Philippine Supreme Court Jurisprudence

A clerk of court is the designated custodian of the funds, revenues, properties and premises of the court she serves. She must faithfully perform her duties and responsibilities as such; otherwise, she may be dismissed from the service for gross dishonesty, or grave misconduct, or gross neglect of duty.

This administrative matter stemmed from findings of shortages and unexplained missing funds resulting from the financial audit conducted on the books and accounts of the Municipal Trial Court in Cities (MTCC) of Biñan City in Laguna to determine the final accountabilities of respondent Clerk of Court II Dahlia E. Borromeo.

The relevant antecedents follow.

Pursuant to the resolution promulgated on July 26, 2001 in A.M. No. 01-4-134-MTC, the Court Administrator organized an audit team, and directed the Financial Management Office (FMO) to withhold all the salaries and allowances of the respondent following her failure, despite repeated demands, to submit the records required for the examination of her books of accounts to the Fiscal Monitoring Division of the Court Management Office (FMD CMO) in the Office of the Court Administrator (OCA).¹

The initial audit conducted on the cash and accounts of the MTCC during the period from August 10, 2001 to August 14, 2001 resulted in the following observations and findings, to wit:

A. JUDICIARY DEVELOPMENT FUND Period Covered: 1 April 1995 to 31 August 2001
Total Collections Less: Total Deposits/Remittances Balance of Accountabilities/Shortages	P719,450.20 381,935.90 P337,514.30
B. CLERK OF COURT GENERAL FUND Period Covered: 1 August 1994 to 31 August 2001
Total Collections Less: Total Deposits/Remittances Balance of Accountabilities/Shortages	P 625,776.65 360,258.15 P 265,518.50

The general observations of the team who conducted the financial audit were as follows:

1. Records and accounting control are in disarray. Ms. Borromeo has no procedure at all in the manner of filing system, accounting system and delegation of work;

2. Official Receipts requisitioned from the Supreme Court are properly issued on legal fees collections. However, two (2) booklets of Official Receipts with Serial Nos. 5710301-350 and 5710351-400 issued for Fiduciary Collections are missing. Collections on Judiciary Development Fund, Clerk of Court General Fund and Fiduciary Fund for the period 21 June 2001 to the present, 30 June 2001 to the present and 1 May 2001 to the present, respectively are not recorded in their respective Official cashbooks;

3. The last Monthly Report of Collections and Deposits/Withdrawals submitted by Ms. Borromeo to the Accounting Division, this Office, on Judiciary Development Fund, Clerk of Court General Fund and Fiduciary Fund was for the months of August 1999, June 1999 and May 1999 only;

4. Ms. Borromeo failed to remit her collections on Judiciary Development Fund for the period covering October 1999 to August 2001 (collections for a period of 1 year and 11 months) amounting to Three Hundred Thirty Seven Thousand Five Hundred Fourteen Pesos and 30/100 Centavos (P337,514.30). Furthermore, most of the collections prior to October 1999 were not remitted on time in violation of Administrative Circular No. 3-2000 dated 15 June 2001;

5. Ms. Borromeo in like manner failed to remit her collections on Clerk of Court General Fund for the period covering November 1999 to August 2001 (collections for a period of 1 year and 10 months) amounting to Two Hundred Sixty Five Thousand Five Hundred Eighteen Pesos and 50/100 Centavos (P265,518.50). Furthermore, most of the collections prior to November 1999 were also not remitted on time in violation of the Commission on Audit (COA) and Department of Finance (DOF) Joint Circular 1-81;

6. Collections on Fiduciary Fund were not deposited for safekeeping in the Land Bank of the Philippines (LBP) pursuant to the guidelines set forth in Administrative Circular No. 50-95 dated 11 October 1995. On 5 July 2000, she made a deposit under LBP Savings Account No. 2381-0002-25 in the amount of Twenty Six Thousand Pesos (P26,000.00). All subsequent fiduciary fund collections were held on hand except for the last deposit made on 9 August 2001 in the amount of Five Thousand Pesos (P5,000.00) but withdrawals from the bank continued until August 2001, showing irregular transactions conducted under this account; and

7. Ms. Borromeo allowed Ms. Cecil Reyes, her purported private secretary, to perform the duties and responsibilities of a regular court employee.²

As a result, the Court resolved on February 18, 2002 to:

