Before us is a petition for review on certiorari seeking reversal of the Decision1 [First Division, penned by Associate Justice Jose S. Balajadia and concurred in by Presiding Justice Francis E. Garchitorena and Associate Justice Minita V. Chico-Nazario; Rollo, pp. 29-52.] of the Sandiganbayan dated June 3, 1996, in Criminal Case No. 12960, convicting petitioner Nicanor E. Estrella of the crime of malversation of public funds as defined and penalized under Article 217(4) of the Revised Penal Code.

On July 1, 1975, petitioner was appointed as Municipal Cashier2 [Exhibit "A".] in the Office of the Municipal Treasurer, Isulan, Sultan Kudarat, with a bond in the amount of P28,000.00.3 [Exhibit "A-1".] Per Audit Assignment Order No. LGAD 86-1 dated January 28, 1986 issued by the Commission on Audit (COA), Regional Office XII, he was audited of his cash and accounts for the period from March 18 to 24, 1986 only.4 [Exhibit "F".] For reasons unknown, the cash and accounts of the petitioner were not audited for the period from July 1, 1975, the date of his appointment, up to March 17, 1986.5 [TSN dated November 10, 1994, pp. 4-5.]

Based on the official receipts for the period from February 7, 1986 to March 18, 1986 submitted by the petitioner during the audit examination,6 [The audit team was composed of Jovita R. Binangon, as team leader and Elizabeth S. Dizon, Crisanto N. Alvarez, Conrado T. Estimo and Nilo Romano, as members, Exhibits "D-6".] petitioner apparently had daily collections amounting to P247,753.28.7 [Exhibits "D-6".] Under office rules, petitioner was supposed to turn over the collections to Municipal Treasurer Jose B. Galvez, but he failed to do so since Galvez was then on leave of absence. As a recourse, petitioner should have deposited his collections with the depository bank of the municipality but he likewise neglected to do.8 [TSN dated November 10, 1994, p. 13.]

During the audit examination, petitioner produced the following:

The audit team credited the amount of P250,148.97 against his cash collections amounting to P247,753.28, hence, petitioner incurred no shortage. The remaining amount of P2,395.6914 [The difference between P250,148.97 (amount produced by petitioner during the audit examination) and P247,753.28 (cash collections)] was carried over and deducted from his total cash advance.

Furthermore, the audit examination disclosed that from March 31, 1979 to December 3, 1985, petitioner made a total cash advance of P220,804.25.15 [Exhibit "D-7".] The cash advance of P14,025.0016 [TSN dated May 19, 1994, p. 23; Exhibit "D-7"] given to the driver of Municipal Treasurer Galvez was included in petitioner’s accountability because it was the latter who granted it. Likewise, the amount of P15,000.0017 [Ibid.] used to pay the salaries of the municipal employees, which petitioner borrowed from Mrs. Leonarda Panceras, in-charge of the Special Educational Fund, was also charged to his cash advances. All in all, petitioner received cash advances totalling P249,829.25.

Of the P249,829.25, petitioner was able to liquidate on November 20, 1985 the amount of P29,083.5718 [Exhibit D-9.] only. The amount of P2,395.69 resulting from the liquidation of petitioner’s cash collections was added to P29,083.57, thus, petitioner’s accountability was reduced to P218,349.99.19 [The difference between P249,829.45 and P31,479.26.]

Consolidated and presented in tabulated form, petitioner’s accountability appears as follows:

Petitioner admitted the accuracy of these different amounts when he certified them to be correct and signed the Report of Cash Examination, List of Cash Items Payroll and Vouchers and the List of Allowed Cash Advances.

Thereafter, the audit team from the Commission on Audit submitted its audit report to the Regional Director, Commission on Audit, Regional Office XII.

On April 11, 1986, State Auditor Binangon served a letter of demand22 [Exhibit "C".] on the accused who acknowledged receipt thereof, setting forth the findings of the audit team particularly the shortage and demanded from the petitioner immediate production of the missing funds and a written explanation within 72 hours why the shortage occurred. In the said letter, petitioner was officially informed of his shortage in the amount of P222,327.24 which was stated in the original Report of Cash Examination23 [Exhibit "B".] but which was adjusted in the amended Report of Cash Examination24 [Exhibit "D".] dated June 11, 1986 by crediting him the amount of P2,395.69,25 [Voucher No. 61.] thereby reducing his accountability to P218,349.99.

