G.R. NO. 146824 - ENCARNACION E. SANTIAGO, VS. COMMISSION ON AUDIT AND THE DIRECTOR OF THE COMMISSION ON AUDIT, REGIONAL OFFICE NO. V.

Ruling

Accordingly, COA, through Director Lourdes M. Castillo of Regional Office No. V, Rawis, Legazpi City, filed with the Office of the Ombudsman a complaint on June 24, 1999 for Malversation of Public Funds against petitioner, Municipal Accountant Generoso Ortua and Cashier II Claro Pitallano. Upon a finding of probable cause against petitioner, two criminal cases were filed against her with the Regional Trial Court, Fifth Judicial Region, Branch 58, San Jose, Camarines Sur, which are still pending. In addition, an administrative case was filed on December 13, 1999 against petitioner with the Civil Service Commission, Regional Office No. V, Legazpi City, which case is still pending. In a letter [4] dated July 20, 1999, State Auditor del Rosario directed Municipal Mayor Marcel S. Pan of Goa, Camarines Sur to "withhold payment of the salary and other emoluments due Mrs. Encarnacion E. Santiago or so much thereof as may be necessary, effective immediately and to apply the said withheld amounts in full satisfaction of her x x x shortage of P3,580,378.80" pursuant to Section 37 of Presidential Decree (PD) No. 1445, otherwise known as the "Government Auditing Code of the Philippines," which provides: Sec. 37. Retention of money for satisfaction of indebtedness to government . - When any person is indebted to any government agency, the Commission [on Audit] may direct the proper officer to withhold the payment of any money due such person or his estate to be applied in satisfaction of the indebtedness. [5] Due to the directive of State Auditor del Rosario, petitioner was not able to collect her salary for the period from October 1998 to July 1999. After five (5) checks in payment of her salary were issued, the Municipal Mayor of Goa, Camarines Sur, endorsed the checks and the proceeds thereof, in the total amount of P124,606.20, was used to pay petitioner's cash shortage, which is evidenced by official receipts [6] of the Republic of the Philippines. In a letter dated January 7, 2000 to the COA Director of Regional Office No. V, Legazpi City, petitioner requested reconsideration of the directive to withhold payment of her salary and other emoluments. She asserted that there is no valid basis for the application of her salary, without her consent, to the unconfirmed accountability, and that there is no final judicial order that she incurred such accountability, citing as legal basis Villanueva v. Tantuico, Jr . [7] In a First Indorsement dated January 25, 2000, COA Regional Office No. V denied petitioner's request for reconsideration on the ground that the ruling in Villanueva is not applicable in this case. It anchored its decision on COA Decision No. 97-084 dated January 28, 1997 and held that State Auditor del Rosario acted within the bounds of law in issuing the directive. Petitioner appealed from the denial to COA. In a letter dated March 8, 2000, COA informed petitioner to litigate the appeal in accordance with its Revised Rules of Procedure. In compli