A.M. No. P-15-3398 - Office of the Court Administrator vs. Sarabia, Jr.

Case Summary (A.M. No. P-15-3398)

Factual Background

The OCA-ordered audit examined various court funds handled by the OCC. The audit report disclosed material shortages and accounting irregularities for the period November 2010 to July 2015. In relation to the Judiciary Development Fund (JDF), Special Allowance for the Judiciary Fund (SAJF), and Mediation Fund (MF), the audit showed collections and deposits with an overall computed shortage in JDF and SAJF, arising mainly from remittances recorded in cashbooks and monthly reports but without deposit slips presented for verification. The computed shortages were P84,679.60 for JDF and P52,317.52 for SAJF.

The audit likewise examined the Sheriffs Trust Fund (STF). It reported an unwithdrawn STF balance of P10,466,811.20 as of 31 July 2015. Reconciliation against an adjusted LBP S/A No. 0161-2172-71 produced a shortage of P39,167.66, attributed to, among others, outstanding shortages of an accountable officer, unaccounted bank error in running balance, and undeposited collections, as well as withdrawals lacking supporting documents and over-withdrawals.

Most consequentially, the audit examined the Fiduciary Fund (FF). It reported an unwithdrawn FF balance of P197,001,702.75 as of 31 July 2015, and reconciliation against an adjusted LBP S/A No. 01611521-45 revealed a computed shortage of P24,711,252.70. The report attributed this shortage to multiple accounting and remittance failures, including: unaccounted withdrawals not reflected in cashbooks and monthly reports; undeposited collections; shortages arising from erroneous withdrawals of consignation deposits that were later redeposited only in partial amounts; double withdrawals of bonds in various cases; over-withdrawal of cash bond; interest erroneous withdrawals from the fiduciary account; restitution entries treated as implicit acknowledgments of shortages; and shortages as of 31 October 2010, including bank errors and items recognized as deposit-in-transit.

Audit’s Accountability Recapitulation and Identified Control Failures

In recapitulating Sarabia’s accountability, the audit computed the total initial shortages attributable to him at P16,704,893.46, broken down as P16,535,396.34 for the FF, P84,679.60 for JDF, P52,317.52 for SAJF, and P32,500.00 for STF. The audit team concluded that the computed shortage resulted mainly from Sarabia’s failure to deposit his Fiduciary Fund collections in full and intact, and observed that daily cash bonds were allegedly either under-deposited or not deposited at all during critical periods (notably March 2012 to January 2013 and June 2013 to May 2015).

The audit team explained the OCC’s process: judiciary collections for the day were to be picked up by an LBP roving teller in the afternoon of the following day; thus, collections, including cash bonds, were to be kept in a safety vault in Sarabia’s office before turn-over to the LBP teller. The audit invoked Supreme Court Circular No. 13-92, requiring that “all fiduciary fund collections shall be deposited immediately by the Clerk Of Court concerned, upon receipt thereof, with an authorized depository bank.” It also noted violations of Amended Administrative Circular No. 35-2004 on the timely deposit of judiciary collections.

The audit team further assessed that Sarabia appropriated cash bond collections for personal use, and it questioned whether Cash Clerk Salazar was in cohort with him for the alleged undeposited fiduciary collections. It stated that Salazar was the over-all in-charge of safekeeping of judiciary collections prior to deposit, and that she and Sarabia were the only persons who knew the safety vault combination lock. The audit team also criticized Salazar’s silence for an extended period despite alleged knowledge of Sarabia’s misappropriation, stating that had she reported the wrongdoing, the computed fiduciary fund shortage could have been minimized or prevented.

Procedural History Before the Supreme Court

Following the audit, the audit team recommended docketing the report as a regular administrative complaint against Sarabia and Salazar. The OCA adopted the audit findings in a memorandum dated September 28, 2015 and requested approval of the audit recommendation. On November 11, 2015, the Court issued a resolution that, among others: (i) docketed the OCA report as a regular administrative complaint; (ii) indefinitely suspended Sarabia pending resolution; (iii) required Sarabia to explain why no administrative and criminal cases should be filed for failure to account for a total computed shortage of P16,704,893.46; (iv) required him to restitute the computed shortage and to submit documents supporting unaccounted credits or otherwise restitute; (v) indefinitely suspended Salazar pending resolution and required her to explain why she should not be impleaded and charged; and (vi) issued a hold departure order.

Sarabia responded with a one-page memorandum dated April 4, 2016, which he characterized as compliance. He apologized for negligence, attributed the failure to his trust in the staff of the cash section, invoked command responsibility, and asked for understanding and compassion. Salazar denied participation and offered explanations for her lifestyle, including an affidavit about the source of her housing and vehicles.

Thereafter, the audit team submitted a final audit report dated April 5, 2016, where it also found Sarabia accountable for undocumented withdrawals totaling P1,753,463.18. Executive Judge Emmanuel C. Carpio of RTC Davao City later issued an investigation report dated June 6, 2016, finding Salazar guilty of gross neglect of duty and dishonesty and recommending dismissal; finding Oquindo guilty of simple neglect of duty and recommending reprimand; and recommending exoneration for Agbayani and Marquez for lack of basis. The OCA later adopted its final recommendation in Memorandum dated November 20, 2019, recommending dismissal of Sarabia for serious offenses and recommending dismissal of Salazar, reprimand for Oquindo through fine, and exoneration for Agbayani and Marquez. The Court resolved to partially adopt and approve the OCA recommendations.

