G.R. No. 213581 , September 19, 2017
Bangko Sentral ng Pilipinas, Petitioner, vs. Commission on Audit, Respondent.

FACTS

A cash shortage of P32,701,600.00 was discovered in the accountabilities of Evelyn Yap, Bank Officer II of the BSP Cotabato Branch, during an audit in December 2005. The shortage originated from funds previously under the custody of Verlina Silo, who had transferred her cash accountability to Yap in June 2005. Upon discovery, Silo admitted via text message and subsequent affidavits that she had misappropriated the funds over five years, solely and repeatedly, for personal use. She assumed full responsibility and assigned her benefits to BSP for restitution.
The Office of the Ombudsman, in an administrative case, found Silo solely liable for dishonesty and grave misconduct and dismissed the charges against Yap and Branch Manager Perry Dequita. It noted the theft occurred before Dequita’s tenure and prior to the turnover to Yap, and found no basis for their liability. The Ombudsman also held that Yap’s failure to conduct a piece-by-piece count of the massive P988 million turnover was not negligent, as it was physically impractical. COA’s motion for partial reconsideration was denied.

ISSUE

Whether the Commission on Audit gravely abused its discretion in holding Yap and Dequita jointly and solidarily liable for the cash shortage despite the Ombudsman’s prior exoneration and Silo’s clear admission of sole culpability.

RULING

Yes. The Supreme Court granted the petition and reversed the COA Decision and Resolution. The Court found that COA committed grave abuse of discretion. The legal logic rests on the principles of due process and the conclusive nature of the Ombudsman’s factual findings in administrative cases.
First, COA violated the petitioners’ right to due process. The COA proceedings that led to the liability were essentially a “money claim” adjudication under its 2009 Revised Rules. In such proceedings, due process mandates that parties be notified of the claims and be given an opportunity to present their defense. Here, COA issued the Notice of Charge directly to Yap and Dequita, demanding payment without initiating a formal petition for money claim as required by its own rules. This deprived them of the procedural safeguards, such as filing an answer and presenting evidence, which constitute the essence of administrative due process as outlined in Ang Tibay v. CIR.
Second, COA disregarded the factual conclusions of the Office of the Ombudsman, which has primary jurisdiction over administrative cases against public officials. The Ombudsman, after investigation, found Silo as the sole perpetrator and absolved Yap and Dequita of any administrative liability, including negligence. These factual findings are accorded respect and finality. COA provided no substantial evidence to overturn this determination. Holding Yap and Dequita liable based solely on their official designations as accountable officers, despite the established fact that the loss was due solely to Silo’s criminal acts, was arbitrary and capricious. Therefore, COA’s act of imposing solidary liability without a proper proceeding and against conclusive evidence constituted grave abuse of discretion.