After establishing the amount of the shortage as reflected in Exhibit "D", the OIC Municipal Treasurer submitted his progress report demonstrating further restitution of petitioner’s disallowed cash advances and vouchers in the amount of P14,406.00 and P12,303.00 or a total of P26,709.00,26 [Exhibit "H-1"; TSN dated May 19, 1994, p. 28.] thereby further reducing his liability to P191,640.99. While petitioner admitted his accountability to be only P64,538.95, he doubted the accuracy of the said amount for the reason that in his perception, his liability was allegedly between P30,000.00 and P40,000.00 only.27 [Exhibit "E".] Resultantly, petitioner was charged with malversation of public funds in the Information filed with respondent Sandiganbayan, allegedly committed as follows:

Duly arraigned on January 13, 1989, petitioner Nicanor E. Estrella pleaded "Not Guilty" to the charge.29 [Record, p. 28.] After the prosecution had rested its case, petitioner filed a "motion to be allowed to file a demurrer to evidence" which was opposed by the prosecution. Respondent court denied the said motion. On May 20, 1995, petitioner again filed a "motion and/or manifestation" for the dismissal of the case for lack of merit. When the incident was heard, petitioner’s counsel admitted in open court that the motion and/or manifestation was "in the nature of a demurrer to evidence", hence, pursuant to Sec. 15, Rule 119 of the Rules of Court, petitioner effectively waived his right to present evidence and submitted the case for decision based on the evidence presented by the prosecution. The Sandiganbayan rendered its decision convicting petitioner, the dispositive portion of which reads:

Hence, this petition.

Petitioner states five (5) assigned errors, to wit:

Otherwise stated, the basic issue is this: Whether or not the Sandiganbayan erred in finding petitioner guilty beyond reasonable doubt of the crime of malversation.

Petitioner vigorously opposes the Report of Cash Examination disclosing that he is still liable for cash collections, averring it is intrinsically wrong. According to him, the audit team erred in crediting paid payrolls/vouchers, cash on hand or allowed cash item against his accountability for cash collections considering that his cash collections were already liquidated. His basis was the prosecution’s own evidence, the 18 receipts31 [Exhibits "D-6-B" to "D-6-S".] amounting to P235,070.99 issued by the Municipal Treasurer for the liquidation of his daily collections.

As shown in the Report of Cash Examination, there are two kinds of money obligations that petitioner has with the Municipal Government of Isulan, Sultan Kudarat. They are cash collections and cash advances. A cardinal principle in accounting is that fully paid payrolls and vouchers should be credited to cash advances.32 [Sec. 179 of Government Accounting and Auditing Manual, Vol. I.]

In the case at bar, the audit team admitted that they credited the fully paid vouchers/payrolls in the amount of P68,692.91 and voucher No. 61 in the amount of P3,977.28 or a total of P72,670.19 against petitioner’s cash collections as evidenced by the Report of Cash Examination33 Exhibit "D".33, duly signed34 Exhibit "D-2".34 by petitioner. Likewise, the amount of P177,478.78 representing the cash on hand and allowed cash items, produced by petitioner during the audit examination were added to P72,670.19 by the audit team to fully liquidate petitioner’s cash collections. It is apparent therefore that petitioner incurred no shortage in his cash collections.

However, from the testimony of the lone prosecution witness, State Auditor Binangon, it appeared that petitioner was able to liquidate his money obligation only during the time of the audit examination. To quote her testimony:

On the other hand, petitioner contends that it was his practice to remit his collections to the Municipal Treasurer every other day or daily. Due to the trust he reposed on the Treasurer he did not ask receipt for every remittance that he made. Petitioner further contends that he opted to rest his case in a Demurrer to Evidence considering that during the Pre-trial of the said case, he adverted to the prosecution’s evidence, particularly, Exhibits "D-6-B" to "D-6-S", as evidencing the liquidation of his cash collections.36 [Rollo,, pp. 15-16.]

