SANDIGANBA VAN - Office of the Ombudsman SB Decisions/SB-16...Pp vs. Felipe G. Picazo,et.al., Page11...

REPUBLIC OF THE PHILIPPINES

SANDIGANBA VANQuezon City

FIRST DIVISION

PEOPLE OF THE PHILIPPINES,Plaintiff,

-versus- Crim. Case No. SB-16-CRM-0630For: Violation of Section 3 (e),

Republic Act No. 3019

FELlPE G. PICAZO,VIRGINIA C. LAROCO,EVANGELlNA T. FLORES,

Accused.Present:

DE LA CRUZ, J., ChairpersonECONG, J. andCALDONA, J.

Promulgated: 11NOV 19 1019 er

x-------------------------------------------------------------------------f---------------x

DECISION

CALDONA, J.:

The accused, Felipe G. Picazo, Virginia C. Laroco, Evangelina

T. Flores, stand charged with the crime of violation of Section 3 (e) of

Republic Act No. 3019, as amended, otherwise known as the Anti-

Graft and Corrupt Practices Act, under the following information:

That in the year 2009, or sometime prior or subsequentthereto, in the City of San Fernando, Province of La Union,Philippines, and within the jurisdiction of this Honorable

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Court, accused Felipe G. Picazo, Virginia C. Laroco,Evangelina T. Flares, all public officers, being the GeneralManager, Administrative Division Manager, and Cashier,respectively, of Metro La Union Water District (MLUWD), agovernment-owned or controlled corporation with originalcharter, committing the crime herein charged in relation totheir office and taking advantage of their official positions,conspiring, confederating and mutually helping each other,acting with manifest partiality, evident bad faith, and/or grossinexcusable negligence, did then and there, willfully,unlawfully and criminally give unwarranted benefits,advantage and preference to selected employees of theMLUWD which included themselves, by paying out 231checks in the names of said employees, even withunaccomplished or no disbursement vouchers and/orsupporting documents, in the aggregate amount ofP7,246,760.28, in wanton disregard of the prescribeddisbursement process pursuant to accounting and auditingrules, to the damage and prejudice of the government.

CONTRARY TO LAW.

Upon being arraigned, the three (3) accused, assisted by

counsel, entered the plea of "Not guilty" to the offense for which they

stand charged.

During the pre-trial conference, the prosecution and the defense

entered into stipulations on certain facts which are embodied in the

Pre-trial Order' dated November 10, 2017 and quoted hereunder for

ready reference, to wit:

1. That the accused were holding the following positions at theMetro La Union Water District (MLUWD) at the time material tothis case:

a. Felipe G. Picazo- General Managerb. Virginia C. Laroco- Manager, Administrative Division, andc. Evangelina T. Flores- Cashier

2. That administrative cases for gross neglect of duty, gravemisconduct and conduct prejudicial to the best interest of theservice, were filed against accused Virginia C. Laroco and

"Records, Volume 11,pp. 201-210. Item No. 12 of the stipulated facts is basically a restatement ofItems Nos. 2 and 3 of the Pre-Trial Order.

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Evangelina T. Flores, in relation to their acts of issuing/disbursingthe same checks, subject of this case;

3. That in administrative cases cited above, the Civil ServiceCommission found the accused guilty thereof and meted themthe penalty of DISMISSAL from the service including theaccessory penalties of cancellation of Civil Service eligibility,forfeiture of retirement benefits and perpetual disqualificationfrom reemployment in the government service, in a decisionpromulgated on August 2, 2011;

4. That in the same administrative cases cited above, the Chairmanof the Board of Metro La Union Water District found accusedPicazo guilty of Grave Misconduct and Gross Neglect of Duty andwas meted the penalty of dismissal from the service, togetherwith the accessory penalties thereof pursuant to Sections 57 and58, Rule IV (Penalties) of the Uniform Rules on AdministrativeCases in the Civil Service, in a decision dated 5 October 2010;

5. That as General Manager of MLUWD, Felipe G. Picazo signedall the checks, subject matter of this case;

6. That Virginia C. Laroco, as Manager, Administrative Division ofMLUWD, and in her absence, Evangelina T. Flores, as Cashierof the MLUWD, also signed some of the checks, subject matterof this case; (as to its existence with respect to accused Flores)

7. That all the checks, subject of this case, were encashed with thePhilippine National Bank;

8. That on January 06, 2010, the Commission on Audit issuedNotice of Suspension No. 10-001-101-(09) to the MLUWD.

9. The identity of the parties;

10. That the parties have the capacity to sue and be sued;

11. That the accused were employees of the Metro La Union WaterDistrict (MLUWD) prior to the filing of the instant case, Felipe G.Picazo as General Manager; Virginia C. Laroco as Manager,Administrative Division; and Evangelina T. Flores as Cashier;

x x x

13. That in March, 2010, the Audit Team of Leticia V. Hufano andCecilia G. Ancheta, State Auditor IV-ATL and State Auditor 5,conducted an audit on the accounts and transactions of MLUWDfor the CY 2009;

14.That on March 8, 2010, the said Audit Team issued Notice ofDisallowances (NO) No. 10-001-501 (09), No. 10-002-501 (09),10-003-501(09), 10-004-501(09), 10-005-501(09), and 10-006-501 (09);


15. That another Administrative Case for Grave Misconduct was filedon November 8, 2011 by Mariano Chan against the three (3)accused in this instant case. But it was DISMISSED by theDeputy Ombudsman for Luzon based on the doctrine ofconcurrent jurisdiction with the Civil Service Commission.

Thereafter, trial on the merits ensued.

The witnesses for the prosecution during the presentation of

evidence in chief were Lovie A. Jadormeo and Marilyn G. Dimdiman.

