Lourdesita M. Bibas (petitioner) assails via this petition for review the Court of Appeals Resolution of June 16, 2005 dismissing her original action for certiorari and Resolution of April 6, 2006 denying her motion for reconsideration. Subject of petitioner's petition before the appellate court was the August 3, 2004 Order of the Office of the Ombudsman in Visayas (Ombudsman) finding her guilty of Dishonesty and dismissing her from government service.

Prior to her dismissal, petitioner was Disbursing Officer II in the City Treasurer's Office, Silay City. One of her duties as such included releasing of salaries for regular and casual employees of the Silay City government. Before each payday, she and her fellow disbursing officers would secure cash advances to defray the salaries, and after disbursement, they would present to their immediate supervisors the payrolls and remaining funds left in their possession. The supervisors would then issue the corresponding receipt for the returned funds.

On November 6, 2002, State Auditors Sheila S. Velmonte-Portal (Sheila) and Rogelio D. Acot (Acot) examined the cash and accounts of petitioner - the period covered by the audit is disputed by the parties. After the audit examination, Sheila sent to petitioner a demand letter inadvertently dated November 15, 2001 - the correct date being November 15, 2002 - stating thus:

x x x x

This is to inform you that in the examination of your cash and accounts as Disbursing Officer of Silay City on November 6, 2002, it was found that your cash was short by P990,341.10. This shortage was arrived at as follows:

Accountability		Cash Advance
	Unliquidated balance as of 5/31/02	P 993,337.35
	Balance per last cash exam June 6/02	383,328.91
	June 6-Nov. 6	11,525,082.55
	Sub-total	12,901,748.81
Credits to Accountability:
	Settlements June 6 - Nov. 6	11,728,822.71
Balance of Accountability		1,172,926.10
Cash & valid cash items produced by You & counted by us
		182,585.00
Shortage		P 990,341.10 ==========

In view of this, demand is hereby made of you to produce immediately the missing funds stated above. Also, please submit to us, within seventy-two (72) hours, a written explanation why this shortage occurred.

x x x x^[1] (Emphasis and underscoring supplied)

By letter of November 25, 2002, petitioner explained that sometime in November 2000, she misplaced two bundles of paid payrolls in the amounts of P498,161.58 and P491,300; that, every now and then, Commission on Audit (COA) personnel would borrow her cash book and sometimes even her paid vouchers and payrolls for checking and verification; that she discovered the loss of the two bundles after an audit conducted in November 2000, hence, she reported the same to their Treasurer and their City Accountant Arsenal who both advised her to look for them; and that having failed despite exhaustive efforts to locate the payrolls, she decided to execute an affidavit of loss.

Her assertion that the payrolls were paid, and her veiled suggestion that the persons actually responsible for the loss of the payrolls were COA personnel notwithstanding, petitioner admitted her fault in the same letter of November 25, 2002, stating that she "cannot finger point at anybody but it was all due to [her] carelessness and negligence that all of these things happened." She thus asked for a chance to settle the amount at an opportune time and appealed for a compromise to pay it against her monthly salary.

By letter of January 7, 2003, Sheila amended the amount of shortage in the cash and accounts of petitioner indicated in the November 15, 2002 letter to petitioner, explaining thus:

x x x x

This is to inform you that we are amending the amount of the shortage we have previously demanded from you from P990,341.10 to P989,461.10. The P880.00 difference was due to late posting of your October 18 refund of P880.00 per OR # 0014951 by the Accounting Department.

Accountability/Cash Advances
	Balance per last cash exam Jan. 19/00	P 0.00
	Jan. 20 - Dec. 31/00	30,927,341.91
	Jan. 1 - Dec. 31/01	33,701,037.87
	Jan. 1 - Nov. 6/02	26,666,949.56
	TOTAL	P91,295,329.34
Less: Credits to Accountability/ Liquidation and/or cash settlements:
	Jan. 20 - Dec. 31/00	P 29,937,880.81
	Jan. 1 - Dec. 31/01	33,701,037.87
	Jan. 1 - Nov. 6/02	26,484,364.56
	TOTAL	P 90,123,283.24
Balance of Accountability		P 1,172,046.10
Less: Cash and valid cash items produced by you and counted by us		182,585.00
Shortage		P 989,461.10 ==========

x x x x^[2] (Italics in the original; underscoring supplied)

This letter merited no reply from petitioner.