After a careful scrutiny of Exhibits "D-6-B" to "D-6-S", it appeared that the testimony of the lone prosecution witness was more credible than that of petitioner’s declaration. The receipts representing the liquidation for cash collections supported the testimony of the prosecution witness. Said receipts were not chronologically issued as demonstrated in the following:

As shown in the above mentioned list, Receipt No. 5852402 was issued on February 17, 1986 while Receipt No. 5852403 was issued on March 19, 1986. The irregularity in the issuance of the receipts evidencing remittances of cash collections arose when succeeding numbers of Receipt No. 5852403 were issued ahead of the same. If it is true that petitioner really made remittances of his cash collections at the end of the day, the irregularity would not have happened. It was for this reason that Municipal Treasurer Jose S. Galvez of Isulan, Sultan Kudarat was also prosecuted before the respondent court for violation of PD 1445, Section 89.37 [Granting of cash advances to the accused without first requiring liquidation of prior ones; Rollo, p. 31.]

As stated earlier and based on the Report of Cash Examination, the fully paid payrolls and vouchers were credited to petitioner’s accountability for cash collection. The prosecution witness, as member of the audit team, explained their procedure or reason in this manner, thus:

In short, the audit team merely followed the procedure initiated by the petitioner. The petitioner included the fully paid payrolls and vouchers in liquidating his cash collections. In the same way, the Municipal Treasurer receipted the liquidation based on the sum total of cash and the paid payrolls and vouchers. If we are to conform with the opinion of the petitioner to the effect that the fully paid payrolls and vouchers totalling P72,670.19 should be credited to his cash advances, it would simply mean that the same amount should likewise be deducted from his cash collections. In the same way that if we are to credit the amount of P177,478.7840 [Said amount was added to P72,670.19 by the audit team to fully liquidate petitioner’s cash collections.] from his cash advances, the amount of P175,083.09 should be deducted from his collections, hence, petitioner’s shortage would still be the same. As pointed out by the respondent court, and we quote:

Article 217 of the Revised Penal Code holds liable for malversation a public officer who shall appropriate public funds or property for which he is accountable, or shall take or misappropriate or shall consent, or through abandonment or negligence, shall permit any other person to take such public funds or property. Furthermore, the failure of a public officer to have duly forthcoming any public funds or property with which he is chargeable, upon demand by any duly authorized officer, shall be prima facie evidence that he has put such missing funds or property to personal uses.

The elements of malversation of public funds are (a) the offender is a public officer, (b) he had custody or control of the funds or property by reason of the duties of his office, (c) these funds or property were public funds or property for which he was accountable, and (d) that he appropriated, took, misappropriated or consented, or through abandonment or negligence, permitted another person to take them.42 [People v. Pepito, 267 SCRA 358, 368 (1997) citing Agbanlog v. People, 222 SCRA 530,536-537 (1993)] Anent the last element, we have held that to justify conviction for malversation of public funds, the prosecution has only to prove that the accused received public funds or property and that he could not account for them or did not have them in his possession and could not give a reasonable excuse for the disappearance of the same.43 [People vs. Pepito, 267 SCRA 358, 368.] An accountable public officer may be convicted of malversation even if there is no direct evidence of misappropriation and the only evidence is that there is a shortage in his accounts which he has not been able to explain satisfactorily.44 [Navallo v. Sandiganbayan, 234 SCRA 175, 185 (1994); Villanueva v. Sandiganbayan, 200 SCRA 722, 734.]

Petitioner was not able to produce the missing amount of P191,640.99; and neither was he able to explain his failure to produce that amount. Aside from petitioner’s feeble attempt to shift the blame to the audit team, nothing in the records of this case supports his allegation that the audit team had committed an error in the Report of Cash Examination.45 [Exhibit "D".]

WHEREFORE, the petition is DENIED and the decision of respondent Sandiganbayan is AFFIRMED in toto.

Bellosillo, (Chairman), Mendoza, Quisumbing, and Buena, JJ., concur.