Lovie A. .Jadorrneo/ is an Executive Assistant in the MLUWD,

San Fernando, La Union. She testified that she was the Minutes and

Agenda Officer, Reliever and the Secretariat of the Board in the

MLUWD since 2009. Sometime in November 2009, the internal auditor

assigned at the MLUWD conducted an exit conference regarding

various checks and vouchers that were issued without proper

supporting documents. These checks which were without or

incomplete supporting documents became the basis for the notice of

suspension that was issued on January 26, 2010. Consequently, the

MLUWD conducted an investigation and subsequently filed an

administrative complaint based on the findings of the Commission on

Audit (COA) against accused Laroco and Flores before the Civil

Service Commission (CSC) Regional Office I, while the administrative

complaint against accused Picazo was investigated by the Office of the

Government Corporate Counsel (OGCC). In both administrative

cases, all the accused were found guilty and meted out the penalty of

dismissal from service together with the corresponding accessory

penalties.

2TSN dated June 4, 2018, pp. 6-26.


The intended testimony in open court of Marilyn G. Dimdiman,

OIC- Division Manager C-Administrative Division, was dispensed with

after the prosecution and the defense stipulated that she could identify

Exhibits "G" and "H" which are the Certification dated March 15, 2010

and the List of Disbursement Vouchers for the period of January to

November 2009, respectively."

Thereafter, the prosecution rested its case with the admission of

documentary evidence marked as Exhibits "A" to "MM" with

submarkinqs."

For its part, the defense presented as witnesses accused Felipe

G. Picazo, and Evangelina T. Flores. Their testimonies are summed

up as follows:

Accused Felipe G. Picazo'' was the General Manager of

MLUWD at the time material to the instant case. He denied the

allegations in the information that he caused the unauthorized

disbursement of 231 checks amounting to P7,246,760.28. According

to him, the payments were allowed by the board of directors of the

MLUWD through a resolution intended for the payment of the cost of

living allowance (COLA) to employees of the water company for 2009.

Accused Evangelina T. Flores'' was the cashier of the MLUWD

during the time subject of this case. As cashier, her duties and

functions include the preparation of checks. During her employment

she complied with the process of disbursing the funds of the MLUWD.

She prepared the checks in advance while the disbursement vouchers

30rder dated September 17,2018, Records, VollI, p 293.40rder dated September 24, 2018, Records, Vol. 11, p. 299.5Judicial Affidavit, Records, Vo\. 11,pp.303-309; TSN dated November 19, 2018, pp 3-11.6Judicial Affidavit, Records, Vol. 11,pp 323-327; TSN dated November 22,2018, pp. 3-9.


and other supporting documents were being accomplished. Before

being released, the disbursement vouchers and the checks would be

recorded in the Vouchers Payable Register (VPR) and Check Register

(CR) by the company bookkeeper, Teresita Badua. Thus, the subject

checks in the instant case were supported by the required

disbursement vouchers which were even noted in the Notice of

Disallowance (NO No. 10-001-501-(09) dated March 8, 2010 issued by

the COA audit team leader, State Auditor Leticia V. Hufano.

On January 7, 2019 the defense formally offered its evidence

consisting of Exhibits "1", "2" and "4"7 which were all admitted by the

court .

By way of rebuttal, the prosecution presented Leticia Hufano and

Mc Dobet Quiganon as witnesses. Their respective testimonies show

the following:

Leticia Hufano," State Auditor IV, was the audit team leader of

the COA, Regional Office I at the time material to the instant case. She

testified that after conducting a post audit on the financial transactions

of the MLUWD for the year 2009 she issued a Notice of Suspension

dated January 26, 2010. The water district could only comply partially

with the suspension notice because it merely submitted 29 check

vouchers out of the 688 checks listed in the notice of suspension. It

was found during post audit that the checks issued represented

payments for the COLA of certain employees which was in violation of

the provisions of the Salary Standardization Law under Republic Act

No. 6758, the Corporate Compensation Circular No. 10 and DBM

Budget Circular No. 2001-03. Thereafter, a Notice of Disallowance

"Orcer dated January 7,2019, Records, Vol. 11, p. 358."Judicial Affidavit, Records, Vol. 11,pp. 365-370; TSN dated February 11,2019, pp. 4-57.

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dated March 8, 2010 was issued to the MLUWO as a result of the acts

of its concerned employees who were responsible for the payments of

the COLA.

Mc Dobet Ouinaqon? is the audit team leader of the Corporate

Government Sector of the COA among whose official functions was to

monitor the status of notices of suspension issued by his office. He

testified that Notice of Suspension No. 10-001-101-09 which was

issued after the audit for fiscal year 2009 was not fully complied with

by the concerned employees of the MLUWO. Based on the latest

Schedule of Notice of Suspensions (SNS) dated January 3, 2019 as

well as a copy of the updated Statement of Audit Suspensions,

Oisallowances, and Charges (SASOC) the amount of P9,935,984.64

out of P26, 114,333.91 remains unsettled or unaccounted by the said

employees.

Subsequently, the prosecution formally offered its rebuttal

evidence consisting of Exhibits "C" "0" "NN-42" "00" "PP-1" "QQ"I J' , , , ,

"RR", and "SS",10 while the defense formally offered its sur-rebuttal

evidence marked as Exhibits "1" to "5",11 all of which were admitted by

the court.

On October 25 and 30, 2019, the prosecution and the defense

filed their respective memoranda.

In its Memorandum, the prosecution asserted in essence that

accused public officers acted with manifest partiality, evident bad faith

or gross inexcusable negligence, and gave unwarranted benefits,

9Judicial Affidavit, Records, Vol. 11.pp. 456-460; TSN dated March 18, 2019, pp. 5-8, TSN datedJuly 15, 2019, pp. 4-7.100rder dated July 15, 2019, Records, Vol. 11, p 513."order dated September 24,2019, Records, Vol. Ill, o. 23.


advantage, or preference when they prepared, signed, and issued the

subject checks in the absence of or incomplete supporting documents

such as unaccomplished disbursement vouchers as we" as other

documentary requirements. The prosecution pointed out that in fact

accused Flores and Laroco admitted having prepared the subject

checks even without the necessary disbursement vouchers and other

supporting documents; while accused Picazo himself acknowledged

that he pre-signed the subject checks although no vouchers were

attached. The said acts of the accused are in violation of the following

pertinent laws, namely: a) Presidential Decree No. 1445, Ordaining

and Instituting a Government Auditing Code of the Philippines, b)

Section 168 of the Government Accounting and Auditing Manual which

provides for the basic requirements applicable to all classes of

disbursement, and c) Section 42 of COA Circular No. 92-382 dated

July 3, 1992. Likewise, the evidence adduced clearly shows that

accused Picazo, Laroco, and Flores conspired in the issuance of the

checks to the employees of MLUWD in utter disregard of the

requirements under the law. The prosecution stressed that the same

accused actually did not deny that most of the checks were issued with

themselves as payees.