(a) DIRECT Clerk of Court Dahlia E. Borromeo to: (1) EXPLAIN within ten (10) days from notice why no administrative sanction shall be imposed upon her for her failure to: (aa) remit all collection for the period covering October 1999 to August 2001 on the Judiciary Development Fund and on CoC General Fund for the period covering November 1999 to August 2001; (bb) record daily transactions in the official cashbooks; (cc) submit the monthly reports of collections and deposits/withdrawals for all funds to the Accounting Division, Office of the Court Administrator from the mid of 1999 to present; (dd) deposit all fiduciary fund collections with the Land Bank of the Philippines; and (ee) follow the circulars issued by the Court in the manner of handling judiciary funds; (2) RESTITUTE within ten (10) days from notice, the shortages on JDF and CoC General Fund in the amount of Three Hundred Thirty Seven Thousand Five Hundred Fourteen Pesos and 30/100 Centavos (P337,514.30) and Two Hundred Sixty Five Thousand Five Hundred Eighteen Pesos and 50/100 Centavos (P265,518.50), respectively; (3) EXPLAIN why she is allowing Ms. Cecil Reyes, who is not an employee of the court to have access to the records of the court and to perform the regular functions of a court employee; and (4) PRODUCE all Fiduciary Fund records from July 1995 to present, i.e., Monthly Reports of Collections and Deposits/Withdrawals, Cashbooks, all Bank Passbooks [PNB, LBP or Rural Bank] and two (2) unaccounted booklets of OR No. 5710301-350 and 5710351-400;

(b) SUSPEND Ms. Dahlia E. Borromeo from office until she has complied with all the above directives; and

(c) DIRECT Judge Alden V. Cervantes, Presiding Judge, MTC, Biñan, Laguna to: (1) DESIGNATE an Acting Clerk of Court during the period of suspension of Mrs. Borromeo; and (2) MONITOR the designated Officer-in-Charge to safeguard the judiciary funds to avoid similar infractions in the future.

x x x x³

Following her preventive suspension as directed via the February 18, 2002 resolution, the respondent submitted her explanation through her letter dated February 25, 2002.⁴ On March 5, 2002, she also presented her Supplemental Motion for Reconsideration dated March 4, 2002⁵ asking for the lifting of her suspension.

On April 1, 2002, the Court referred the matter to the OCA for evaluation, report and recommendation.⁶

On June 1 7, 2002, the Court promulgated its resolution to:

(a)	HOLD in ABEYANCE the final resolution of this administrative matter pending compliance of Ms. Dahlia E. Borromeo, Clerk of Court, MTC, Biñan, Laguna, of all the directives in this administrative matter;
(b)	DIRECT Judge Alden V. Cervantes, Presiding Judge, MTC, Biñan, Laguna, to ALLOW MY. Dahlia E. Borromeo to have access to all records and relevant papers pertaining to all collections on Judiciary Development Fund, CoC General Fund and Fiduciary Fund during her incumbency as CoC/Accountable Officer, provided that she be accompanied by a trusted court employee to avoid suspicion of tampering of court records;
(c)	GRANT Ms. Borromeo a period of thirty (30) days from notice hereof to fully comply with the resolution of February 18, 2002; and
(d)	DENY the request of Ms. Borromeo for the lifting of her suspension order and the release of her salaries and other benefits.7

On July 29, 2002, the respondent manifested her partial compliance with the resolution of February 18, 2002 directing her, among others, "to submit monthly reports of collections and deposits/withdrawals for all funds to the Accounting Division, from the middle of 1999 to present." She also requested an extension of 60 days to comply with all the other directives.⁸

On January 15, 2003, the Court noted the respondent's letter of July 29, 2002, and granted her request for an additional 60 days within which to comply with the resolution of February 18, 2002 in view of the reasons she had stated therein. ⁹

However, the respondent's continued non-compliance with the directives of the Court in the February 18, 2002 resolution prompted the Court to order the conduct of the financial audit subject of this administrative matter.

The results of the financial audit showed that the respondent had incurred the following accountabilities and shortages,¹⁰ to wit:

FUND/ACCOUNT NAME	PERIOD/S AUDITED	BALANCE OF ACCOUNTABILITY- SHORTAGE/ ( OVERAGE )
Fiduciary Fund	5 July 1995 to 31 January 2002	P2,869,873.49
Judiciary Development Fund	1 April 1995 to 31 August 2001	337,514.30
General Fund (Old)	1 August 1994 to 31 August 2001	265,518.50
Judiciary Development Fund	1 September 2001 to 31 January 2002	Not established due to unavailability of vital documents
General Fund (Old)	1 September 2001 to 31 January 2002	Not established due to unavailability of vital documents

On February 3, 2015, the OCA issued a memorandum,¹¹ recommending therein the following:

