An audit examination was conducted on the Municipal Trial Court, Guinayangan, Quezon pursuant to the Resolution of the Third Division dated August 2, 2000, directing the Court Management Office of the Office of the Court Administrator (OCA) to immediately conduct a financial audit on Clerk of Court Mrs. Elena P. Reformado due to non-remittance of Judicial collections.

In their Memorandum dated January 24, 2001, the Audit Team reported that upon their arrival at the MTC, Guinayangan, Quezon, the Team was informed that Clerk of Court Reformado was on forced leave although her leave application was not signed by Judge Designate Manuel G. Salumbides. The Team proceeded to the house of Ms. Reformado to inform her about the purpose of their travel and to require her presence in the court for the needed documents, but Ms. Reformado was not around as she was allegedly in Manila to attend to a member of a family who was confined in the hospital.

The Team went back to the court to continue with their examination of the pertinent records/documents involving cash collections/remittances and these were their findings:

xxx the Team was told by the court staff that all records/documents involving cash collections and remittances are not kept in the Court and that Mrs. Reformado is keeping them at home. The documents surrendered during that instance are the Official Receipts under Series Numbers 12589851 to 12589900 and 12589901 to 12589950 being used at present for JDF and General Fund, respectively. The said OR's were left in the custody of Mrs. Fe F. Olivera, Court Stenographer, whose only responsibility is to issue receipts to parties but the total collections for the day are being turned-over to Mrs. Reformado. The Official Receipts used for the collections of Fiduciary Fund were being kept by Mrs. Reformado.

Based on the official receipts presented, the unremitted cash collections at the time of the cash count amounted to Two Thousand Ninety Pesos (P2,090.00) xxx

In order to complete the records and to finalize the audit, the Team gave them a Checklist of Requirements to be forwarded to the Fiscal Monitoring Division immediately upon the return of Mrs. Reformado.

Records will show that the last audit conducted at the Municipal Trial Court of Guinayangan, Quezon covered the period April 1985 to May 31, 1991 with then Amelita O. Laduan as Clerk of Court and found her cleared of all her accountabilities. The audit covering the incumbency of Elena P. Reformado was confined only to collections/deposits/withdrawals on the Judiciary Development Fund for the period June 1, 1991 to present as well as the Clerk of Court General Fund and the Clerk of Court Fiduciary Fund for the period June 1995 to present.

The legal fees being collected by the subject court are the following:

1. Clerk of Court Fiduciary Fund
2. Clerk of Court General Fund
3. Judiciary Development Fund

Based on the Subsidiary Ledgers of the Accounting Division, Financial Management Office, Office of the Court Administrator, it was found out that Mrs. Reformado is not submitting her monthly reports of collections/deposits/withdrawals for JDF and General Fund since 1997 up to the present and has not submitted a single report for Fiduciary Fund collection.

For the non-submission of her monthly reports, the salaries and other allowances of Mrs. Reformado are being withheld. One would wonder why she was able to survive for more than one and a-half years without receiving her salary and other benefits since May 1999 with children being sent to college and a husband whose only means of income is the earnings derived from being a tricycle driver. Why she is also not so anxious to recover her accumulated salaries by simply complying with all the requirements is a puzzle for us that puts her character in a cloud of doubt.^[1]

Unable to conduct a full audit on the MTC, Guinayangan, Quezon because of Mrs. Reformado's absence who had in her possession the other pertinent documents, the Financial Audit Team was then instructed by the OCA to join the other judicial audit team assigned to the Municipal Trial Courts of Catanauan, General Luna, Lopez, Mulanay and Unisan and in the Municipal Circuit Trial Courts of San Narciso-Buenavista and San Francisco-San Andres, all within the Bondoc Peninsula of the Province of Quezon.