All the accused, on the other hand, maintained that the

prosecution failed to establish the elements of the offense charged and

that conspiracy was not properly alleged and adequately proven by the

evidence on record. In particular, the defense claimed that the

prosecution did not present any evidence to the effect that the accused

gave preferential treatment to some, and not all, of the employees of

MLUWD. It failed to point out who among them were treated favorably

and those who were not.


The prosecution also failed to identify specifically which checks

have unaccomplished or missing disbursement vouchers. Prosecution

witness Hufano stated that the disallowed amounts indicated in the

notice of suspension only pertain to the unauthorized releases of

COLA which does not refer to the offense charged in the information

which is the releasing of the subject checks without the required

supporting documents.

The defense further claimed that the prosecution did not present

evidence to establish the precise figure or amount of the unsettled

accounts. The Notice of Suspension dated January 26, 2010 initially

identified the checks without supporting documents with the total

amount of P26, 114,333.91. The Notice of Disallowance dated March

8,2010 narrowed down the same amount to P14,311,258.68. The

latest report of the COA indicates the amount of P9,935,984.64 which

purportedly remains unsettled. However, the information ultimately

alleges that the unsettled amount is P7,246,760.28 which the

prosecution failed to explain nor establish during the trial with clear and

sufficient evidence.

Additionally, the defense underscored that the prosecution

witnesses admitted that the accused complied with the Notice of

Suspension dated January 26, 2010 which only shows that the total

value of the checks subject of the charge in the information is not part

of the purported unsettled account.

In sum, the accused seek to interpose by way of defense in their

consolidated memorandum that no preferential treatment has been

shown in the acts of the accused, that the information speaks of lack

of supporting documents as basis for the charge and not that of COLA,

that no precise figure was proven to constitute actual damage on the


part of the government and that the accused had complied with the

notice of suspension by submitting unaccounted vouchers which

paved the way for the subsequent issuance of a notice of disallowance.

The pertinent provisions of R.A. No. 3019, as amended, are

herein quoted for ready reference, viz:

Section 3. Corrupt practices of public officers. Inaddition to acts or omissions of public officers alreadypenalized by existing law, the following shall constitute corruptpractices of any public officer and are hereby declared to beunlawful:

x x x

(e) Causing any undue injury to any party,including the Government, or giving any private partyany unwarranted benefits, advantage or preference inthe discharge of his official administrative or judicialfunctions through manifest partiality, evident bad faithor gross inexcusable negligence. This provision shallapply to officers and employees of offices orgovernment corporations charged with the grant oflicenses or permits or other concessions.

x x x

In the case of People vs. Senoiqenbeyen,"the elements of the

crime of violation of Section 3 (e) of R.A. No. 3019 are enumerated as

follows: (1) the accused must be a public officer discharging

administrative, judicial or official functions; (2) he must have acted with

manifest partiality, evident bad faith or gross inexcusable negligence,

and (3) his action caused any undue injury to any party, including the

government, or giving any private party unwarranted benefits,

advantage or preference in the discharge of his functions.

12G.R. No. 160619, September 9,2015.


In Colome, Jr. vs. Sandiganbayan,13 the Supreme Court

explained the meaning of "partiality," "bad faith," and "gross

negligence". "Partiality" is synonymous with "bias" which excites a

disposition to see and report matters as they are wished for rather than

as they are. "Bad faith" does not simply connote bad judgment or

negligence; it imputes a dishonest purpose or some moral obliquity and

conscious doing of a wrong; a breach of sworn duty through some

motive or intent or ill will; it partakes of the nature of fraud. "Gross

negligence" has been so defined as negligence characterized by the

want of even slight care, acting or omitting to act in a situation where

there is a duty to act, not inadvertently but willfully and intentionally with

a conscious indifference to consequences in so far as other persons

may be affected. It is the omission of that care which even inattentive

and thoughtless men never fail to take on their own property. These

definitions prove that the three modes are distinct and different from

each other. Proof of existence of any of these modes in connection

with the prohibited acts under Section 3 (e) of R.A. No. 3019 should

suffice to warrant conviction.

Based on the evidence adduced and the stipulated facts by the

parties during the pre-trial conference, it is not disputed that at the time

material to the instant case, accused Picazo was the general manager,

accused Laroco was the manager assigned at the Administrative

Division, and accused Flores was the cashier in the MLUWD, a

government owned and controlled corporation, and thus were

government officials.

It was also established by the evidence that after conducting post

audit on the financial transactions of the MLUWD for 2009, the COA

13G.R. No. 205561, September 24,2014.

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audit team issued on January 26, 2010, a Notice of Suspension 14

stating therein that 688 checks/disbursement vouchers for transactions

covering the period of January 1 to December 31, 2009 in the total

amount of P26,114,333.91 were not documented nor submitted.

Hence, the COA audit team instructed the MLUWD to submit the

unaccounted checks and disbursement vouchers.

Apparently unable to comply fully with the directive, a Notice of

Disallowance 15 was issued by the COA audit team on March 8, 2010

noting that the payments in checks represent COLA for the

officers/employees of the MLUWD amounting to P14,319,096.68 from

January 1 to December 31, 2009. The COA however, underscored that

the payment of COLA was already disallowed in the previous audit

because it violated the pertinent provision of Republic Act No. 6758, or

the Salary Standardization Law. In Corporate Circular No. 10 it was

explained that the COLA was already integrated in the basic pay when

the subject law was passed by Congress. This was affirmed by the

Department of Budget and Management (DBM) through Budget

Circular No. 2001-03 dated November 12,2001.

