REPORT OF JUSTICE FELIPE B. KALALO,
Regional Coordinator,
J.P.D.I.O. ON THE AUDIT CONDUCTED IN
THE COURTS OF RIZAL PROVINCE

Justice Kalalo found several irregularities particularly with regard to the entry and remittance of Judiciary Development Fund [JDF] and Fiduciary Fund collections. This Court's Resolution of January 21, 1997 disposed as follows:

IN VIEW WHEREOF, we hereby order that:

1. An immediate audit, examination and reconciliation of the JDF collections, deposits and remittances be conducted by the Fiscal Audit Division, Office of the Court Administrator in the following courts:
 

a. Regional Trial Court, Binangonan, Rizal;

b. Municipal Trial Court, Cardona, Rizal;

c. Municipal Trial Court of Pililla-Jala-Jala.

and for said office to submit its report, findings and recommendations within fifteen (15) days.

2. Mrs. Ermelina C. Bernardino, Clerk of Court of the Municipal Trial Court of Cardona, Mrs. Libertad San Juan, Clerk of Court of the Municipal Circuit Trial Court of Pililla-Jala-Jala, Atty. Manuel I. Banting, Clerk of Court of the Regional Trial Court of Binangonan, and Ma. Luisa Tuazon, cash clerk at the Regional Trial Court of Binangonan are immediately relieved from their respective duties and temporarily replaced by other competent court personnel to be recommended by the Court Administrator pending the results of the audit to be conducted by the FMBO;

3. Atty. Myrna Directo, Clerk of Court of the Regional Trial Court of Morong and Deputy Sheriff Restituto Soriano, officer-in-charge of said court, are required to explain why they have been depositing the JDF collection in a private band and to account for the interest earned by such deposit within ten (10) days from receipt of this resolution;

4. Cesar Clamar, officer-in-charge of the Office of the Clerk of Court of the Municipal Trial Court of Taytay is advised to use the prescribed JDF cash book and to update the entries therein within ten (10) days from receipt of this resolution.

5. Administrative charges be immediately filed by the Office of the Court Administrator against Mrs. Ermelina C. Bernardino, Mrs. Libertad San Juan, Atty. Manuel I. Banting, Ma. Luisa Tuazon, Atty. Myrna Directo, Deputy Sheriff Restituto Soriano, and all other court personnel involved in the irregularities concerning the collection and remittance of JDF in their respective courts. They are hereby placed under preventive suspension without pay pending the result of the respective administrative complaints.

6. Presiding Judge Ricardo P. Angeles of the Municipal Circuit Trial Court of Teresa-Baras is required to explain within ten (10) days from receipt of this resolution his failure to decide within the reglementary period of ninety (90) days the cases long submitted for decision.[2]

The audit conducted in the MTC, Cardona, Rizal by the Fiscal Audit Division, Office of the Court Administrator was for the period ending October 31, 1995. Mrs. Ermelita C. Bernardino was appointed Clerk of Court II of said court on March 1, 1995.

The audit team found that the last JDF collection remitted on January 15, 1995 in the amount of P800.00 and reported by Justice Kalalo as collection for December 1994 represents the collection for November 1994 in the sum of P237.50 and December 1994 in the sum of P652.50. These amounts were deposited with the Land Bank of the Philippines (LBP) under the name of the court.

JDF collections amounting to P36,441.50 from January 1995 to July 1996, for a period of nineteen (19) months were remitted to the Supreme Court Cashier's Division[9] on September 30, 1996. JDF collections for September and October 1996 in the amounts of P40.00 and P600.00 were deposited with the LBP on October 10, 1996 and November 6, 1996, respectively.

Prior to January 1996, collections for the General Fund were made by the municipal government pursuant to Section 93 of the Judiciary Act of 1948. From January 1996 to December 1996, General Fund collections were remitted tothe Supreme Court Cashier's Division on September 30, 1996,[10] on October 9, 1996,[11] and on November 7, 1996.[12]

Collections for the Fiduciary Fund started in July 1994. The collections were deposited with the LBP, Binangonan, Rizal Branch. As of October 1996, a balance of P79,700.00 was verified to be deposited with said bank in the name of the MTC, Cardona, Rizal.
 

