"That during the period from May 4, 1987 to November 30, 1987, or on dates subsequent thereto, in the Municipality of Pasig, Metro Manila, Philippines, and within the jurisdiction of this Honorable Court, the said accused Francisco C. Enriquez being then the Municipal Treasurer of Pasig, Metro Manila, Carmencita Espinosa then the Administrative Officer I and designated as Cashier in the Office of the Municipal Treasurer of Pasig, Metro Manila and Belinda Santos1 [Charges against her were dismissed due to her demise during the pendency of the proceedings.], a Clerk in the Realty Tax Section and designated as Asst. Cashier in the Treasurer’s Office of Pasig, Metro Manila, duly appointed/designated and qualified as such, hence, all accountable officers by reason of the duties of their respective offices, accountable for the funds and properties received by them in their official positions as such, conspiring and confederating with each other and taking advantage of their official positions with wanton disregard of auditing laws, rules and regulations, did then and there willfully, unlawfully and feloniously and with grave abuse of confidence, misappropriate, misapply and convert to their own personal use and benefit the amount of THREE MILLION ONE HUNDRED SEVENTY EIGHT THOUSAND SEVEN HUNDRED SEVENTY-SEVEN AND 41/100 (P3,178,777.41), Philippine currency, from the said public funds received by them in their respective official positions aforementioned in the Office of the Municipal Treasurer of Pasig, Metro Manila , to the damage and prejudice of the government.

CONTRARY TO LAW."2 [Original Records (OR), pp. 1-2.]

"WHEREFORE, judgment is hereby rendered finding both accused Francisco Enriquez y Cruz and Carmencita Espinosa y Gonzales GUILTY beyond reasonable doubt as co-principals in the offense of Malversation of Public Funds, as defined and penalized under Article 217, paragraph 4 of the Revised Penal Code and crediting each of them with the mitigating circumstance of voluntary surrender, without any aggravating circumstance in offset, and applying the Indeterminate Sentence Law, each of them is hereby sentenced to suffer the indeterminate penalty ranging from TEN (10) YEARS and ONE (1) DAY of prision mayor, as the minimum, to SEVENTEEN (17) YEARS, FOUR (4) MONTHS and ONE (1) DAY of reclusion temporal, as the maximum; to further suffer perpetual special disqualification; to pay, jointly and severally, the Government of the Republic of the Philippines in the same amount of P3,178,177.41, and to pay their proportional share of the costs of the action.

SO ORDERED."3 [OR, pp. 965-966.]

From the narration of the evidence, testimonial and documentary, adduced by both accused Enriquez and Espinosa in their defense, it appears that certain circumstances of paramount importance have been ignored or overlooked by the defense, considering the foregoing admitted facts on record, which are, that the instant prosecution is for Malversation of Public funds and that once a shortage in said funds had been established, it is the accountable officer (or officers) who bear(s) the obligation to submit a satisfactory explanation as to why he (or they) should not be held accountable therefor (Article 217, Revised Penal Code).

These circumstances have not been thoroughly nor diligently delved into by either of the accused, who were apparently more concentrated in pointing to each other and shifting the blame for the appearance and/or introduction into the municipal treasurer’s accounts of a check in the amount of P3,267,911.10 drawn against the China Banking Corporation, dated October 7, 1987 (Exhibit E). As testified to by prosecution witness Auditor Carmelita Antasuda, said check was made to form part of the collections of the municipal treasurer, sometime in October 1987, despite the fact that there was no official receipt appearing to have been issued for it and neither does it appear to have been issued in payment of taxes or obligations due to the municipality of Pasig. Afterwards, said check, bearing accused Enriquez’ indorsement at the back, was included in a statement of checks (Exhibit P) prepared in the Pasig Municipal Treasurer’s Office for transmittal to, and deposit with, the Quezon City Treasurer’s Office, the latter being the official district treasury for municipal deposits. Missc