The Supreme Court’s Legal Framework and Evidentiary Standard

The Court reiterated that the constitutional mandate that public office is a public trust applies equally to all public officers, including court employees, and emphasized the mission of court personnel and the strict standards of integrity required of them. It underscored the delicate role of the Clerk of Court as the custodian of court funds and revenues, and it noted that clerks of court are expected to submit monthly reports and immediately deposit funds to authorized depositories.

On the required quantum of proof, the Court held that administrative cases—such as the present—require substantial evidence, which exists when there is reasonable ground to believe, based on the evidence submitted, that the respondent is responsible for the complained-of misconduct. The Court also applied the framework of Rule 140 governing discipline of members and employees of the Judiciary, including its retroactive application to pending and future administrative cases through its amendments, consistent with Section 24 of the rules on judicial discipline.

Issues Considered by the Court

The Supreme Court assessed the proper administrative charges and corresponding sanctions based on: (a) Sarabia’s accountability for shortages and undocumented withdrawals of court funds; (b) whether Salazar’s failure to report and her role in safekeeping and handling funds made her administratively liable for dishonesty and neglect; (c) the correct characterization and penalty for Oquindo’s conduct; and (d) whether Agbayani and Marquez could be held liable based on the evidence presented, particularly on the element of personal knowledge.

Liability of Atty. Edipolo P. Sarabia, Jr. (Clerk of Court VI)

The Court held that Sarabia’s guilt for Gross Misconduct, Gross Neglect of Duty, and Commission of a Crime Involving Moral Turpitude for malversation of public funds was established by more than substantial evidence. It noted Sarabia’s admission that he failed to account for the computed shortage and his response that the failure was due to trust in his staff, which did not negate accountability.

For Gross Misconduct, the Court classified it as a serious charge under Section 14(a), Rule 140, requiring the presence of elements such as corruption, clear intent to violate the law, or flagrant disregard of established rules, manifest by substantial evidence. The Court found that Sarabia violated Canon 1 of the Code of Conduct for Court Personnel (CCCP), particularly provisions on fidelity to duty and the requirement that court personnel use resources and funds under official custody judiciously and solely according to prescribed guidelines. The Court further considered the substantial amount involved and Sarabia’s apparent lack of remorse or meaningful cooperation, as shown by his brief response.

On Gross Neglect of Duty, the Court treated it as a serious charge under Section 14(d), Rule 140, and defined gross neglect as negligence characterized by want of even slight care, or wilful and intentional omission to act with conscious indifference to consequences. The Court concluded that Sarabia’s failures were not inadvertent and were consistent with culpable disregard of his duty.

Regarding malversation of public funds, the Court quoted the elements: (a) the offender is a public officer; (b) the offender had custody or control by reason of the duties; (c) the funds are public funds for which the offender is accountable; and (d) the offender appropriated or misappropriated, or allowed through abandonment or negligence another person to take them. Finding substantial evidence that Sarabia committed the crime, the Court held him administratively liable for violation of Section 14(f), Rule 140 through commission of a crime involving moral turpitude.

The Court then

Case Syllabus (A.M. No. P-15-3398)

Parties and Procedural Posture

The Office of the Court Administrator (OCA) filed and prosecuted an administrative matter involving officers of the Office of the Clerk of Court (OCC) of the Regional Trial Court (RTC), Davao City, Davao del Sur.
The respondents were Edipolo P. Sarabia, Jr. (Clerk of Court VI), Haydee B. Salazar (Cash Clerk III), Marifi A. Oquindo (Clerk III), Aimee May D. Agbayani (Clerk III), and Orlando A. Marquez (Clerk III).
The OCA’s audit findings were adopted as a regular administrative complaint by resolution dated November 11, 2015, and the Court later issued the final administrative decision after further evaluation.
The Court indefinitely suspended Sarabia and Salazar pending resolution, and required written explanations and possible criminal charges for Sarabia.
The Court later resolved Sarabia’s, Salazar’s, and Oquindo’s liabilities and exonerated Agbayani and Marquez for insufficient evidence.
The decision declared itself immediately executory and directed the OCA to file with dispatch the appropriate criminal charges.