The audit conducted in the MCTC, Pililia-Jala-Jala, Rizal covered the period from September 1993 to October 1996. Mrs. Erna Casas was the Officer-in-Charge of cash accountabilities of said court from September 1, 1993 to February 1995. Clerk of Court Libertad San Juan, who was appointed Clerk of Court II, took over on March 1, 1995.

The last JDF remittance of P4,937.00 made in March 1995 as stated in Justice Kalalo's Report represents collections for February 1995. For a period of eighteen (18) month, from March 1995 to August 1996, the total JDF collection deposited with the LBP was P39,519.50. JDF collections for September 1996 and October 1996 were likewise deposited with the LBP on October 2, 1996 and November 15, 1996, respectively. The collections were deposited under the JDF Savings Account.

Collections for the General Fund from September 1993 to September 1996 were erroneously incorporated with the collections for the JDF. This explains the large collection reflected in the JDF which is unusual for an MCTC. This error was, however, corrected in September 1996. General Fund collections P23,965.00 for the month of October 1996 representing interest on Fiduciary Fund Collections were deposited with the LBP on October 16, 1996.

The balance of the Fiduciary Fund collection covering the period of October 1993 to October 1996 in the total amount of P280,645.00 was found deposited with the LBP, Tanay Branch in the name of the MCTC, Pililia-Jala-Jala.

Despite the subsequent compliance with the Circulars, Mrs. Bernardino, Clerk of Court II, Cardona, Rizal and Mrs. San Juan, Clerk of Court II, MCTC, Pililia-Jala-Jala, Rizal were found by the audit team to have essentially failed to observe the circulars issued by this Court and the Court Administrator in connection with their duties and responsibilities as accountable officers.
 

The incumbent Clerk of Court of the RTC, Binangonan, Rizal is Atty. Manuel I. Banting. The actual collection of fees and the recording of transactions are performed by Mrs. Ma. Luisa Tuazon, Clerk III in the Office of the Clerk of Court, same court.

The team audited the JDF collections over a period of eleven (11) years and ten (10) months, i.e., from February 1988 to December 1996. The JDF collections from February 1985 to December 1994, a period of 9 years and 9 months, were remitted and accounted for. The depository bank for the amounts collected until March 1994 was the PNB Ortigas branch and for the amounts collected from April 1994 to October 1994 was the PNB Cainta branch. The LBP became the depository bank in January 1996.

An examination of the cash books of the court showed that there were no JDF collections or remittances for the months of November and December 1994. Remittances were made from January 1995 to December 1996 but these were irregular resulting in an under remittance of P106,311.68.
The audit of the Fiduciary Fund was made from February 1984 to December 1995 only since no records for collections, deposits and withdrawals were presented for the whole year of 1996. The audit was made on file copies of monthly reports because no cash books were maintained. Monthly reports submitted to the Accounting Division of the Supreme Court were based on duplicates of official receipts instead of entries from the cash books. As gleaned from available documents, the balance of the Fiduciary Fund as of December 1995 should have been P990,452.80. Considering that no cash books were used where the running balance of the Fiduciary Fund may be determined at the beginning and ending of each monthly transactions, the said balance of P990,452.80 cannot be verified. Moreover, no passbook indicating all the deposits and withdrawals of the court was presented to the audit team.

The Clerk of Court's General Fund and the Sheriff's General Fund were audited for a period of twelve [12] years, from January 1984 up to December 1996. Remittances of the collection were irregular in the years 1994, 1995 and 1996. The audit team tentatively estimated unremitted collections for the Clerk of Court's General Fund at P99,314.93 while that of the Sheriff's General Fund at P46,038.97. These amounts may, however, be adjusted upon presentation of receipts and other proofs of remittances and payment.

The audit team recommended that Atty. Banting be made to explain and account for the following shortages:

1. Judiciary Development Fund P106,311.682. Fiduciary Fund 990,451.803. Clerk of Court General Fund 99,314.834. Sheriff's General Fund 46,038.97    P1,242,117.38

Atty. Myrna C. Directo, Clerk of Court IV, RTC, Morong, Rizal and Deputy Sheriff Restituto B. Soriano, same court, filed their Compliance and Explanation in accordance with this Court's January 21, 1997 Resolution. At the time of Justice Kalalo's audit, Atty. Directo was an official leave of absence and Deputy Sheriff Soriano was the Officer-in-Charge of the court's cash accountabilities.

