In The Honorable Office of the Ombudsman v. Angeline A. Rojas, the Supreme Court clarified the distinction between grave and simple misconduct for public officials. The Court ruled that while Rojas and Cano were negligent in handling public funds by placing them in investments not authorized by the Lung Center of the Philippines’ (LCP) Board of Trustees, their actions did not amount to grave misconduct because there was no evidence of corruption, bad faith, or a willful intent to violate the law. Instead, they were found guilty of simple misconduct and were suspended, underscoring the importance of due diligence and adherence to regulations in public service, even in the absence of malicious intent.

When Good Intentions Lead to Misconduct: The Saga of LCP’s Funds

This case revolves around the administrative liabilities of Angeline A. Rojas, the Budget and Accounting Division Chief of the Lung Center of the Philippines (LCP), and Albilio C. Cano, the Ancillary Department Manager, concerning the handling of funds realigned for the hospital’s rehabilitation. The central issue arose when these officials, along with the Executive Director Fernando Melendres, invested a portion of these funds in the Philippine Veterans Bank (PVB) through an Investment Management Agreement (IMA), despite lacking explicit authorization from the LCP’s Board of Trustees. This action prompted a complaint from Jose Pepito M. Amores, alleging grave misconduct due to the purportedly unauthorized investment and concealment of the transaction.

The case originated after a fire necessitated the realignment of P73,258,377.00 for the Lung Center of the Philippines’ rehabilitation, approved by the Department of Budget and Management (DBM). Cano and Melendres initially requested the issuance of a manager’s check to transfer these funds, followed by a request to the Office of the Government Corporate Counsel (OGCC) for evaluating a draft Investment Management Agreement (IMA) with PVB. Ignoring the pending OGCC evaluation, LCP proceeded to deposit the funds with PVB, earning interest over several rollovers, which Rojas signed off on. This series of transactions triggered an investigation and subsequent charges of grave misconduct against the involved officials.

The Ombudsman initially found Melendres, Cano, and Rojas guilty of grave misconduct, ordering their dismissal. However, the Court of Appeals (CA) reversed this decision, finding no ill will or deliberate intent to misappropriate funds. Dissatisfied, Amores and the Ombudsman appealed to the Supreme Court, leading to a consolidated review of the case. At the heart of the matter was whether the actions of Rojas and Cano constituted grave misconduct, warranting severe administrative penalties, or if their conduct merited a lesser charge. A critical aspect of the legal analysis centered on the interpretation of their intent and whether their actions demonstrated corruption, flagrant disregard of established rules, or willful intent to violate the law.

In analyzing the case, the Supreme Court considered several critical factors. First, the Court noted that the funds were eventually used for their intended purpose, LCP’s rehabilitation. Additionally, the Court considered the fact that the OGCC was consulted, suggesting an absence of intent to conceal wrongdoing. However, the Court also emphasized that the January 30, 2002 Board Resolution authorized investment in treasury bills or deposits in government banks, not IMAs or special savings accounts. The legal framework for determining administrative liability hinges on the presence or absence of specific elements that distinguish between simple and grave misconduct. The Court highlighted the definitions of misconduct, differentiating between simple and grave forms based on the presence of corruption, flagrant disregard of rules, or willful intent to violate the law.

In its assessment, the Supreme Court differentiated between grave and simple misconduct. Grave misconduct requires proof of corruption, flagrant disregard of established rules, or willful intent to violate the law. Simple misconduct, on the other hand, involves a transgression of established rules without these elements. The Court found that neither corruption nor flagrant disregard was evident in Rojas’s and Cano’s actions. The Court reasoned that the absence of personal gain or corrupt motives, along with the consultation with the OGCC, undermined the allegation of corruption. The Court also clarified that the SARO and board resolution, while not fully adhered to, did not constitute laws or rules that would indicate a flagrant disregard thereof.

The Court referenced relevant jurisprudence to define the scope and elements of misconduct. For instance, it cited cases defining misconduct as a transgression of established rules, particularly unlawful behavior or gross negligence by a public officer. Further, the Court emphasized that for an act to constitute grave misconduct, the elements of corruption, flagrant disregard of an established rule, or willful intent to violate the law must be proved by substantial evidence. Citing Office of the Ombudsman-Visayas, et al. v. Castro, 759 Phil. 68, 78 (2015), the Court reiterated that misconduct is generally defined as:

a transgression of some established and definite rule of action, more particularly, unlawful behavior or gross negligence by a public officer.

Despite absolving Rojas and Cano of grave misconduct, the Court found them liable for simple misconduct, emphasizing that public officers must exercise ordinary care and prudence when handling public funds. Their failure to secure explicit authorization for the IMA or special savings account, along with the lack of a clear agreement detailing PVB’s treatment of the funds, demonstrated negligence. The Court emphasized that public office entails a duty to act prudently and in accordance with established regulations. Moreover, Rojas and Cano could not excuse their actions by claiming they were merely following orders, as their positions required discretion and independent judgment. The Court stated that:

Public funds, after all, are the property of the people and must be used prudently at all times with a view to prevent dissipation and waste.

In line with these principles, the Supreme Court modified the CA’s decision. The Court found Rojas and Cano guilty of simple misconduct and imposed a three-month suspension without pay. The Court underscored that their actions, while not rising to the level of grave misconduct, demonstrated a negligent approach to handling public funds, warranting administrative sanctions. This decision reflects a balance between holding public officials accountable and acknowledging the absence of malicious intent in their actions. The outcome underscores the importance of adherence to established protocols and due diligence in the management of public resources. By differentiating between grave and simple misconduct, the Court provided clarity on the standards of conduct expected of public officials.

FAQs

What was the key issue in this case?	The key issue was whether Angeline A. Rojas and Albilio C. Cano were guilty of grave misconduct for investing public funds in an unauthorized manner. The Supreme Court clarified the distinction between grave and simple misconduct in public office.
What is grave misconduct?	Grave misconduct involves corruption, flagrant disregard of established rules, or willful intent to violate the law. These elements must be proven by substantial evidence to warrant a finding of grave misconduct.
What is simple misconduct?	Simple misconduct is a transgression of established rules without the elements of corruption, flagrant disregard, or willful intent. It is a less severe offense than grave misconduct.
Why were Rojas and Cano not found guilty of grave misconduct?	The Court found no evidence of corruption, bad faith, or willful intent to violate the law in their actions. While they acted negligently, their actions did not meet the threshold for grave misconduct.
What penalty did Rojas and Cano receive?	The Supreme Court found Rojas and Cano guilty of simple misconduct and imposed a three-month suspension without pay. If suspension is no longer feasible, they will be fined an equivalent amount.
What does SARO mean?	SARO stands for Special Allotment Release Order. It is a specific authority issued to agencies to incur obligations not exceeding a given amount during a specified period for a specific purpose.
What was the role of the OGCC in this case?	The Office of the Government Corporate Counsel (OGCC) was consulted regarding the investment. The consultation suggested an absence of intent to conceal wrongdoing.
What was the basis of the board resolution in question?	The January 30, 2002 Board Resolution authorized investment in treasury bills or deposits in authorized government banks. It did not authorize investments in IMAs or special savings accounts, which led to the investigation.

The Supreme Court’s decision serves as a reminder of the importance of diligence and adherence to regulations in public office. Public officials must act prudently and seek proper authorization for their actions, even when motivated by good intentions. This case highlights the fine line between simple negligence and serious administrative offenses, guiding future assessments of misconduct in public service.

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: THE HONORABLE OFFICE OF THE OMBUDSMAN VS. ANGELINE A. ROJAS, G.R. NOS. 209296-97, July 24, 2019