1. This report be RE-DOCKETED as a regular administrative complaint against Ms. Dahlia E. Borromeo, Clerk of Court II, MTCC, Biñan, Laguna and that Ms. Dahlia E. Borromeo be found GUILTY of violation of Administrative Circular No. 32-93 (Re: Collection of Legal Fees and Submission of Monthly Report of Collections) as amended by Administrative Circular No. 3-2000 and Administrative Circular 50-95, gross dishonesty and malversation of public funds (Articles 217, Revised Penal Code) and be DISMISSED from the service effective immediately, with forfeiture of all retirement benefits except her accrued leave credits, and with prejudice to re-employment in any branch or service of the government, including government-owned or controlled corporations;
   
   
2. The position of Ms. Dahlia E. Borromeo as Clerk of Court II, MTCC, Biñan, Laguna be DECLARED VACANT;
   
   
3. The OAS, OCA be DIRECTED to provide the FMO, OCA with the following documents pertaining to Ms. Dahlia E. Borromeo:

[3.1] Official Service Record;
[3.2] Certification of Leave Credits; and
[3.3] Notice of Salary Adjustment (NOSA) if any;

4. The FMO, OCA be DIRECTED to:

4.1)	PROCESS the money value of the terminal leave benefits of Ms. Dahlia E. Borromeo and that of her withheld salaries, bonuses and other benefits, if any, dispensing with the usual documentary requirements, and apply the same to the shortages in the following order:
	Name of Fund Period Covered Amount Fiduciary Fund 5 July 1995 to 31 January 2002 P 2,869,873.49 Judiciary Development Fund 1 April 1995 to 31 August 2001 337,514.30 General Fund 1 August 1994 to 31 August 2001 265,518.50 Total P3,472,906.29
4.2)	COORDINATE with the FMD, CMO, OCA, before the processing of the checks to be issued in favor of the Fiduciary Fund account of the MTCC, Biñan, Laguna, and for the preparation of the necessary communication with the incumbent Clerk of Court/Officer-in-Charge thereat;

5. ORDER Ms. Borromeo to restitute the remaining shortages, the monetary value of her earned leave credits and withheld salaries, bonuses and other benefits being insufficient to cover the aforementioned shortages;
   
   
6. x x x
   
   
7. Hon. Maria Conception M. Serrano-Altea, Presiding Judge, MTCC, Biñan, Laguna be DIRECTED to assign a court personnel to assist Ms. Mercidita Yncierto-Wahid in handling financial transactions, particularly the recording in the cashbook and/or preparation of Monthly Report of Collections and Deposits/Withdrawals, of which personnel can also be entrusted in the issuance of receipts and proper assessment of filing fees. This is to foster better and effective accounting control and check and balance; and
   
   
8. The Legal Office, OCA, be DIRECTED to file the appropriate criminal charges against Ms. Dahlia E. Borromeo.¹²

Ruling of the Court

After a judicious review of the records of the case, the Court adopts and approves the recommendations of the OCA.

The respondent was the Clerk of Court of the MTCC in Biñan City in Laguna. She was the custodian and officer responsible for the safekeeping and custody of the funds, revenues, properties and premises of the court she served. She was clearly bound to perform the duty and responsibility to the utmost of her abilities. In Re: Report on the Financial Audit Conducted at the Municipal Trial Court, Baliuag, Bulacan,¹³ the Court stressed the vitality of the role and office of the Clerk of Court in the discharge by the Judiciary of its primary responsibility in the administration of justice, to wit:

Clerks of Court perform a delicate function as designated custodians of the court's funds, revenues, records, properties, and premises. As such, they are generally regarded as treasurer, accountant, guard, and physical plant manager thereof. It is the duty of the Clerks of Court to faithfully perform their duties and responsibilities. They are the chief administrative officers of their respective courts. It is also their duty to ensure that the proper procedures are followed in the collection of cash bonds. Clerks of Court are officers of the law who perform vital functions in the prompt and sound administration of justice. Thus, an unwarranted failure to fulfil these responsibilities deserves administrative sanctions and not even the full payment of the collection shortages will exempt the accountable officer from liability.

But the respondent did not faithfully perform and discharge her duty and responsibility as the Clerk of Court of the MTCC of being the custodian of the funds, revenues, properties and premises of the court she served. Her attempt to explain herself by claiming that she had been confronted with various circumstances that had rendered her unable to faithfully comply with her duties, such as the absence of a permanent judge in her court that had led to the piling up of her workload, a series of office transfers that had caused the loss of some receipts, and the financial difficulties that her family had experience was vain and futile. Compounding her situation was that despite committing to submit her reports and the receipts for the cashbonds withdrawn from the Fiduciary Fund, she did not submit anything to the OCA in direct disobedience to the directives of the Court issued through the resolution promulgated on February 18, 2002, and did not also restitute restituted the shortage of her cash collections.