Atty. Directo and Deputy Sheriff Soriano claimed that their failure to deposit all judiciary collections with the LBP was because there was no LBP branch in Morong, Rizal; that the absence of an LBP branch, Supreme Court Circular No. 8A-93 dated April 21, 1993 authorized the deposit of all collections with the rural bank in the area; that the Rural Bank of Morong, Rizal is a stone's throw away from the courthouse and this proximity ensures the convenience and safety of depositing daily collections; that the daily deposits with the rural bank were remitted regularly every month with the LBP, Tanay Branch which is approximately ten [10] kilometers away from the court.

As regards the accounting of earned interest on JDF and other court collections, Atty. Directo and Deputy Sheriff Soriano submitted photocopiesof all the passbooks in the name of the RTC with the Rural Bank of Morong, Rizal.[13] The entries in the passbooks indicate that the interest on the collections from April 1994 to December 1996 were not withdrawn but incorporated with the total balance of the account. The interest was excluded and left in the bank allegedly to keep the account active after the principal sums were remitted to the LBP, Tanay Branch every month.

Atty. Directo and Deputy Sheriff Soriano claimed that they did not commit any act questionable and inimical to the interest of the Supreme Court and thus prayed that they be excluded from the administrative charges filed and that their preventive suspension without pay be lifted. As a sign of good faith, Atty. Directo later informed this Court that starting June 4, 1996, all JDF collections of the court were deposited with the LBP as evidenced by copies of the deposit slips.[14]

Circular No. 8A-93 issued by then Court Administrator Ernani Cruz-Pano on April 21, 1993 and cited by Atty. Directo applies to Fiduciary Fund collections. Fiduciary collections are derived from bail bonds, rental deposits,etc.[15] and are held in trust by the court for the litigants. JDF collections are derived from legal fees and are intended to benefit the members and personnel of the Judiciary.[16]

JDF collections are governed by Administrative Circular No. 5-93[17] dated April 30, 1993 which provides that:

4. xxx

The income or interest earned [on the JDF] shall likewise form part of the Fund; for this purpose, the depository bank for the Fund shall be the Land Bank of the Philippines

5. System and Procedures:

xxx   xxx   xxx

(c) In the RTC, SDC, MetTC, MTCC, MTC, MCTC and SCC.  The daily collections for the Fund in these courts shall be deposited every day with the local or nearest LBP Branch "For the account of the Judiciary Development Fund, Supreme Court, Manila  SAVINGS ACCOUNT NO. 159-01163-1; or if depositing daily is not possible, deposits for the Fund shall be very second and third Fridays and at the end of every month, provided, however, that whenever collections for the Fund reach P500.00 the same shall be deposited immediately even before the days before indicated.

Where there is no LBP branch at the station of the judge concerned, the collections shall be sent by postal money order payable to the Chief Accountant of the Supreme Court, at the latest before 3:00 P.M. of that particular week.

xxx   xxx   xxx

Since the JDF pertains to the Judiciary, JDF collections include the income or interest earned from the Fund. The collections are to be deposited daily or three times a month as the case may be with the LBP branch at the station of the judge concerned. If there is no LBP branch, the collections shall be sent by postal money order to the Chief Accountant of the Supreme Court.

Even Circular No. 8A-93 on Fiduciary Funds cited by Atty. Directo to justify her actions does not ipso facto authorize the deposit of Fiduciary Fund collections with the rural bank. Thus:

Effective March 1, 1993, all Clerks of Court of lower Courts are hereby DIRECTED to deposit all collections from bailbonds, rental deposit and other fiduciary collections, upon receipt thereof, following the same guidelines laid down in Circular No. 13-92 of this Court dated March 1, 1992, with the LAND BANK OF THE PHILIPPINES [LBP], the authorized government depository bank for the Judiciary.

In localities where the LBP has no branches, the Clerk of Court shall deposit all collections with any Rural Bank in the area furnishing the ACCOUNTING DIVISION, SUPREME COURT, [of] the selected Rural Bank.

Where there is no LBP branch at the station of the judge concerned, the collections shall be sent by postal money order payable to the Chief Accountant of the Supreme Court, at the latest before 3:00 P.M. of that particular week.

xxx   xxx   xxx

Court Fiduciary collections where no LBP branch is found at the court's station should be sent by postal money order to the Chief Accountant of the Supreme Court. It is only where no LBP branches can be found in the court's locality that the Clerk of Court may deposit the fiduciary collections with the rural bank in the area and subsequently inform the Supreme Court thereof.