The statement of the checks (Exhibit P), together with the check in question (Exhibit E), and another statement of checks (Exhibit 7-Espinosa) was admittedly brought by Benito Buenviaje, a casual janitor in the municipal treasurer’s office, upon the instruction of accused Enriquez to the Quezon City Treasurer’s Office and received thereat on October 15, 1987. Buenviaje was issued two official receipts, one of which, O. R. No. 279451 (Exhibit 7-b-Enriquez), was in the amount of P3,308,774.44, which included the dishonored check (Exhibit M-1, Page 2 par. 3). The check was deposited by the Quezon City Treasury Office under Account No. 6 with the PNB, Cubao, Branch, for credit to the Pasig municipal treasury but it was dishonored and returned on October 21, 1987 because the account was under garnishment and the check had an unauthorized signatory (Exhibit E-2). As found by the NBI, the drawer of the said check was a certain "D. Noble", with the account (CBC No. 0026813) being in the name of one Leonora Reyes of EDSA Home Improvement Center, Inc. (Exhibit M-1, page 3, par. 5).

Hence, as of October 15, 1987, the municipal collections had a virus fatally imbedded within it, a wayward private check which cannot lawfully be credited to the municipal treasury or to the accountability of either of the accused herein, as primary and secondary accountable officers. Worse, on September 23, 1987, accused Espinosa had tried to foist a similar scam by personally bringing to the District Treasury in Quezon City bundles of checks listed in three (3) statements of checks, dated September 15, 1987 and signed by accused Enriquez, totaling P583,084.18 (Exhibits 22, 22-a and 22-b-Espinosa). While the total amount on the adding machine tapes when presented, was P3,583,084.18, as testified to by Maria Felisa Cervantes (TSN, pp. 6-31, May 21, 1991), with accused Espinosa being issued Official Receipt No. 279339 (Exhibits 11-to11-d-Enriquez), she later returned to Cervantes and said she had committed a mistake and had Cervantes cross out the figure ‘3" in said receipt to conform with the actual amount of the checks which was P583,084.18 only.

Coupled with the same scenario that transpired on October 15, 1987 with respect to the dishonored CBC Check in the amount of P3,267,911.10 (Exhibit E), which likewise reached the Quezon City Treasurer’s Office thru a statement of checks signed by accused Enriquez (Exhibit P), then it can logically be presumed that during the months of September and October, 1987, both accused Enriquez and Espinosa were already aware of an impending shortage in their accountabilities in the neighborhood of P3-million and were attempting to conceal or cover-up this shortage through the same modus operandi. Misspped

The audit examination which was conducted on December 1, 1987 (Exhibit D) covered the period from May 4, 1987 to November 30, 1987. The shortage of P3,178,777.41 was arrived at as follows:

It would appear probable, therefore, that even as early as May and prior to October 15, 1987, the shortage had already existed in the municipal accounts, traceable to and aggravated by over-recording/under-recording of withdrawals, under-remittance/over-remittance or collections, over-recording of deposits, over-footing of expenditures, over-footing/underfooting of collections and, most importantly, the dishonored CBC Check for P3,267,911.10 (Exhibit E). Since the total accountability of P7,475,651.30, as found by the audit team less cash and valid cash items amount to P4,296,873.89 still resulted in a shortage of P3,178,777.42 then the only logical and plausible conclusion to be arrived at is that collections were, indeed, short between May 4, 1987 and November 30, 1987 and, consequently, efforts had to be exerted by accused Enriquez and Espinosa, even including resort to extra-legal measures, to conceal and/or cover-up the missing public funds. Naturally, such measures can only be resorted to and utilized by the personnel therein who would be held responsible for any shortage that would ultimately be found. They are accused Enriquez, the primary accountable officer, being the municipal treasurer, and accused Espinosa and the late accused Belinda Tuaño-Santos, whom he had designated as Cashier and Assistant Cashier as early as December 3, 1984 (Exhibit C-1), and who performed the duties appurtenant thereto despite the appointment of Imelda San Agustin as Cashier on July 1, 1987 (Exhibit 1-Espinosa). As to why accused Enriquez still allowed accused Espinosa, and the late accused Santos, whose actual appointments were those of Administrative Officer I and Revenue Collection Clerk, respectively (Exhibits C and A), to continue discharging the duties and functions of Cashier and Asst. Cashier after July 1, 1987, only he can explain. The burden, likewise, is on him to explain why he allowed all three of them (San Agustin, Espinosa and Santos) to perform over-lapping work and permitted a situation to arise where accountability could not be pin-pointed for collections, cash-counts and remittances." Spped