The respondent's failure to remit her cash collections and to submit her monthly financial reports constituted gross dishonesty and grave misconduct. She was also administratively liable for gross neglect of duty. As the Court made clear in Office of the Court Administrator v. Dequito,¹⁴viz.:

Gross neglect of duty refers to negligence characterized by the glaring want of care; by acting or omitting to act in a situation where there is a duty to act, not inadvertently, but willfully and intentionally; or by acting with a conscious indifference to consequences with respect to other persons who may be affected. In contrast, simple neglect of duty only refers to the failure to give proper attention to a required task or a disregard of duty due to carelessness or indifference.

The safeguarding of funds and collection, and the submission of monthly collection reports are essential to the orderly administration of justice. In this light, Supreme Court (SC) Circular No. 13-92 mandates clerks of courts to immediately deposit fiduciary funds with the authorized government depository banks, specifically the Land Bank of the Philippines (LBP). Moreover, SC Circular No. 32-93 requires all clerks of court or accountable officers to submit a monthly report of collections for all funds not later than the tenth (10^th) day of each succeeding month.

A clerk of court is the custodian of court funds. Hence, he is liable for any loss, shortage, destruction or impairment of these funds. Any shortage in the amounts to be remitted, as well as the delay in the actual remittance of these funds constitutes Gross Neglect of Duty of a clerk of court. The Court has also ruled that a clerk of court who fails to timely deposit judiciary collections, as well as to submit monthly financial reports, is administratively liable for Gross Neglect of Duty.

Under Section 52 of the Revised Uniform Rules on Administrative Cases in the Civil Service, dishonesty, grave misconduct and gross neglect of duty are classified as grave offenses, and any of said offenses can merit dismissal from the service even upon the first commission.¹⁵

For her failure to live up to the high ethical standards expected of her as a court employee and accountable officer, the respondent's dismissal from the service with forfeiture of all retirement benefits, excluding accrued leave credits, with prejudice to re-employment in any government office, including government-owned and government-controlled corporations is in order and fully warranted.

WHEREFORE, the Court RESOLVES to:

1. DISMISS respondent DAHLIA E. BORROMEO from the service with forfeiture of all retirement benefits, excluding accrued leave credits, with prejudice to re-employment in any government office, including government-owned and government-controlled corporations;

2. DIRECT the Leave Division, Office of the Administrative Services, Office of the Court Administrator to compute the accrued leave credits of respondent DAHLIA E. BORROMEO, and forward the computation to the Financial Management Office, Office of the Court Administrator, for disposition in accordance with this decision;

3. ORDER the Financial Management Office, Office of the Court Administrator, to apply the monetary value of the accrued leave credits of respondent DAHLIA E. BORROMEO, and the salaries withheld from her to the cash shortage incurred, as follows:

Name of Fund	Period Covered	Amount
Fiduciary Fund	5 July 1995 to 31 January 2002	P 2,869,873.49
Judiciary Development Fund	1 April 1995 to 31 August 2001	337,514.30
General Fund	1 August 1994 to 31 August 2001	265,518.50
Total		P3,472,906.29

Should any balance remain unpaid despite the application of the monetary value of her accrued leave credits and withheld salaries respondent DAHLIA E. BORROMEO shall remain personally liable therefor; and

4. INSTRUCT the Office of the Court Administrator to initiate, if warranted, the appropriate criminal charges against respondent DAHLIA E. BORROMEO.

SO ORDERED.

Leonardo-De Castro (C.J.), Peralta, Bersamin, Del Castillo, Perlas-Bernabe, Leonen, Jardeleza, Caguioa, Tijam, A. Reyes, Jr., Gesmundo, and J. Reyes, Jr., JJ., concur.
Carpio, J., on wellness leave.

NOTICE OF JUDGMENT

Sirs/Mesdames:

Please take notice that on September 18, 2018 a Decision, copy attached herewith, was rendered by the Supreme Court in the above-entitled administrative matter, the original of which was received by this Office on October 12, 2018 at 3:00 p.m.

Endnotes:

¹Rollo, p. 175.

² Id. at 175-177.

³ Id. at 8-9.

⁴ Id. at 13-14.

⁵ Id. at 152.

⁶ Id. at 153.

⁷ Id. at 178-179.

⁸ Id.

⁹ Id.

¹⁰ Id. at 186-187.

¹¹ Id. at 175-194.

¹² Id. at 193-194.

¹³ A.M. No. P-15-3298 February 4, 2015, 749 SCRA 495, 501.

¹⁴ A.M. No. P-15-3386, November 15, 2016, 809 SCRA 1, 11-12.

¹⁵Office of the Court Administrator v. Leal, A.M. No. P-12-3047, October 1, 2013, 706 SCRA 487, 498.