G.R. No. 166658; April 30, 2008
Eustaquio B. Cesa, petitioner, vs. Office of the Ombudsman and Commission on Audit-Region VII, respondents.

FACTS

Petitioner Eustaquio B. Cesa, the City Treasurer of Cebu City, was administratively charged for neglect of duty. The case stemmed from a surprise audit revealing that paymaster Rosalina Badana had incurred unliquidated cash advances exceeding P18 million. The audit discovered that Badana was granted excessive cash advances without liquidating previous ones, facilitated by presenting previously credited payrolls to cover shortages. The Ombudsman found that city officials, including Cesa, failed to observe laws and rules governing cash advances, thereby enabling the defalcation.
Cesa argued before the Ombudsman that he was not the approving officer for cash advances and that his signature on vouchers was merely a requirement. He claimed he relied on his subordinates under the principle of division of labor. The Ombudsman found him guilty and imposed a six-month suspension without pay. The Court of Appeals affirmed the Ombudsman’s factual findings on negligence but modified the decision by declaring the penalty merely recommendatory to the proper city authority for enforcement.

ISSUE

The core issues are: (1) whether the Ombudsman denied Cesa due process by proceeding without a verified complaint and without furnishing him a copy of the complaint and supporting affidavits; and (2) whether the Ombudsman has the power to directly impose and enforce the penalty of suspension.

RULING

The Supreme Court denied the petition, affirming the Ombudsman’s findings and reinstating its power to directly implement administrative penalties. On due process, the Court held that the constitutional and statutory grant allowing the Ombudsman to investigate motu proprio dispenses with the requirement of a formal complaint. Any procedural infirmity was cured when Cesa actively participated by submitting counter-affidavits, cross-examining witnesses, and filing a motion for reconsideration. He was sufficiently informed of the charges through the audit report and the proceedings.
On the Ombudsman’s power, the Court ruled that Section 13, Article XI of the 1987 Constitution and Section 15 of Republic Act No. 6770 (The Ombudsman Act) empower the Ombudsman to “ensure compliance” with its disciplinary orders. The Court, citing Office of the Ombudsman v. Laja, held that this includes the direct imposition and enforcement of penalties like suspension, not merely a recommendatory power. The CA erred in modifying the decision to make the penalty recommendatory.
Substantively, the Court found Cesa negligent. As City Treasurer, he had direct control and supervision over the Cash Division and the paymasters. His duty to exercise the diligence of a good father of a family was not excused by delegation. By approving cash advance vouchers based on mere pieces of paper without particulars and failing to supervise the liquidation process, he tolerated the illegal practices that led to the massive loss of public funds. The defense of reliance on subordinates under Arias v. Sandiganbayan was inapplicable as it pertains to criminal liability for conspiracy, not administrative liability for neglect of duty.