Triggering Events and Audit Findings

The OCA ordered an immediate financial audit after the continued failure of Clerk of Court VI Sarabia to submit monthly financial reports of collections, deposits, and withdrawals despite notice from the OCA’s Financial Management Office (FMO) Accounting Division.
Pursuant to Travel Order No. 83-2015 dated August 7, 2015, a financial audit was conducted by a team led by Mr. Romulo E. Tamanu, Jr. in the OCC, RTC, Davao City.
The audit examined multiple judiciary funds including the Judiciary Development Fund (JDF), Special Allowance for the Judiciary Fund (SAJF), Mediation Fund (MF), the Sheriffs Trust Fund (STF), and the Fiduciary Fund (FF).
For the JDF/SAJF/MF, the audit computed shortages attributable to remittances recorded in cashbooks and monthly reports but supported by missing or non-submitted deposit slips for examination.
For the STF, the audit reported an unwithdrawn Sheriffs Trust Fund balance with a computed shortage of P39,167.66 based on reconciliation against an adjusted LBP S/A account.
For the FF, the audit reported an unwithdrawn Fiduciary Fund balance and a substantial shortage of P24,711,252.70, derived from categories including unaccounted withdrawals, undeposited collections, improper redeposits, double withdrawals of bonds, over-withdrawal, erroneous interest withdrawals, and other timing and banking errors.

Accountability Recapitulation

The audit recapitulated Sarabia’s initial computed shortages totaling P16,704,893.46, consisting of P16,535,396.34 for FF, P84,679.60 for JDF, P52,317.52 for SAJF, and P32,500.00 for STF.
The audit concluded that Sarabia’s computed shortage resulted mainly from failure to deposit fiduciary collections in full and intact.
The audit observed that Sarabia’s fiduciary collections for selected periods disclosed that daily cash bonds were either under-deposited or not deposited at all.
The audit identified OCC procedure where daily judiciary collections were kept in a safety vault and were turned over to the LBP roving teller the next day.
The audit treated the failure to deposit fiduciary funds promptly as a violation of Supreme Court Circular No. 13-92, which required immediate deposit of fiduciary fund collections upon receipt with an authorized depository bank, and also cited Amended Administrative Circular No. 35-2004 on timely deposit of judiciary collections.

Alleged Misappropriation and Concealment

The audit team believed Sarabia appropriated cash bond collections for personal use, thereby violating SC Circular No. 13-92 and administrative deposit rules.
The audit team questioned whether Salazar was in cohort with Sarabia because she was the overall in-charge of safekeeping of judiciary collections before deposit and because both Salazar and Sarabia were the only persons who knew the safety vault combination lock.
The audit team alleged that Salazar failed to report alleged misappropriation of fiduciary collections for an extended period, which the audit team characterized as enabling concealment.
The audit team recounted that after the audit-related investigation, the OCC withdrew certain consignation deposits for refund on November 6, 2014 but did not immediately refund the consignees due to improper authorization.
The audit team found that the withdrawn amount of P1,800,600.00 was not fully redeposited immediately and created an additional shortage of P810,600.00 based on delayed redeposits.
The audit also treated various events of double withdrawals and other improper withdrawal and deposit patterns as part of Sarabia’s accountability.
The audit treated a deposit of P200,000.00 in March 2013 without corresponding collection and official receipt as restitution and considered it as indicative of an implied admission of misappropriation.

Initial Administrative Proceedings and OCA Recommendations

The audit team recommended that the findings be docketed as a regular administrative complaint against Sarabia and Salazar and directed further inquiry into other potentially responsible officers.
The OCA adopted the audit findings and requested approval of the audit recommendations in a memorandum dated September 28, 2015.
The Court’s resolution dated November 11, 2015 docketed the complaint, suspended the respondents, required written explanations, and directed Sarabia to restitute computed shortages and submit supporting documents for certain unaccounted credits.
Sarabia responded with a memorandum dated April 4, 2016, in which he admitted failing to account for the computed shortage but framed it as negligence attributed to trust in the cash section and invoked command responsibility and personal remorse.
Salazar denied participation, explained her lifestyle using an affidavit of her live-in partner, and claimed her assets were financed through a car rental business, while maintaining she had no participation in the alleged anomaly.

Executive Judge’s Investigation Results

Executive Judge Emmanuel C. Carpio of the RTC conducted a preliminary investigation based on the OCA’s directives and audit materials.
In an investigation report dated June 6, 2016, the Executive Judge found Salazar guilty of gross neglect of duty and dishonesty and recommended dismissal.
The Executive Judge found Oquindo guilty of simple neglect of duty and recommended reprimand.
The Executive Judge recommended exoneration for Agbayani and Marquez for lack of basis to hold them administratively liable.
The OCA later evaluated the Final Audit Report and issued a recommendation dated November 20, 2019.

OCA Final Recommendation

The OCA recommended finding Sarabia guilty of gross misconduct, gross neglect of duty, dishonesty, and malversation of public funds in the amount of P18,458,356.64 and ordering dismissal with forfeiture of benefits except accrued leave credits and disqualification from government service.
The OCA recommended that Sarabia restitute P16,704,893.46 for shortages across multiple funds and also restitute P1,753,463.18 for undocumented withdrawals.
The OCA recommended filing appropriate criminal charges and issuing a writ of preliminary attachment over Sarabia’s properties and bank deposits to satisfy the total shortages.
The OCA recommended that Salazar be found guilty of gross neglect of duty and dishonesty, be dismissed with corresponding administrative disabilities, and be criminally charged for the undeposited collections.
The OCA recommended fines for Oquindo and exoneration for Agbayani and Marquez.

Constitutional and Evidentiary Standards

The Court invoked Art. XI, Sec. 1, 1987 Constitution, emphasizing that public office is a public trust and that public o