"As reflected on the record, accused Enriquez and Espinosa were engaged in mutual recriminations, with the former pointing to the latter, and the latter pointing to the former and Imelda San Agustin, as the ones responsible for the irregular entry and receipt of the dishonored CBC Check for P3,278,161.10 (Exhibit E) as part of the municipal collections, with accused Enriquez even denying his signatures/initials on the check itself and the statement of check (Exhibit P), through which said dishonored check was remitted to the Quezon City Treasurer’s Office. But, as We have previously pointed out, for purposes of the instant prosecution, it is completely and entirely immaterial and irrelevant as to who received said CBC check and who remitted the same as part of the municipal collections. What should be explained is why no official receipt was issued therefor and wherein will be seen the nature and purpose for the issuance of the check and why it had to be utilized for covering up shortages already existing in the municipal treasury’s collections.

There being no evidence on record to the contrary, then We can logically presume that the dishonored check (Exhibit E) had been utilized for either of these objectives, to wit: (a) it was surreptitiously encashed with the municipal treasury through a revenue collection clerk or someone performing collection tasks, most probably accused Santos, and after which the check was included in the Daily Statements of Collections, or (b) it was borrowed from the account holder, Leonora Reyes, or from one D. Noble who was in possession thereof, for the specific purpose of covering-up missing collections in the municipal treasury. Either way, the transaction was irregular and improper, as were other transactions in said office. As pointed out by Auditor Antasuda in her Memorandum for the Chairman, COA, dated July 15, 1988 (Exhibit F-1), the audit examination revealed that not all the checks in the municipal treasury were deposited intact; there were delayed deposits of collections; it took one month or more for collections to be deposited with the District Treasurer; the cash balances always exceeded the cash reserve limit; cash was transferred from one fund to another with check collections being used to replace the transferred cash; there were loose controls and no control records in the handling of dishonored checks, and delayed issuance of receipts on check payments, among many other defects and deficiencies (Exhibit F-1 a)."4 [OR, p. 948-957.]

In Diaz vs. Sandiganbayan,5 [302 SCRA 118 (1999).] this Court held:

"Generally, the factual findings of the Sandiganbayan are conclusive upon this Court but there are established exceptions to that rule, such as, sans preclusion:, when (1) the conclusion is a finding grounded entirely on speculation, surmise and conjecture; (2) the inference made is manifestly an error or founded on a mistake; (3) there is grave abuse of discretion; (4) the judgment is based on misapprehension of facts; and (5) the findings of fact are premised on a want of evidence and/or contradicted by evidence on record. In these instances, this Court is bound to review the facts in order to avoid a miscarriage of justice."6 [See p. 137.]

"ART. 217. Malversation of public funds or property – Presumption of malversation. - Any public officer who, by reason of the duties of his office, is accountable for public funds or property, shall appropriate the same, 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, wholly or partially, or shall otherwise be guilty of the misappropriation or malversation of such funds or property, xxx."

The failure of the public officer to have duly forthcoming such public funds or property, upon demand by a duly authorized officer, "shall be prima facie evidence that he has put such missing funds or property to personal use."

(a) That the offender is a public officer.

(b) That he has the custody or control of funds or property by reason of the duties of his office.

(c) That those funds or property are public funds or property for which he is accountable.

