OUTLINE OF ARGUMENTS/ DISCUSSIONS

PROSECUTION FAILED TO ESTABLISH THE ELEMENTS OF MALVERSATION

See elements

Last elements was not established

MAJORITY OF THE DOCUMENTARY EXHIBITS OF THE PROSECUTION ARE MERE PHOTOCOPIES

EVEN IF THEY ARE CERTIFIED TRUE COPIES, THE PERSONS WHO CERTIFIED THE SAME WERE NOT
PRESENTED

THE COA AUDIT EXAMINATION LEFT MUCH TO BE DESIRED IN TERMS OF THOROUGHNESS AND
COMPLETENESS

Importance of Audit Examination

COA Manuals

COA Final Audit Action

THE DEMAND LETTER SENT TO THE ACCUSED WAS NOT CONCLUSIVE

Liabilty?

See dates of Demand Letter

Date in the Demand Letter vs. Date of Adjustment

All that is necessary for a conviction is sufficient proof that the accused accountable officer had received
public funds or property, and did not have them in his possession when demand therefor was made
without any satisfactory explanation of his failure to have them upon demand. For this purpose, direct
evidence of the personal misappropriation by the accused is unnecessary as long as he cannot
satisfactorily explain the inability to produce or any shortage in his accounts.13 Accordingly, with the
evidence adduced by the State being entirely incompatible with the petitioner's claim of innocence, we
uphold the CA's affirmance of the conviction, for, indeed, the proof of his guilt was beyond reasonable
doubt.

The petitioner bewails the deprivation of his constitutionally guaranteed rights during the inv

It is apparent that, with other vouchers and supporting documents still found after audit, the test of
absolute certainty was not met and that various records were inadvertently left out during the audit
examination.

Section 561 of the same Manual also provides:

SEC. 561. Prohibition of incomplete examinations. — Examinations shall be thorough and complete in
every case to the last detail. Mere count of cash and valid cash items without verifying the stock of
issued and unissued accountable forms and the various records of collections and disbursements, as
well as the entries in the cashbook is not elimination at all. ... (Emphasis ours)

The audit examination conducted left much to be desired in terms of thoroughness and completeness as
disclosed by the errors that surfaced subsequently. In fact, it is not clear how long the audit examination
took. The audit team claimed that it took all of one (1) week. Their report, however, bears only one
date, July 26, 1978, and could have taken only one day.

The audit examination conducted left much to be desired in terms of thoroughness and completeness as
disclosed by the errors that surfaced subsequently. In fact, it is not clear how long the audit examination
took. The audit team claimed that it took all of one (1) week. Their report, however, bears only one
date, July 26, 1978, and could have taken only one day.
It is also to be noted that some items in petitioner's accountability were disallowed by the audit team
for lack of a pre-audit although apparently they were in payment of valid obligations of the municipality
and were subsequently passed in audit. Thus, the Sandiganbayan had occasion to observe: "The
prosecution does not dispute the legality and validity of the claims so paid but the COA auditors took to
task the accused-treasurer at the time of the audit examination for this total sum of P8,108.09 because
the vouchers covering the payment were not yet approved on pre-audit. But it is plain that the claims
were not either contested. No wonder then that accused Catalino Y. Tinga was fighting for the
recognition of these payments he made in good faith as not having been misappropriated by him in
reality" (Decision, p. 15).

Upon the attendant facts and circumstances, it has to be held that the presumption juris tantum in
Article 217 of the Revised Penal Code reading:

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.

cannot be applied in view of the reasonable doubt that the balance of P70,879.72 represents
conclusively missing funds and that petitioner-accused is, in fact, chargeable therefor. The many errors
subsequently discovered in the audit examination, even by the Sandiganbayan, raise the strong
probability that had the re-audit/review he had requested been accorded him, the remaining balance
could have been satisfactorily accounted for.

