the Court cited earlier administrative and disciplinary decisions involving dishonesty, gross misconduct, and failure to ensure safeguards. It referenced Gonzales v. Civil Service Commission, where the Court dismissed for dishonesty and gross misconduct due to deceitful facilitation of check accommodation while flouting law, procedures, and standards of behavior. It likewise cited Civil Service Commission v. Almojuela, where the Court found gross misconduct in consenting to a prisoner’s escape due to willful violation of duty. The Court also rel

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