Consequently, Engr. Edwin G. Reyes, acting general manager of

MLUWD, initiated an investigation on the matter. The management

directed Marilyn G. Dimdiman, then officer in charge of the

Administrative Division, to locate the missing vouchers.

On March 16, 2010, Ms. Dimdiman submitted a Certification "

stating that based on the available records in their office, items 1 to

104 in the list attached to the COA report were supported by vouchers

14Exhibit "c".15Exhibit "00", also Exhibit "4" for the defense16Exhibit "G".


that do not bear the signatures of concerned personnel, and that the

paid checks indicated as items 105-134 in the attached list are not

supported by corresponding disbursement vouchers or any other

document. Attached to the Certification is a list of the subject checks

consisting of nine (9) paqes." The checks are among the 688 checks

mentioned in the Notice of Suspension covering the year 2009.

It may be noted from the list of 231 checks with a total value of

P7,246,760.28 that there are 149 paid checks with unaccomplished

and unsigned vouchers amounting to P4,310,760.25 and 82 paid

checks which are not supported by any document amounting to

P2,936,000.00.

Out of the 149 paid checks with unaccomplished and unsigned

vouchers, 109 were issued to accused Laroco with a total value of

P3,535,084.00, 17 checks were issued to accused Flores with a total

value of P380,000.00, and 23 were issued to other persons with a total

value of P395,676.25.

Of the 82 paid checks unsupported by any document, 65 were

issued to accused Laroco with a total value of P2,456,000.00, 16 were

issued to accused Flores with a total value of P445,000.00, and one

(1) was issued to accused Picazo in the amount of P35,000.00.

On March 25, 2010, a written Memorandum was issued to

Teresita 8adua, who was in charge of the preparation of vouchers,

Rizalina Callejo as finance officer, as well as accused Picazo, Laroco

and Flores basically for them to explain their side on the matter.

17 Exhibit "H".


In a letter" addressed to General Manager Reyes dated April 5,

2010 Teresita Badua admitted that she was the one in charge of the

preparation of vouchers for all payable transactions. She admitted not

preparing vouchers for the payment of the COLA essentially because

she was bypassed by her superiors who effected the release of the

checks without her knowledge.

Accused Flores admitted to the general manager in her letter19

on April 5, 2010 that the checks disbursed without supporting

documents were for COLA differentials; and that it had been the

practice in their office to prepare the vouchers only at the end of each

month. She likewise admitted having prepared checks upon the order

of the signatories.

Likewise, accused Laroco admitted that the unauthorized

disbursements without the required voucher and supporting

documents were lapse of requirements."

For her part, Rizalina Callejo explained that vouchers were

prepared by the corporate accounts analyst, then supporting

documents would be attached to be signed by all the signatories to the

vouchers. Thereafter, checks would be prepared by the cashier for

payment to be signed by the administrative manager and general

manager or the cashier and the general manager. The paid vouchers

would be returned to the corporate analyst for recording. Callejo added

that in the case of COLA payments, no vouchers were actually

prepared particularly those issued to accused Laroco and Flores. The

18Exhibit "Z".19Exhibit "AA".2°Exhibit "88".


checks were prepared by accused Flores and then signed by accused

Picazo and Laroco."

In a Letter dated May 31, 2010 accused Picazo explained that in

all the previous transactions of the MLUWD, he pre-signed checks

without the attached vouchers and documents in cases of

emergencies. However, he instructed the administrative division to

complete all the supporting documents. He entrusted to the division

chief the duty of accomplishing the required documents. All the

transactions were recorded in the CR as well as in the VPR which

specify the purpose of the disbursement."

After the investigation, administrative complaints were filed

against accused Picazo, Laroco and Flores. On October 5, 2010 the

Board of Directors of the MLUWD rendered a Decisiorr" in

Administrative Case No. 01-001 finding accused Felipe Picazo guilty

of grave misconduct and gross neglect of duty and meted out the

penalty of dismissal with accessory penalties pursuant to Sections 57

and 58, Rule IV (Penalties) of the Uniform Rules on Administrative

Cases in the Civil Service.

Meanwhile, on August 2, 2011, the Civil Service Commission

promulgated its Decision" in the administrative case filed against

accused Flores and Laroco finding them guilty of gross neglect of duty,

grave misconduct and conduct prejudicial to the best interest of the

service, and meted the penalty of dismissal from the service including

the accessory penalties of cancellation of civil service eligibility,

21Exhibit "CC".22Exhibit "FF".23Exhibit "11".24Exhibit "HH".


forfeiture of retirement benefits and perpetual disqualification from re-

employment in the government service.

On March 5, 2019, a Certification" was issued by the COA

certifying that the checks subject of the Notice of Suspension No. 10-

001-101 (09) dated January 6, 2010 remain unsettled up to the

present.

Based on the attendant circumstances, did the accused violate

Section 3 (e) of R.A. No. 3019, by committing the same through

manifest partiality, evident bad faith or gross inexcusable negligence

and by giving unwarranted benefits, advantage or preference when

they disbursed 231 checks in their names and to other employees of

the MLUWD, in the absence of or incomplete supporting documents in

the aggregate amount of P7,246,760.28.

After a careful scrutiny of the evidence adduced in this case, the

Court holds that the prosecution adequately proved the guilt of the

three (3) accused beyond reasonable doubt for the crime of violation

of Section 3 (e) of R.A. No. 3019.

The evidence patently shows that out of the 231 checks subject

of this case 174 were drawn for the account of accused Laroco while

33 were for the account of accused Flares. One (1) check was drawn

in the name of accused Picazo while the rest were for the account of

other employees of the MLUWD.