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 finds 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. Special note should be taken of the fact that
disallowances for lack of pre-audit are not necessarily tantamount to malversation in law. Imperative it
is likewise that sufficient time be given examined officers to reconstruct their accounts and refute the
charge that they had put government funds to their personal uses. Access to records must be afforded
them within a reasonable time after audit when disbursements are still fresh in their minds and not
years after when relevant official records may
It rejected the testimonial and documentary evidence advanced by petitioner which rejection was
founded on several reasons none of which can stand scrutiny. There is showing that the Sandiganbayan
failed to appreciate facts and circumstances that would have altered its conclusion, hence, it is
incumbent upon this Court to correct such mistake

no issue as to the accuracy, correctness and regularity of the audit findings and second, the funds are
missing.15 1avvphi1

The petitioners argue that the prosecution witnesses were incompetent to testify. On the one hand,
Ariesga did not actually prepare the COA Report, but merely received it from the persons who did the
actual audit and thereafter submitted it to the COA Regional Office. On the other hand, while Chan is
the head of the audit team, she did not actually conduct the cash examination and audit of Badana’s
accountabilities. In view of the incompetence of the prosecution witnesses, the Sandiganbayan should
not have admitted, much less relied on, the COA Report as its contents are all hearsay.

Deposits that are not immediately available due to withdrawal or other restrictions require separate
classification as ‘restricted cash’ or ‘temporary investments.’ They are not ‘cash’."31

In short, there was no shortage on petitioner’s cash accountability. "Evidence of shortage is necessary
before there could be any taking, appropriation, conversion, or loss of public funds that would amount
to malversation."32 The law requires that the shortage must be clearly established as a fact that over
and above the funds found by the auditors in the actual possession of the accountable officers, there is
an additional amount which could not be produced or accounted for at the time of audit.

In this case, there was absolutely no shortage as to petitioner’s cash accountability. The auditors
mistakenly included as cash items collectibles in the form of "vales" and "chits" and "disbursement
vouchers" for legitimate expenses of the municipality.
As heretofore stated, in Salamera vs. Sandiganbayan,39 we ruled that one essential element of
malversation is that a public officer must take public funds, money or property, and misappropriate it to
his own private use or benefit. There must be asportation of public funds or property, akin to the taking
of another’s property in theft. Hence, how can there be taking or misappropriation when the funds did
not even reach the hands or custody of petitioner Rueda?

No portion of his cash accountability has been malversed by him or put to his personal use.42

The petitioners cannot rely on Madarang, which merely cited the case of Dumagat v. Sandiganbayan,71
to escape liability. Dumagat is a case for malversation of funds where the evidence of shortage,
appropriation, conversion or loss of public funds was necessary, among other elements, for conviction.
In acquitting the accused, the Court pointed out that "the audit examination left much to be desired in
terms of thoroughness and completeness as there were accounts which were not considered."72 The
audit examination was done not in the official station of the accused. The accused’s other vaults that
were located in other places and the "records, receipts, and cash contained therein were not made part
of the audit report."73

Lastly, the prosecution itself admitted where the accused deposited her collections from particular
areas.

In Tinga v. People,74 again a case involving malversation of public funds, the Court ruled that the
prosecution failed to establish beyond reasonable doubt that there were actually missing funds
chargeable to the accused . The Sandiganbayan itself found the many errors committed by the COA in its
audit, by including sums which were supposed to be excluded. The Court expressly observed the
"incomplete and haphazard" manner by which the audit was conducted.

Unlike Dumagat and Tinga, however, the various irregularities found by the COA itself, and affirmed by
the Sandiganbayan, were the very ones which actually contributed to the audit team’s difficulty in
completing the audit. Significantly, nowhere does it appear that the incompleteness of the audit
pertains to its scope or that the audit team conducted the audit in a haphazard manner. The fact that
the person (Badana), who could actually shed light on the shortage the COA found, is nowhere to be
found cannot be taken against the prosecution. The undisputed accumulation of funds in Badana’s
hands, considering the amount given; the fact that the disbursement vouchers do not exactly represent
the amount of payroll to be paid; and the COA’s findings that there was a shortage merely reflect the
consequences of the petitioners’ acts or omissions and facilitated the commission of possible
malversation by Badana. Thus, undue injury was sufficiently established.