(d) That he appropriated, took, misappropriated or consented or, through abandonment or negligence, permitted another person to take them.7 [Nizurtado vs. Sandiganbayan, 239 SCRA 33 (1994).]

"The shortage is accounted for as follows:

Q: Now, your examination covered the months from May to November, 1987, were you able to determine whether in May there were already missing funds from the Treasury of Pasig?

A: In our examination we cannot determine if there were missing funds prior to our cut-off date.

Q: In other words from the months of May, June, July, August and September, there was not shown or you were not able to discover whether there had been losses already during those months?

A: No sir.

Q: In your testimony last Friday you related to us that only checks were remitted from Pasig to Quezon City Treasury and the cash collections were retained in Pasig to take care of payments for local obligations, is that right?

A: Yes sir.

Q: Now, you also stated that you were not able to determine whether checks or cash or whether just cash was supposed to have been lost; is that right?

A: Yes sir.

Q: Now, if a check, as you also said is payable always to the Municipal Treasury of Pasig, is that right?

A: Yes sir.

Q: If a check was lost, the record of the Municipal Treasurer of Pasig would record the payment as record the obligations of the payee as unpaid; is that right?

A: When was the check was lost.

Q: Supposing a check was paid to the Municipal Treasurer of Pasig was lost or was not encashed?

JUSTICE ESCAREAL:

Q: While in the possession of?

ATTY. SANCHEZ:

Q: Of the Treasurer of Pasig, meaning it did not enter the cash collections, the encashment of the checks did not enter the treasurer of Pasig would not the obligation for which that amount in check was paid be recorded as still unpaid?

A: I would like to clear that. When payments are made in the Municipal Treasurer of Pasig through checks it is automatically issued an official receipt for that payment and the check and. and the fact that it is already issued an official receipt it follows that the taxpayer had already paid the amount of his tax.

JUSTICE ESCAREAL:

Q: In this particular case, did you find any official receipt issued for the check?

A: None, Your Honor. There has been no official receipt issued to that particular check.

Q: In the name of the drawer Dean Noble you did not find any official receipt?

A; No sir.

Q: There was no receipt for Mr. Noble in the record of the Treasury of Pasig?

A: None, Your Honor.

JUSTICE ESCAREAL:

You may now proceed.

ATTY. SANCHEZ:

Q: Now, if these cash collections were lost where the object of whatever manipulation that was done according to the charge in this case only cash collections is not the basis of your statement in your recommendation number 1 in Exhibit F, your report is not the basis of that recommendation of yours the fact that these cash collections were lost?

A: In our examination, sir the result that the shortage was on a check corresponding to the amount of the check and it is that check which we disallowed so we do not know if it was cash or it was that check that was cashed that was taken only that we know that it was that check that we disallowed in audit and it is that check that resulted in the shortage."11 [TSN dated September 18, 1990, pp. 14-17, underscoring supplied.]

"The cashbook that they examined covered the months of May to November 1987 and they conduct cash examinations twice a year. Based on their review, Auditor Diche conducted two cash counts from May to November 1987, one in September 23, 1987 and another on October 9, 1987 but she does not know what were the results of her cash counts. They were not able to find out as to when the check (Exhibit E) was actually entered in the municipal treasury because the collection voucher does not bear any collection pertaining to said check. Neither were they able to discover whether there had been losses during the months from May to September 1987. In fact, there has been no official receipt issued for the said check. They did not find anything irregular in the statements of checks turned over to them by Imelda Augustin.xxx"12 [OR, p. 901-902.]

"At this juncture, it may not be amiss to state that considering the gravity of the offense of Malversation of Public Funds, just as government treasurers are held to strict accountability as regards funds entrusted to them in a fiduciary capacity, so also should examining COA auditors act with greater care and caution in the audit of the accounts of such accountable officers to avoid the perpetration of any injustice. Accounts should be examined carefully and thoroughly "to the last detail," "with absolute certainty" in strict compliance with the Manual of Instructions. x x x."