For easy reference, the court has drawn a list of the checks

issued without or incomplete supporting documents such as

25Exhibit "RR".


unaccomplished disbursement vouchers for the account of the

respective accused and other employees of the water company, to wit:

Checks drawn in favor of accused Laroco for COLA without anysupporting documents."

No. Date of the Check I Check No. Amount of the Check Nature of Paymenti

1 August3,2009 i 040703 50,00000 COLA

2 August6,2009 : 040705 30,000.00 COLA

3 August 7, 2009 040729 26,000.00 COLA

4 August 10, 2009 040736 30,000.00 COLA

5 August 11, 2009 040765 30,000.00 COLA

6 August 12, 2009 040775 40,000.00 COLA

7 August 12, 2009 040769 none COLA

8 August 13, 2009 040782 35,000.00 COLA

9 August 17, 2009 040786 50,000.00 COLA

10 August 18, 2009 040801 35,000.00 COLA

11 August 19, 2009 040810 30,000.00 COLA

12 August 19, 2009 040814 50,000.00 COLA

13 August 20, 2009 040818 25,000.00 COLA

14 August 20, 2009 040820 25,000.00 COLA

15 August 24, 2009 040840 50,000.00 COLA

16 August24,2009 040837 45,000.00 COLA

17 August 25, 2009 040843 35,000.00 COLA

18 August 26, 2009 040852 35,000.00 COLA

19 August27,2009 040862 50,000.00 COLA

20 August27,2009 040866 none COLA

21 August28,2009 040864 50,000.00 COLA

22 September 1, 2009 040866 50,000.00 COLA

23 September 1, 2009 040890 50,000.00 COLA

24 September 2, 2009 040895 25,000.00 COLA

25 September 4, 2009 040904 50,000.00 COLA

26 September 8, 2009 040917 50,000.00 COLA

27 September 8, 2009 040928 30,000.00 COLA

26Exhibit"0".

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28 September 9, 2009 040930 50,000.00 COLA

29 September 10, 2009 040932 50,000.00 COLA

30 September 11, 2009 040944 30,000.00 COLA

31 September 16, 2009 040970 15,000.00 COLA

32 September 16, 2009 040975 45,000.00 COLA

33 September 22, 2009 070986 55,000.00 COLA

34 September 22, 2009 041000 30,000.00 COLA

35 September 23, 2009 041005 50,000.00 COLA

36 September 25,2009 041017 30,000.00 COLA

37 September 25, 2009 041030 50,000.00 COLA

38 September 29, 2009 041061 40,000.00 COLA

39 October 1, 2009 041067 30,000.00 COLA

40 October 2, 2009 041060 45,000.00 COLA

41 October 2, 2009 041071 50,000.00 COLA

42 October 5, 2009 041078 50,000.00 COLA

43 October 5, 2009 041081 20,000.00 COLA

44 October 7, 2009 041090 30,000.00 COLA

45 October 12, 2009 044104 60,000.00 COLA

46 October 12, 2009 044109 50,000.00 COLA

47 October 14, 2009 044119 10,000.00 COLA

48 October 15, 2009 044128 50,000.00 COLA

49 October 16, 2009 044140 30,000.00 COLA

50 October 19, 2009 044142 40,000.00 COLA

51 October 19, 2009 044138 60,000.00 COLA

52 October 20, 2009 044149 50,000.00 COLA

53 October 21, 2009 044160 50,000.00 COLA

54 October 22, 2009 044161 50,000.00 COLA

55 October 23, 2009 044180 35,000.00 COLA

56 October 24, 2009 044124 30,000.00 COLA

57 October 26, 2009 044187 15,000.00 COLA

58 October 28, 2009 044199 50,000.00 COLA

59 October 29, 2009 044195 50,000.00 COLA

60 October 29, 2009 044203 15,000.00 COLA

61 October 30, 2009 044209 15,000.00 COLA

62 November 4, 2009 044220 35,000.00 COLA


63 November 5, 2009 044227 15,000.00 COLA

64 November 6, 2009 044235 50,000.00 COLA

65 November 6, 2009 044236 50,000.00 COLA

Total: P2,456,OOO.00

Checks drawn in favor of accused Laroco for COLA withunaccomplished and unsigned vouchers."

No. Date of the Check Check No. Amount of the Check Nature of Payment

1 January 5, 2009 034370 50,000.00 COLA

2 January 5, 2009 034371 25,000.00 COLA

3 January 6, 2009 034387 30,000.00 COLA

4 January 9, 2009 034411 15,000.00 COLA

5 January 12, 2009 034431 45,000.00 COLA

6 January 13, 2009 034433 15,000.00 COLA

7 January 14, 2009 034458 20,000.00 COLA

8 January 19,2009 034485 35,000.00 COLA

9 January 22, 2009 034522 30,000.00 COLA

10 January 26, 2009 034532 30,000.00 COLA

11 January 27, 2009 034535 35,000.00 COLA

12 January 28, 2009 034555 20,000.00 COLA

13 January 30, 2009 034561 20,000.00 COLA

14 February 2, 2009 034579 45,000.00 COLA

15 February 4, 2009 034599 45,000.00 COLA

16 February 6, 2009 0346111 45,000.00 COLA

17 February 10,2009 034635 55,000.00 COLA

18 February 11, 2009 034650 20,000.00 COLA

19 February 13, 2009 034660 35,000.00 COLA

20 February 19, 2009 036404 30,000.00 COLA

21 February 20, 2009 036416 10,000.00 COLA

22 February 23, 2009 036421 45,000.00 COLA

23 February 24, 2009 036436 30,000.00 COLA

24 February 27,2009 040639 65,000.00 COLA

25 March 3, 2009 036461 30,000.00 COLA

26 March 3, 2009 036466 25,000.00 COLA

27Exhibit "l".