Sheila and Acot's report on the results of the November 6, 2002 audit, together with the Joint Affidavit dated March 18, 2003, was forwarded on April 22, 2003 by the COA to the Ombudsman for evaluation. The case was, after evaluation, docketed by the Ombudsman as OMB-V-A-03-0239-E, for Dishonesty.

By Decision of March 17, 2004, the Ombudsman, crediting petitioner's defense that her failure to account for the shortage was due to her inadvertent misplacement of the two bundles of payrolls, held her liable merely for Conduct Prejudicial to the Best Interest of the Service and imposed the penalty of six months suspension without pay.

Upon motion for reconsideration of the COA, however, the Ombudsman modified its Decision, by the challenged Order of August 3, 2004, finding petitioner guilty of Dishonesty and imposing upon her the penalty of dismissal from the service. Petitioner's motion for reconsideration of this Order was denied by the Ombudsman by Order of October 25, 2004.

Petitioner thereupon filed a petition for certiorari with the Court of Appeals which, by Resolution of June 16, 2005, dismissed it outright on procedural grounds, namely, an original action for certiorari was the wrong remedy, the proper remedy being appeal; petitioner failed to state the date she received the assailed orders; only photocopies of the assailed orders were submitted; and there was no explanation why service was not done personally.

Petitioner's motion for reconsideration of the appellate court's June 16, 2005 Resolution was denied by Resolution of April 6, 2006 for having been filed twenty-two (22) days late. Against petitioner's contention that the reglementary period should be counted from the day she personally obtained a copy of the June 16, 2005 Resolution when she visited her then counsel, and not the date when her counsel received copy thereof, the Court of Appeals echoed the rule that notice to counsel is notice to the client.

Hence, the present petition praying for the setting aside of the above-mentioned resolutions of the Court of Appeals and for the remand of the case to the appellate court for review on the merits. In the alternative, the petition prays that the decision of the Ombudsman be reversed.

To the petition the COA through counsel and the Ombudsman through the Office of the Solicitor General filed their respective comments.

In issue in this controversy is whether the Court of Appeals erred in dismissing petitioner's action for certiorari by a strict application of procedural rules and of the rule that negligence of counsel is binding on the client.

Without disputing the procedural lapses that led to the dismissal of her petition by the appellate court, petitioner proffers that a relaxation of the Rules is warranted given that 1) her case involves the penalty of dismissal from the service, 2) her petition is clearly meritorious, and 3) the lapses were solely attributable to her former counsel's negligence.

Petitioner cites Baylon v. Fact-finding Intelligence Bureau^[3] which held that the rule that a client is bound by the mistakes of counsel may be relaxed when its application would result in serious injustice. In that case, the Court considered the seriousness of the administrative penalty involved, which was suspension from public office. That was not the only circumstance, however, which the Court took into account, viz:

We find attendant in the case at bar transcendental considerations which outweigh rules of procedure thereby providing justification for the suspension of their application. Petitioner's evidence and arguments in support of her claim of innocence of the charge of grave misconduct have indeed cast doubt on the veracity of the Ombudsman's factual conclusions in the subject administrative case against her. We cannot thus simply brush aside petitioner's protestations of lack of administrative culpability for the sake of sticking to technicalities when the merits of her cause are crying out for proper judicial determination.

The tardiness of the appeal of petitioner before the Court of Appeals undoubtedly stemmed from her counsel's faux pas in the remedy pursued to assail the Ombudsman's questioned Memorandum Reviews. In the normal course of things, petitioner would have been covered by the general rule that a client is bound by the negligence or mistakes of his counsel. Yet, the patent merits of petitioner's cause for the nullification of her suspension from public office nag the Court towards the realization that to deny her the instant petition now based merely on the fiction that the counsel's negligence binds the client is to unjustly seal petitioner's fate without the benefit of a review of the correctness and justness of her imposed administrative liability. Hers, thus, is a case of an extremely different kind; the exception to the rule on the effects of the counsel's mistake or negligence, for the application of the rule would result in serious injustice to petitioner. Especially in this case where she had nothing to do with her counsel's mistake and negligence, thus clearly falling within the ambit of the reasons provided for by Ginete for the relaxation of the rules.^[4] (Emphasis and underscoring supplied)