In Narciso v. Sandiganbayan,51 we said that where "there is no evidence whatever that over and above
the funds found by the auditors in his actual possession, Narciso had received the additional amount of
P14,500.00, which he could no longer produce or account for at the time of the audit, there being no
shortage, there has been no taking, appropriation, conversion, or loss of public funds; there is no
malversation." We could very well be speaking of the case of petitioner Rueda.

In the instant case, however, clues of untruthfulness in the testimony of Annie Uy Jao are abundant
while incentives for fabrication of a story [are] not wanting. The only way to eliminate any doubt in
Annie Uy Jao’s assertions would have been to find independent confirmation from the other sources, as
by way of unambiguous testimony of a competent and credible witness. Sadly, no such confirmation
could be had as the prosecution’s evidence on the most crucial elements of the crime was limited to
that testified on by Annie Uy Jao.

Thus, there is serious doubt on the existence of the fourth requisite for robbery — violence against or
intimidation of a person — in relation to the alleged February 12, 2001 incident.

The inconsistencies here between Cruz and Perez are far from trivial. At issue is precisely the
participation of an alleged conspirator whose name the prosecution did not even know for proper
indictment. Yet, where the prosecution witnesses cannot agree is also precisely how the person who
now stands accused actually participated in the commission of the offense. Their divergences are so
glaring that they demonstrate the prosecution's failure to establish Nunez's complicity.
Conviction in criminal cases demands proof beyond reasonable doubt. The burden of proof is on the
prosecution, and unless it discharges that burden the accused need not even offer evidence in his
behalf, and he would be entitled to an acquittal. Proof beyond reasonable doubt does not, of course,
mean such degree of proof as, excluding the possibility of error, produce absolute certainty.

Simply put, the conscience must be satisfied that the accused is responsible for the offense charged.

As explained in Basilio v. People of the Philippines:38

We ruled in People v. Ganguso:

An accused has in his favor the presumption of innocence which the Bill of Rights guarantees. Unless his
guilt is shown beyond reasonable doubt, he must be acquitted.

Well-entrenched in jurisprudence is the rule that the conviction of the accused must rest, not on the
weakness of the defense, but on the strength of the prosecution. The burden is on the prosecution to
prove guilt beyond reasonable doubt, not on the accused to prove his innocence.39 (Citations omitted)

The prosecution must overthrow the presumption of innocence with proof of guilt of the accused
beyond reasonable doubt. The proof against him must survive the test of reason; the strongest suspicion
must not be permitted to sway judgment.55 Even if the defense is weak, the case against the accused
must fail if the prosecution is even weaker, for the conviction of the accused must rest not on the
weakness of the defense but on the strength of the prosecution.56

The ereunder:

Elaborating on the

It is safely entrenched in our jurisprudence that unless the prosecution discharges its burden to prove
the guilt of an accused beyond reasonable doubt, the latter need not even offer evidence in his
behalf.54

Accordingly, the presumption of innocence which the Constitution guarantees the petitioner has
remained untarnished in this case for want of proof to the contrary.
The Fallo

The RTC and the CA faulted the petitioner for not offering countervailing evidence, including an audit
conducted in her own behalf. Still, it does not justify a conviction tobe handed on that ground because
the "[c]ourts cannot magnify the weakness of the defense and overlook the prosecution’s failure to
discharge the onus probandi."56

This, however, cannot be used to advance the cause of the prosecution as the evidence for the
prosecution must stand or fall on its own weight and cannot be allowed to draw strength from the
weakness of the defense. Moreover, when the circumstances are capable of two or more inferences, as
in this case, such that one of which is consistent with the presumption of innocence and the other is
compatible with guilt, the presumption of innocence must prevail and the court must acquit."57

More importantly, in malversation of public funds, the prosecution is burdened to prove beyond
reasonable doubt, either by direct or circumstantial evidence, that the public officer appropriated,
misappropriated or consented, or through abandonment or negligence, permitted another person to take
public property or public funds under his custody. Absent such evidence, the public officer cannot be
held criminally liable for malversation. Mere absence of funds is not sufficient proof of conversion; neither
is the mere failure of the public officer to turn over the funds at any given time sufficient to make even
the prima facie case. In fine, conversion must be proved.