27 March 3, 2009 I 036468 30,000.00 COLA

28 March 3, 2009 036467 30,000.00 COLA

29 March 4, 2009 036483 20,000.00 COLA

30 March 5, 2009 036486 25,000.00 COLA

31 March 9, 2009 036503 45,000.00 COLA

32 March 10, 2009 036515 35,000.00 COLAI

33 March 11, 2009 036528 10,000.00 COLAI

34 March 12,2009 I 036529 45,000.00 COLA

35 March 13, 2009 036541 30,000.00 COLA

36 March 16, 2009 036564 30,000.00 COLA

37 March 18, 2009 036577 10,000.00 COLA

38 March 19,2009 036579 30,000.00 COLA

39 March 25, 2009 036612 40,000.00 COLA

40 March 25, 2009 036634 30,000.00 COLA

41 March 30, 2009 036651 40,000.00 COLA

42 March 30, 2009 036653 28,084.00 COLA

43 March 31,2009 036660 25,000.00 COLA

44 April 3, 2009 036684 40,000.00 COLA

45 April 3, 2009 036696 15,000.00 COLA

46 April 4, 2009 036467 30,000.00 COLA

47 April 7, 2009 036701 50,000.00 COLA

48 April 7, 2009 036703 55,000.00 COLA

49 April 8, 2009 036719 40,000.00 COLA

50 April 8, 2009 036722 40,000.00 COLA

51 April 13, 2009 036726 35,000.00 COLA

52 April 13, 2009 036468 30,000.00 COLA

53 April 14, 2009 036729 15,000.00 COLA

54 April 16, 2009 036748 50,000.00 COLA

55 April 20, 2009 36737 35,000.00 COLA

56 April 21,2009 036791 30,000.00 COLA

57 April 21, 2009 036792 30,000.00 COLA

58 April 23, 2009 036805 30,000.00 COLA

59 April 24, 2009 036818 45,000.00 COLA

60 April 27, 2009 036820 25,000.00 COLA

61 April 27, 2009 036833 35,000.00 COLA


62 April 28, 2009 036836 20,000.00 COLA

63 April 29, 2009 036839 15,000.00 COLA

64 April 30, 2009 036857 25,000.00 COLA

65 June 2,2009 040090 30,000.00 COLA

66 June 3,2009 040112 30,000.00 COLA

67 June 4,2009 040127 35,000.00 COLA

68 June 5,2009 040133 35,000.00 COLA

69 June 8,2009 040140 25,000.00 COLA

70 June 10, 2009 040155 50,000.00 COLA

71 June 10, 2009 040157 15,000.00 COLA

72 June 11, 2009 040166 45,000.00 COLA

73 June 15, 2009 040169 15,000.00 COLA

74 June 16, 2009 040178 20,000.00 COLA

75 June 17, 2009 040180 50,000.00 COLA

76 June 19, 2009 040219 25,000.00 COLA

77 June 22, 2009 040227 25,000.00 COLA

78 June 22, 2009 040229 50,000.00 COLA

79 June 23, 2009 040236 40,000.00 COLA

80 June 24, 2009 040241 40,000.00 COLA

81 June 25, 2009 040252 50,000.00 COLA

82 June 26, 2009 040175 30,000.00 COLA

83 June 29, 2009 040269 30,000.00 COLA

84 June 30, 2009 040270 30,000.00 COLA

85 June 30, 2009 040292 15,000.00 COLA

86 July 1,2009 040259 20,000.00 COLA

87 July 2,2009 040298 30,000.00 COLA

88 July 2,2009 040300 50,000.00 COLA

89 July 3, 2009 040503 25,000.00 COLA

90 July 6,2009 040529 40,000.00 COLA

91 July 7, 2009 040530 25,000.00 COLA

92 July 8,2009 040544 30,000.00 COLA

93 July 9,2009 040546 35,000.00 COLA

94 July 13, 2009 040555 30,000.00 COLA

95 July 13, 2009 040556 50,000.00 COLA

96 July 14, 2009 040557 20,000.00 COLA


97 July 14, 2009 040558 45,000.00 COLA

98 July 15, 2009 040176 35,000.00 COLA

99 July 16, 2009 040583 40,000.00 COLA

100 July 17, 2009 040584 35,000.00 COLA

101 July 20, 2009 040602 25,000.00 COLA

102 July 21,2009 040612 50,000.00 COLA

103 July 22, 2009 040575 25,000.00 COLA

104 July 23, 2009 040623 50,000.00 COLA

105 July 24, 2009 040626 35,000.00 COLA

106 July 26, 2009 040627 35,000.00 COLA

107 July 29, 2009 040658 25,000.00 COLA

108 July 30, 2009 040680 35,000.00 COLA

109 July 31, 2009 040696 20,000.00 COLA

Total: P3,535,084.00

Checks drawn in favor of accused Flores for COLA without anysupporting documents."

No. Date of the Check Check Amount of the Check Nature of paymentNo.

1 July 6,2009 040528 50,000.00 COLA

2 August3,2009 040704 40,000.00 COLA

3 August 10, 2009 040742 50,000.00 COLA

4 August17,2009 040796 20,000.00 COLA

5 August 19, 2009 040815 30,000.00 COLA

6 September 2, 2009 040894 25,000.00 COLA

7 September 8, 2009 040922 35,000.00 COLA

8 September 22, 2009 040995 50,000.00 COLA

9 September 22, 2009 040998 10,000.00 COLA

10 September 25,2009 041041 25,000.00 COLA

11 September 28, 2009 041040 30,000.00 COLA

12 September 29, 2009 041058 25,000.00 COLA

13 November 6, 2009 044228 20,000.00 COLA

14 November 9, 2009 044255 20,000.00 COLA

15 November 12, 2009 044271 15,000.00 COLA

Z6Exhibit"Q".


16 November 16, 2009 044282 none Payment of salaries toDistrict Casual and JO.

Total: P445,OOO.OO

Checks drawn in favor of accused Flores with unaccomplishedand/or unsigned vouchers."