Petitioner likewise cites Ginete v. Court of Appeals^[5] wherein the therein petitioners challenged the dismissal by the appellate court of their appeal for their failure to file their Appellants' Brief on time despite the extension given. In directing the appellate court to admit the Appellants' Brief, this Court held that "the lawyer's negligence without any participatory negligence on the part of petitioners is a sufficient reason to set aside the resolutions of the Court of Appeals."^[6] This ruling should, however, be read in the context of the other statements of the Court in the same case, to wit:

In this Court's perusal of the records of the case, it appears that the lower court disregarded and misappreciated certain documents presented by petitioners in proving filiation as allowed by the Civil Code and the Rules of Court. Second, it seems to have misapplied the established presumptions in cases of marriage and filiation. Third, the forgery of the signature of the Notary Public in one of the questioned Deeds of Sale appears to have been clearly established by petitioners and unsatisfactorily and insufficiently rebutted by private respondents.

In view of these circumstances, this Court finds it imperative for the Court of Appeals to review the findings of fact made by the trial court. For while this Court may review factual findings of the lower court, it will not preempt the Court of Appeals in reviewing the same and reappreciating the evidence presented by petitioners to resolve factual questions.

Prior resolution of the aforecited issues is necessary in order to determine the question of original ownership over the subject parcels of land which in turn would resolve the question of succession. Said questions pertain to factual matters that could best be resolved by the Court of Appeals which is mandated to examine and review the findings of fact made by the lower court.

The demands of substantial justice and fair play make it absolutely necessary for the court to completely, judiciously and satisfactorily resolve said questions of fact. Failure to give due course to the appeal and to resolve those questions might give rise to the impression that the courts may be fostering and promoting injustice if and when the appellants' or petitioners' case turns out to be meritorious.^[7] (Emphasis and underscoring supplied)

There have thus been instances when lack of participatory negligence of a party and the seriousness of the penalty imposed on it persuaded the Court to relax procedural rules as well as the time-honored rule regarding the binding effect of counsel's negligence. Alongside these considerations, the question of whether a case is meritorious, at least on its face, carries much weight in determining whether a relaxation of the rules is warranted. Indeed, it would hardly make much sense to allow a late or improperly filed appeal and disregard the rule on the binding effect of counsel's negligence when it is evident that a party is, at all events, unable to present a convincing case on the merits. In such instances, allowing the appeal to run its course would be a mere waste of time, both for the parties and the appellate court.

Aguilar v. Court of Appeals^[8] is instructive:

If the incompetence, ignorance or inexperience of counsel is so great and the error committed as a result thereof is so serious that the client, who otherwise has a good cause, is prejudiced and denied his day in court, the litigation may be reopened to give the client another chance to present his case. In a criminal proceeding, where certain evidence was not presented because of counsel's error or incompetence, the defendant in order to secure a new trial must satisfy the court that he has a good defense and that the acquittal would in all probability have followed the introduction of the omitted evidence. What should guide judicial action is that a party be given the fullest opportunity to establish the merits of his action or defense rather than for him to lose life, liberty, honor or property on mere technicalities. (Emphasis and underscoring supplied)

Interestingly, petitioner admits that "[t]he merits of [her] case have been ventilated well enough both in the Petition itself and the Reply to the Comments of [the] COA" which she filed with this Court.^[9] If she fails then to present a strong case through the pleadings she has submitted to this Court, there would be no point remanding her case to the appellate court. As will be shown below, petitioner has failed to do just that. Neither then the procedural rules nor the rule on the binding effect of counsel's negligence should be relaxed.

Petitioner nevertheless asserts that the dispute lies, not on the fact that there is a shortage in her accounts, but on when and how this shortage came about. She reiterates her claim that the shortage occurred in November 2000 - when she lost those bundles of payroll - and contrasts her own version of events with that of the COA which maintains that it uncovered the shortage during the audit of November 2002, covering a period that extended back to January 2000.