(5) Interest earned on the deposits and any forfeited amounts shall accrue to the general fund of the national government. Within two (2) weeks after the end of each quarter, the Clerk of Court shall withdraw such interest and forfeited amounts and shall remit the same to the National Treasury under a separate remittance advice, duplicate copy thereof to be furnished the Chief Accountant of the Supreme Court for record and control purposes.

xxx   xxx   xxx

(8) In localities where there are no branches of the LBP, fiduciary collections shall be deposited by the Clerk of Court with the Provincial, City or Municipal Treasurer.

xxx   xxx   xxx

Moreover, the interest on the JDF and Fiduciary Fund collections should not have been left with the Rural Bank of Morong. The interest on JDF collections form part of the JDF which should be remitted to the Supreme Court. The interest on Fiduciary Fund collections accrue to the General Fund of the National Government and should be remitted to the National Treasury. If Atty. Directo and Deputy Sheriff Soriano deposited the collections with the LBP, the official depository bank of the judiciary, there would have been no need to leave the interest if only to ensure the non-closure of the court's account.
 

Judge Ricardo P. Angeles of the MCTC, Teresa-Baras filed his Explanation stating that the delay in the disposition of cases submitted to him for decision was due to the additional workload that came with his designation as Acting Judge, MCTC, Pililia-Jala-Jala from 1995 to the present; that he had been exerting utmost effort in disposing the cases and promised to do so within the shortest possible time.

Rule 3.05 of Canon 3 of the Code of Judicial Conduct admonishes all judges to dispose of the court's business promptly and decide cases within the period fixed by law. The failure to render a decision within the ninety-day period from submission of the case constitutes serious misconduct in derogation of the speedy administration of justice.[18] The additional assignment of Judge Angeles should not have deterred him from disposing off the twenty-two criminal cases pending before him. All he had to do was to request from this Court a reasonable extension of time to resolve the cases.[19]

IN VIEW WHEREOF, this Court adopts the findings of the Office of the Court Administrator and orders that:

(1) the Audit Report dated February 20, 1997 of the Fiscal Audit Division with respect to the MTC, Cardona, Rizal and the MCTC, Pililla-Jala-Jala, Rizal and the RTC, Binangonan, Rizal, as well as the Explanation of Judge Ricardo Angeles be NOTED;

(2) the Reports dated August 9, 1996 and August 14, 1996 of Justice Felipe B. Kalalo and the Audit Report dated February 20, 1997 and April 8, 1997 of the Fiscal Audit Division, Office of the Court Administrator shall be treated as administrative complaints against Mrs. Ermelina C. Bernardino, Clerk of Court, MTC, Cardona, Rizal, Mrs. Libertad San Juan, Clerk of Court, MCTC, Pililia-Jala-Jala, Rizal, Atty. Manuel I. Banting, Clerk of Court, RTC, Binangonan, Rizal, and Ma. Luisa Tuazon, clerk, RTC, Binangonan, Rizal for which reason all said respondents are required to submit their comments thereon within ten days from receipt of this order; and

(3) For failure to comply with Administrative Circular No. 5-93 and Circulars Nos. 8A-93 and 50-95, Atty. Myrna Directo and Deputy Sheriff Restituto B. Soriano are fined the amount of P5,000.00 and P2,000.00 respectively, to be paid within five (5) days from notice. A repetition of the same act shall be dealt with severely;

(3.a) the orders of suspension against Atty. Directo and Deputy Sheriff Soriano are lifted, and the Resolution of January 21, 1997 relative to the filing of charges against Atty. Directo and Deputy Sheriff Soriano is set aside;

(4) Judge Ricardo Angeles, MCTC, Teresa-Baras is reprimanded for failure to decide within the reglementary period the twenty-two criminal cases pending before him with a warning that a repetition of the same offense shall be dealt with more severely.

Narvasa, C.J. and Mendoza, J., is on leave.
Regalado, Davide, Jr., Romero, Bellosillo, Melo, Vitug, Kapunan, Francisco, Panganiban and Martinez, JJ., concur.
 

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Endnotes