No. Date of the Check : Check No. Amount of the Check Nature of PaymentI

1 January 9, 2009 034410 15,000.00 COLAI

2 January 19, 2009 I 034485 20,000.00 COLA

3 January 22, 2009 034503 30,000.00 COLA

4 January 27, 2009 034536 20,000.00 COLA

5 February 16, 2009 034675 25,000.00 COLA

6 February 18, 2009 034695 25,000.00 COLA

7 February 24, 2009 036436 15,000.00 COLA

8 March 20, 2009 036595 30,000.00 COLA

9 March 23, 2009 036611 15,000.00 COLA

10 April 2, 2009 036685 25,000.00 COLA

11 April 7, 2009 036698 25,000.00 COLA

12 April 7, 2009 036700 25,000.00 COLA

13 April 8, 2009 036720 20,000.00 COLA

14 April 27,2009 036834 20,000.00 COLA

15 April 29, 2009 036842 20,000.00 COLA

16 June 15, 2009 040168 20,000.00 COLA

17 July 3,2009 040299 30,000.00 COLA

Total: P380,OOO.OO

Check drawn in favor of accused Picazo for payment of cashadvance without supporting documents."

No. Date of Check Check No. Amount of the Check Nature of Payment1 November 9, 2009 I 044254 35,000.00 Payment of Cash

AdvanceTotal: P35,OOO.OO

29Exhibit "K".30Exhibit "S".


Checks drawn in favor of different employees for COLA withoutsupporting documents."

No. Date of Check Check No. Amount of Checks Nature of Payment1 January 9, 2009 034422 10,000.00 COLA2 January 23, 2009 034529 15,000.00 COLA3 January 28, 2009 034544 10,000.00 COLA4 March 11, 2009 036527 35,000.00 COLA5 June 2,2009 040089 15,000.00 COLA6 June 3,2009 040092 20,000.00 COLA7 June 3,2009 040093 15,000.00 COLA8 June 3,2009 040098 25,000.00 COLA9 June 3,2009 040099 25,000.00 COLA10 June 3,2009 040113 20,000.00 COLA11 June 3,2009 040283 20,000.00 COLA12 June 18, 2009 040181 10,000.00 COLA13 June 19, 2009 040156 14,104.28 COLA14 June 19, 2009 040221 6,572.00 COLA15 June 23, 2009 040230 30,000.00 COLA16 June 26, 2009 040259 30,000.00 COLA17 July 3,2009 040527 10,000.00 COLA18 Julv 14, 2009 040569 10,000.00 COLA19 July 16, 2009 040587 5,000.00 COLA20 July 17, 2009 040159 20,000.00 COLA21 July 20, 2009 040597 10,000.00 COLA22 July 24, 2009 040651 15,000.00 COLA23 July 29, 2009 040668 25,000.00 COLATotal: P395,676.25

It appears quite clear from the evidence that the three (3)

accused were aware of the irregular, nay unauthorized, disbursements

of the above listed checks. By virtue of their respective positions as

general manager, administrative division manager and cashier,

accused Picazo, Laroco and Flores were tasked with the preparation,

examination and approval of the release and payments thereof. It was

their duty to ensure that in the performance of their official tasks money

from public coffers should be disbursed properly and only for clearly

legal purpose. However, the three (3) accused with evident bad faith

and manifest partiality took advantage of their positions and illegally

benefited from the funds of the water company by drawing the subject

checks in their favor and for a few other employees despite the

previous advisory from the COA that the said disbursements

31Exhibit"M".


purportedly representing COLA are not allowed under the applicable

laws and issuances of concerned government agencies.

Truth to tell, the subject funds were merely made to appear as

COLA when the actual intention of the accused was simply to bilk the

company of its limited public funds for their pure selfish interests.

Under the law, COLA is in the nature of an allowance not intended to

reimburse expenses incurred by officials and employees of the

government in the performance of their official functions. It is not

payment in consideration of the fulfillment of official duty although it is

deemed already incorporated in the standardized salary rates of

government officials under the general rule of integration. It is also

considered as a fringe benefit intended to cover increases in the cost

of living and should be integrated into the standardized salary rates."

As has happened in this case however, the accused, through sheer

manipulation, raked off gargantuan funds almost by the day which

were passed off as allowances that are several times more than their

basic monthly salaries. Indeed, no amount of explanation can justify

their illegal acts of giving unwarranted benefits unto themselves which

notoriously reek of evident bad faith and manifest partiality"

As aptly pointed out by the prosecution in its memorandum,

under Section 4 of Presidential Decree No. 1445 which is a law

Ordaining and Instituting a Government Auditing Code of the

Philippines, it is provided that:

Sec 4. Fundamental principles. - Financial transactions andoperations of any government agency shall be governed by thefundamental principles set forth hereunder, to wit:

1. No money shall be paid out of any public treasury of depositoryexcept in pursuance of an appropriation law or other specificstatutory authority.

32Gutierrez vs. Department of Budget and Management, G.R. No. 153266, March 18,2010.33Uriarte vs. People, 540 Phi1474, 494 (2006).


2. Government funds or property shall be spent or used solely forpublic purposes.3. Trust funds shall be available and may be spent only for thespecific purpose for which the trust was created or the fundsreceived.4. Fiscal responsibility shall, to the greatest extent, be shared by allthose exercising authority over the financial affairs, transactions, andoperations of the government agency.5. Disbursements or disposition of government funds or propertyshall invariably bear the approval of the proper officials.6. Claims against government funds shall be supported withcomplete documentation.7. All laws and regulations applicable to financial transactions shallbe faithfully adhered to.8. Generally accepted principles and practices of accounting as wellas of sound management and fiscal administration shall beobserved, provided that they do not contravene existing laws andregulations.

Likewise, Section 168 of the Government Accounting and

Auditing Manual provides for the basic requirements applicable to all

classes of disbursements that shall be complied with, to wit:

a) Certificate of availability of fund. - Existence of lawful appropriation,the unexpended balance of which, free from other obligations, issufficient to cover the expenditure, certified as available by anaccounting officer or any other official required to accomplish thecertificate.

xxx

b) Approval of claim or expenditure by head of office or his dulyauthorized representative.

c) Documents to establish validity of claim. - Submission of documentsand other evidences to establish the validity and correctness of claimfor payment.

d) Conformity of the expenditure to existing laws and regulations.e) Proper accounting treatment.