Petitioner denies that the audit period extended that far back, however, proffering that the period was only from June 6 to November 6, 2002, and that the extended period alleged by the COA was a mere insidious scheme to bring the time when the shortage occurred - which was November 2000 - within the coverage of the audit period. On this premise, she posits that the November 6, 2002 audit uncovered no shortage on her part.

Actually, the parties do not dispute that the shortage was incurred in the year 2000 and not in the period of June 6 - November 6, 2002. What is disputed is the credibility of petitioner's explanation for the shortage and whether the shortage was covered by the audit conducted in November 6, 2002.

The Court finds that the Ombudsman's refusal to credit petitioner's explanation for the shortage is supported by substantial evidence.

While petitioner had claimed, both in her November 25, 2002 letter mentioned earlier and in the August 3, 2001 Joint Affidavit she and Cashier IV Marivic S. Vingson executed, that her failure to account for the shortage was due to inadvertent loss of payrolls, the Ombudsman was persuaded otherwise by the Certification of the Office of the City Accountant of Silay City that no payrolls for the year 2000 were missing. Thus the Certification reads:

x x x x

This is to certify that all payrolls for salaries and wages for the calendar year 2000 were fully paid, all accounted for and duly recorded in the books, original copies of said payrolls were received by this office as evidenced by the attached summary.

This is to further certify that there were no lost payrolls as per our records for the calendar year 2000.

Issued this 2^nd day of June, 2004 at Silay City.

x x x x^[10]

Petitioner assails the correctness of the Certification for, by her claim, the payrolls for the year 2000 were already with the COA at the time the Certification was issued. Petitioner's claim, besides being bare, is weak, for the Office of the City Accountant could have issued the certification based on records in its possession, other than the year 2000 payrolls themselves, showing that no payrolls were missing for that year.

Petitioner goes on to assert that despite her admitted shortage due to the loss of payrolls, she could not have had an actual shortage because the salaries of employees were in fact disbursed by her. In support thereof, she points to the fact that no employee was known to have complained about non-receipt of salary for that period. While the Ombudsman initially cited this circumstance as a basis for clearing petitioner of the charge of Dishonesty, its perspective changed when it resolved COA's motion for reconsideration, as mentioned above. In its Order of August 3, 2004, it stated that petitioner's argument was no longer persuasive "because it is disclosed that she used the excess of her cash advances to meet employees' salary and cover her tracks," giving credence to the Statement of Accountability submitted by COA showing that as early as April 30, 2000 up to October 31, 2000 petitioner had an average excess cash advance of P1,000,000.^[11]

The Court finds petitioner's assertion to be specious, albeit for reasons that vary from those stated by the Ombudsman.

Petitioner claims that she had actually no shortage because the salaries of the employees were in fact disbursed. The underlying assumption of this claim is that her failure to account was only due to the alleged loss of payrolls - in other words, a mere failure to sufficiently document her actual disbursements. This, however, is what she is supposed to prove, for the import of the above-quoted Certification is that petitioner's shortage did not arise from a mere failure to document it.

The COA does not in fact dispute that the salaries of employees were all paid, as the Certification reflects. What the COA found is that, even taking into account such fact that all salaries were paid, petitioner's cash advances still exceeded her settlements. When petitioner, therefore, tried to account for this discrepancy by explaining that she completely disbursed all employees' salaries but merely lost some of the supporting documents, her explanation was clearly unsatisfactory as it failed to address the point at issue.

In another vein, petitioner posits that she could not be held liable for the shortage because the audit of November 6, 2002 covered only the period beginning June 6, 2002, thereby excluding the shortage incurred back in the year 2000. Petitioner underscores the fact that, in the period of June 6 to November 6, 2002, her settlements in the amount of P11,728,822.71 even exceeded her accountability in the form of cash advances amounting to P11,525,082.55, pursuant to the figures stated in the November 15, 2002 letter of the COA.

While petitioner goes to great lengths to prove that the audit period only extended back to June 6, 2002, she fails to state the legal basis for the conclusion she derives therefrom - that she could no longer be held liable for Dishonesty with respect to the shortage incurred in the year 2000.

