In Office of the Court Administrator v. Marlon Roque and Anita G. Nunag, the Supreme Court held clerks of court responsible for exercising diligence in supervising the handling of court funds. This ruling emphasizes that clerks of court, as custodians of these funds, must implement robust internal controls to prevent misappropriation, even if they have limited accounting expertise. The decision underscores the high standard of care expected from court personnel in managing public funds, ensuring accountability and preventing financial irregularities.

Oversight Overlooked: When Negligence Enables Embezzlement in Court Finances

The case revolves around the failure of Marlon Roque and Anita G. Nunag, clerks of court at the Municipal Trial Court in Cities (MTCC) of Angeles City, to adequately supervise the financial transactions handled by Cashier I Aurelia C. Lugue. Lugue was found guilty of dishonesty in a related case for misappropriating court funds through a technique known as “lapping.” This administrative case was initiated to determine whether Roque and Nunag should be held accountable for their supervisory roles that allowed Lugue’s misconduct to occur undetected. The core legal question is whether the clerks of court were negligent in their duties to monitor and safeguard court funds, thereby contributing to the financial irregularities.

Marlon Roque, who served as Officer-in-Charge (OIC) of the Office of the Clerk of Court, explained that he followed the procedures established by his predecessor and, despite his limited accounting background, believed he had adequately supervised the financial transactions. He noted that Commission on Audit (COA) auditors had not identified any shortages during his tenure. Anita Nunag, the other clerk of court, stated that she lacked thorough familiarity with accounting procedures and continued the practices of Roque and Lugue, trusting in their regularity due to the absence of adverse findings in COA audits. She claimed to have checked daily the collections received by Lugue and counterchecked entries in monthly reports, bankbooks, and books of accounts.

The Office of the Court Administrator (OCA) found both Roque and Nunag guilty of simple negligence. The OCA’s evaluation highlighted their failure to detect that Lugue was misappropriating funds through the “lapping technique.” The audit team observed that the clerks could have discovered Lugue’s machinations had they implemented a proper system of internal control. This would have included routinely examining collection details, comparing them with validated bank deposit slips, cross-checking official receipts with cash book entries, and reviewing bank statements to ensure deposits aligned with collections. The OCA emphasized that the clerks merely relied on the fact that deposited amounts equaled collected amounts, which was easily manipulated.

The Supreme Court, in its decision, concurred with the OCA’s findings, underscoring the critical role of clerks of courts as custodians of court funds. The Court highlighted that the supervision and monitoring of financial transactions by Roque and Nunag were merely perfunctory. The Court emphasized that relying primarily on monthly reports and the matching of deposited amounts to collections was insufficient to detect fraudulent activities. The Court has consistently held that individuals responsible for handling public funds must exercise a high degree of care and diligence to prevent any misappropriation or loss. It is their duty to ensure that all financial transactions are conducted with utmost integrity and in compliance with established procedures.

Furthermore, the Court dismissed the clerks’ defense of lacking accounting knowledge. Granting such a defense, the Court reasoned, would allow similarly situated employees to evade administrative liability by lightly discharging their duty of employing reasonable skill and diligence. The Court reiterated the delicate function of clerks of courts, who are entrusted with the primary responsibility of correctly and effectively implementing regulations regarding fiduciary funds. Their roles encompass those of treasurer, accountant, guard, and physical plant manager of the court, making them liable for any loss, shortage, destruction, or impairment of such funds and property.

The Court quoted the definition of “lapping” to highlight how such techniques require constant monitoring to avoid detection:

. . . a concealment technique where the subtraction of money from one customer is covered by applying the payment of a different customer. For example, a cashier may steal a payment from customer A and cover it by applying a payment from customer B to customer A’s account. Then when customer C pays, that amount is applied to customer B[‘s account] and so on. Smart crooks would never lap accounts receivable, but amateurs do not realize that the technique requires constant monitoring to avoid detection. Most lapping schemes don’t last long because of the continuous manual intervention required.

The Court then cited jurisprudence emphasizing the responsibilities of clerks of court:

They are thus liable for any loss, shortage, destruction or impairment of such funds and property. Re: Misappropriation of the Judiciary Fund Collections, 465 Phil. 24, 34 (2004).

Ultimately, the Supreme Court found Marlon Roque and Anita G. Nunag guilty of Simple Neglect of Duty and fined them each P5,000. Nunag was further admonished to closely monitor, study, and implement procedures to strengthen internal control over the financial transactions of the MTCC, Angeles City. Both were warned that a repetition of the same or similar offense would be dealt with more severely. This decision serves as a stern reminder to all court personnel handling financial matters to uphold their responsibilities with utmost diligence and vigilance.

FAQs

What was the key issue in this case?	The key issue was whether clerks of court could be held liable for simple neglect of duty for failing to adequately supervise a cashier who misappropriated court funds through the “lapping technique.”
What is the “lapping technique”?	The “lapping technique” is a method of concealing a shortage by using subsequent payments to cover previous shortfalls. It involves using payments from one customer to cover the theft of payments from another customer, and so on.
Why were the clerks of court found negligent?	The clerks of court were found negligent because they failed to implement proper internal controls, such as routinely examining collection details, comparing them with bank deposit slips, and cross-checking official receipts with cash book entries.
Can a lack of accounting knowledge excuse negligence in handling court funds?	No, the Court stated that a lack of accounting knowledge does not excuse negligence. Clerks of court are expected to employ reasonable skill and diligence in the performance of their duties, regardless of their accounting expertise.
What is the role of clerks of court in managing court funds?	Clerks of court act as custodians of court funds and are responsible for implementing regulations regarding fiduciary funds. They are considered treasurers, accountants, guards, and physical plant managers of the court.
What was the penalty imposed on the clerks of court?	Each clerk of court was fined P5,000 for Simple Neglect of Duty. One of the clerks was also admonished to improve internal control procedures.
What is the significance of this case?	This case emphasizes the importance of diligence and vigilance in handling court funds and serves as a reminder to all court personnel to uphold their responsibilities with utmost care. It reinforces the high standard of conduct expected from those entrusted with managing public funds.
What internal controls should clerks of court implement?	Clerks of court should routinely examine collection details, compare them with validated bank deposit slips, cross-check official receipts with cash book entries, and regularly review bank statements to ensure deposits align with collections.

This case highlights the critical importance of diligence and internal controls in managing court funds. Clerks of court must ensure that all financial transactions are handled with utmost care to prevent misappropriation and maintain the integrity of the judicial system. This ruling reinforces the high standard of conduct expected from those entrusted with public funds.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: OFFICE OF THE COURT ADMINISTRATOR VS. MARLON ROQUE, ET AL., A.M. No. P-06-2200, February 04, 2009