Moreover, Section 42 of Commission on Audit Circular No. 92-

382 dated July 3, 1992 states:

Sec. 42. Checks drawn on disbursement vouchers. - Checksin settlement of obligations shall be drawn only on duly approveddisbursement vouchers.


As further pointed out by the prosecution, the Commercial

Practices Manual for Local Water Districts specifically details the

procedure to be followed in check preparation. Thus, check vouchers

are first prepared together with supporting documents prior to

preparation of checks. The vouchers are likewise signed and approved

by the designated signatories prior to the signing and approval of the

checks.

Indeed, the accused's acts of preparing, signing and issuing the

subject checks without the proper voucher and supporting documents

constitute flagrant disregard of the foregoing prescribed accounting

and auditing rules which clearly smacks of evident bad faith. Worse,

they knew that the purpose for which the checks were drawn was not

allowed under the applicable law and therefore illegal.

The court is also convinced that conspiracy among the accused

to commit the crime was duly established. Conspiracy exists when two

or more persons come to an agreement concerning the commission of

a felony and decide to commit it. Once an express or implied

conspiracy is proved, all of the conspirators are liable as eo-principals

regardless of the extent and character of their respective active

participation in the commission of the crime or crimes perpetrated in

furtherance of the conspiracy because in contemplation of law, the act

of one is the act of all. The rule is anchored on the sound principle that

when two or more persons unite to accomplish a criminal object,

whether through the physical volition of one, or all, proceeding

severally or collectively, each individual whose evil will actively


contribute to the wrong-doing is in law responsible for the whole, the

same as though performed by himself alone."

Necessarily however, the burden is upon the prosecution to

prove that all the accused had come to an agreement concerning the

commission of the crime and decided to execute it. Overt acts that were

clearly aimed at perpetrating the crime of violation of Section 3 (e) of

R.A. No. 3019 must be shown to have been consciously and

deliberately performed by the purported conspirators to achieve their

common purpose.

Undeniably, the three (3) accused could not have pulled off their

heists of government funds without unity of purpose as clearly

manifested in their acts. Each of the accused admitted having

knowingly performed individual acts that served as indispensable link

in the chain of actions necessary for the commission of the crime

charged. Through their respective official functions as general

manager, administrative division chief and cashier, accused Picazo,

Laroco and Flores participated in the preparation, examination and

approval to effect the issuance of the checks in their favor as payees

though wanting of any supporting documents. Their individual acts

taken together contributed and were necessary to the eventual release

of the checks which inured to their benefit and a few other employees

of MLUWD but to the damage of the government in the total amount of

P7 ,246, 760.28.

34People vs. Go, G.R. No. 168539, March 25,2014; Zapanta vs. People of the Philippines, GRNos, 192698-99, April 22, 2015, Citing People vs. Bautista 636 Phi\' 535, People vs. Geronimo,G.R No. L-35700, October 15,1973.


The court notes that accused Picazo would wish to mitigate his

liability, if not insulate himself from the other accused, by claiming that

he pre-signed all the subject checks before the same could be

accomplished and issued to their respective payees. As general

manager of the water company in whose hands ultimately lie the

responsibility for its business affairs, the accused should have known

or realized that his claimed act of pre-signing checks was constitutive

of no less than gross inexcusable negligence that nevertheless makes

him liable for the instant charge. Echoing the pronouncement of the

Supreme Court in the case of Colome, Jr. vs. Sandiganbayan,35 gross

negligence is characterized by the want of even slight care, acting or

omitting to act in a situation where there is a duty to act, not

inadvertently but willfully and intentionally with a conscious indifference

to consequences in so far as other persons may be affected. It is the

omission of that care which even inattentive and thoughtless men

never fail to take on their own property.

Yet again, the totality of evidence would inevitably point to the

fact that accused Picazo was more than just being wantonly

nonchalant about his sensitive duties and obligation as general

manager of the water company. The illegal transactions in this case

involve large amounts of money being committed almost daily that

spanned for a period of one (1) year. It is therefore unthinkable for the

accused to claim, though without success, that such blatant

transgression of the law could have been committed and went on

undetected during his watch over a long period of time.

WHEREFORE, in light of the foregoing, judgment is hereby

rendered finding accused Felipe G. Picazo, Virginia C. Laroco, and

35Supra, See Note No. 13.

ResolutionCriminal Cases No. SB-16~CRM-0630Pp vs. Felipe G. Picazo, et. aI., of 31x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

Evangelina T. Flores GUILTY beyond reasonable doubt of the crime of

violation of Section 3 ( ) of Republic Act No. 3019, as amended, and

are sentenced to suffer the indeterminate penalty of imprisonment of

six (6) years and one ('i) month, as minimum, up to ten (10) years, as

maximum, with perpetual disqualification from holding public office.

The same accused are directed to pay jointly and severally

MLUWD the sum of P7,246,760.28 by way of actual damages.

SO ORDERED.Quezon City, Metr Mani ,Philippines

- .'~~-> ~ IUtk lltllf~ L>"'_, RDO M. CALDONA

sociate Justice

WE CONCUR:

EFREN ~QLA CRU2..

Ass~~a7: JusticeChairperson

~~~

GERALDINE FAITH A. ECONGAssociate Justice


ATTESTATION

I attest that the conclusions in the above decision were reached

in consultation before the case was assigned to the writer of the opinion

of the Court's Division.

EFREN ~l~ LA CRUZChairper~Un, First Division

CERTIFICATION

Pursuant to Article VIII, Section 13, of the Constitution, and the

Division Chairperson's Attestation, it is hereby certified that the

conclusions in the above decision were reached in consultation before

the case was assigned to the writer of the opinion of the Court's

Division.

SANDIGANBA VAN - Office of the Ombudsman SB Decisions/SB-16...Pp vs. Felipe G. Picazo,et.al., Page11...

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