Regardless of the period covered by the November 6, 2002 audit,however, petitioner is still liable for Dishonesty because the administrative case against her has not prescribed. In Filipino v. Macabuhay,^[12] a case that also involved an administrative complaint before the Ombudsman, the Court ruled:

Section 20 of R.A. No. 6770, otherwise known as The Ombudsman Act of 1989, states:

Sec. 20. Exceptions. - The Office of the Ombudsman may not conduct the necessary investigation of any administrative act or omission complained of if it believes that:

x x x x

(5) The complaint was filed after one (1) year from the occurrence of the act or omission complained of. (Emphasis supplied)

Petitioner argues that based on the abovementioned provision, respondent's complaint is barred by prescription considering that it was filed more than one year after the alleged commission of the acts complained of.

Petitioner's argument is without merit.

The use of the word "may" clearly shows that it is directory in nature and not mandatory as petitioner contends. When used in a statute, it is permissive only and operates to confer discretion; while the word "shall" is imperative, operating to impose a duty which may be enforced. Applying Section 20(5), therefore, it is discretionary upon the Ombudsman whether or not to conduct an investigation on a complaint even if it was filed after one year from the occurrence of the act or omission complained of. In fine, the complaint is not barred by prescription. (Emphasis and underscoring supplied)

A fortiori, the above ruling applies in the present case. The present complaint, which was filed with the Ombudsman on April 22, 2003, involves not only petitioner's failure to refund her shortage incurred in the year 2000, but also her misrepresentation that her shortage was only due to the loss of payrolls - an allegation which she proffered in the August 3, 2001 Joint Affidavit she executed with Cashier IV Marivic S. Vingson and in her November 25, 2002 letter to State Auditor Velmonte-Portal. As found by the Ombudsman in its Order of August 3, 2004:

Dishonesty is defined as an "intentional violation of truth" (18 Corpus Juris [CJ] 1140). It must be evident that there is a disposition on the part of respondent to misrepresent or defraud. The[r]e must be at least a showing of a deliberate intent to commit falsehood. (CSC Resolution No. 944794)

A re-evaluation of the records of the case readily shows that there exists substantial evidence for Dishonesty against the respondent. For one, respondent's main contention that she lost two bundles of payroll in the year 2000 resulting in her failure to liquidate the P989,461.10 is no longer persuasive since there is a certification of the Office of the Silay City Accountant that no payroll for the year 2000 was lost or missing. For another, the claim that she had no shortage in her accountabilities as no employee complained about non-receipt of salary is likewise no longer effective because it is disclosed that she used the excess of her cash advances to meet employees' salary and cover her tracks. Moreover, she admitted having incurred a shortage in her accountabilities.

This, and respondent's failure to produce the missing funds constitute Dishonesty.^[13](Emphasis and underscoring supplied)

At all events, petitioner's assertion that the audit period only extended back to June 6, 2002 is not persuasive.

Petitioner cites the above-quoted November 15, 2002 letter of the COA, specifically the statements "Balance per last cash exam June 6/02" and "June 6-Nov. 6" which to her show that an audit examination was conducted on June 6, 2002 and that the November 6, 2002 audit covered only the period of June 6 to November 6, 2002.

While the November 15, 2002 letter would indicate that an audit was conducted on June 6, 2002, the same letter implies that this audit covered only the very short period of June 1 to June 6, 2002, since the item "Balance per last cash exam June 6/02" is separate from "Unliquidated balance as of 5/31/02." Thus, assuming arguendo that an audit was conducted on June 6, 2002, the same appears only to be minor in nature. It would not negate the claim of the COA that the period covered by the November 6, 2002 audit extended as far back as January 2000, for the results of the June 6, 2002 audit may simply have been incorporated in the computation during the more extensive November 6, 2002 audit.

Petitioner further asserts that since the usual practice of the COA was to conduct an audit at least once every six months, the November 6, 2002 audit could not have covered the year 2000. The COA, however, has proffered a plausible explanation, viz: "Although ideally, COA auditors should conduct cash examinations at least every six (6) months, however, the interval period may be extended especially when there are other important tasks which needs to be prioritized and/or for lack of manpower which is a prevalent condition in almost all government offices."^[14]

Respecting petitioner's claim that the January 7, 2003 amendatory letter was merely an insidious scheme to make it appear that petitioner's shortage in the year 2000 was covered by the November 6, 2002 audit, the same fails.

Even the earlier November 15, 2002 letter would already reveal that the audit of November 6, 2002 was not concerned exclusively with the period of June 6 to November 6, 2002, for it explicitly took into account the outstanding balance as of May 31, 2002 in the amount of P993,337.35 and the balance computed in the "cash exam" of June 6, 2002 amounting to P383,328.91. It was precisely because these figures were taken into account that petitioner was found to have a shortage of P990,341.10 as stated in that letter.

The subsequent letter of January 7, 2003 did not, it bears noting, amend any of those figures as being incorrect. Rather, as stated in the first paragraph thereof, it merely updated the total shortage in view of the "late posting of [petitioner's] October 18 refund of P880 per OR #0014951 by the Accounting Department." While the computation that followed differed from that appearing in the earlier letter, the two can be harmonized. The later computation merely placed petitioner's outstanding liability in the larger context of her recorded accountabilities and settlements beginning January 2000.

Hence, it may be gathered from the January 7, 2003 letter that petitioner's cash advances from January 1 to November 6, 2002 totalled P26,666,949.56 and her liquidation and cash settlements for the same period yielded the same amount - if the amount of P182,585 under "Cash and valid cash items produced by you and counted by us" is added to the P26,484,364.56 appearing as credits to petitioner's accountability for that period. For January 1 to December 31, 2001, petitioner's cash advances also equaled her liquidation and cash settlements, thus canceling each other out.

For January 20 to December 31, 2000, however, the total cash advances of petitioner in the amount of P30,927,341.91 is P989,461 greater than her liquidation and cash settlements of P29,937,880.81. Thus, it may be gathered that the balance for which petitioner is now being held accountable was incurred back in the year 2000.

Both the November 15, 2002 and January 7, 2003 letters, therefore, consistently reflect that petitioner's shortage was not incurred during the period of June 6 to November 6, 2002 and that this shortage was, nonetheless, taken into account in computing petitioner's outstanding liability as of November 6, 2002. The January 7 letter was only more precise that the shortage was incurred in the year 2000, whereas the earlier letter subsumed this shortage under "Unliquidated balance as of 5/31/02". The January 7, 2003 letter could thus not have been an insidious scheme that petitioner makes it out to be.

The merits of petitioner's plea thus depends on whether she has satisfactorily accounted for her admitted shortage of P989,461.10. As priorly discussed, the Ombudsman's finding that she has not done so is based on substantial evidence, hence, it may not be disturbed.

A finding of guilt in an administrative case would have to be sustained for as long as it is supported by substantial evidence that respondent has committed the acts stated in the complaint or formal charge. Substantial evidence has been defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. This is different from the degree of proof required in criminal proceedings, which calls for a finding of guilt beyond reasonable doubt. x x x^[15]

WHEREFORE, the petition is DENIED.

SO ORDERED.

Puno, C.J., Quisumbing, Ynares-Santiago, Carpio, Austria-Martinez, Corona, Azcuna, Tinga, Velasco, Jr., Reyes, Leonardo-De Castro, and Brion, JJ., concur.
Chico-Nazario, J., on leave.
Nachura, J., no part.

---

^[1] Rollo, p. 55.

^[2] Id. at 57.

^[3] G.R. No. 150870, December 11, 2002; 394 SCRA 21.

^[4] Id. at 31-32.

^[5] G.R. No. 127596, September 24, 1998, 296 SCRA 38.

^[6] Id. at 53.

^[7] Id. at 55-56.

^[8] 320 Phil. 456, 462 (1995), citing Agpalo, Ruben E., Legal Ethics (1980 ed.), pp. 282-284.

^[9] Rollo, p. 206.

^[10] Id. at 65.

^[11] Id. at 58 and 132.

^[12] G.R. No. 158960, November 24, 2006; 508 SCRA 50, 57-58.

^[13] Rollo, p. 58-59.

^[14] Id. at 94.

^[15] Laxina, Jr. v. Office of the Ombudsman, G.R. No. 153155, September 30, 2005, 471 SCRA 542, 555.