With respect to these courts, the Team found the inventory of the cash and other cash items in order except in the MTC of Catanauan, Quezon. In the same Memorandum dated January 24, 2001, the following were reported:

Mr. Virgilio M. Fortaleza, the Clerk of Court of the MTC, Catanauan, Quezon was not around when the Team arrived in this Court. Since Mr. Virgilio Fortaleza was not present at that time, Mrs. Norberta Fortaleza, Court Stenographer I, assisted them when they demanded that the official receipts and cash on hand be presented for inventory. It took some time before the cash and other cash items were given. xxx

The cash presented amounted to P66,800.00 as against the unremitted collections amounting to P65,170.00 resulted to an overage amounting to One Thousand Six Hundred Thirty Pesos (P1,630.00). The overage of P1,630.00 per cash count can not as yet be considered as such since the Team had not done the detailed examination of Mr. Fortaleza's cashbooks and other related documents.

Based on the Subsidiary Ledger of the Accounting Division, Financial Management Office, Office of the Court Administrator, Mr. Fortaleza was observant in the submission of Monthly Report of Collections/Deposits/Withdrawals for all funds.

On the other hand, Mr. Fortaleza was aware that he violated Administrative Circular No. 5-93 dated April 30, 1993 as amended by Administrative Circular No. 3-2000 dated June 15, 2000, Administrative Circular No. 50-95 dated October 11, 1995 and Chapter 4 Article 1 Section 111 (Vol. 1) of the Government Accounting and Auditing Manual. Regarding this matter, the Team advised him to refrain from delaying the deposits/remittance of collections.

Meanwhile, after a week of the surprise audit examination on the MTC, Guinayangan, Quezon, Ms. Reformado personally appeared before Atty. Thelma Bahia and Mrs. Verina Yap at the Office of the Court Administrator to explain her accountabilities. She confessed that she used the money for her personal needs and promised to restitute whatever amount may be established and to submit the needed documents as soon as she returned to her station. Per Audit Team's assessment, Mrs. Reformado's total accountabilities for the JDF and Clerk of Court General Fund amounted to the following:

Judiciary Development Fund:
Total Collections for the period
	from July 1991 to September 4, 2000	P 100,239.65
Less: Remittances made for the same period		33,824.50
Shortage as of September 4, 2000		P 66,415.15
Clerk of Court General Fund:
Total Collections for the period
	from June 1995 to September 4, 2000	P 82,992.54
Less: Remittance made for the same period		81,992.50
Shortage as of September 4, 2000		P 1,070.04[2]

As a result of the aforesaid Report of the Audit Team, the Court issued a Resolution dated February 6, 2001 where the Court Resolved to:

(a) NOTE the Memorandum dated 24 January 2001 of Court Administrator Alfredo L. Benipayo;

(b) RELIEVE immediately Mrs. Elena P. Reformado, Clerk of Court, MTC, Guinayangan, Quezon, of her duties as Accountable Officer;

(c) DIRECT Judge Manuel G. Salumbides to designate forthwith someone from the same court to supervise the handling of collections pertaining to the Judiciary;

(d) DIRECT Mrs. Reformado to (d-1) RESTITUTE the shortages for JDF and Clerk of Court General Fund amounting to P66,415.15 and P1,070.04, respectively; (d-2) SUBMIT the cashbooks, monthly reports and other documents regarding the collections, deposits, withdrawals, court orders and acknowledgment receipts for Fiduciary Fund to fully determine her total accountabilities for said fund; and (d-3) EXPLAIN why no disciplinary action shall be taken against her for her failure to submit her monthly reports for JDF and General Fund since April 1997 and for Fiduciary Fund since the start of collection, all within ten (10) days) days from notice hereof;

(e) DIRECT Mr. Virgilio Fortaleza, Clerk of Court, MTC, Catanauan, Quezon, to EXPLAIN within ten (10) days from notice why no disciplinary action should be imposed upon him for keeping in his possession for a long period of time the money collected pertaining to the Judiciary and for his failure to remit the same on time; and

(f) ADVISE Clerks of Court/Officers-in-Charge of the MTCs of Catanauan, General Luna, Lopez, Mulanay and Unisan and the MCTC of San Narciso-Buenavista and San Francisco-San Andres to follow strictly the Supreme Court circulars on the proper handling of Judiciary collections."^[3]

In compliance with the above resolution, Mr. Virgilio M. Fortaleza, Clerk of Court of MTC, Catanauan, Quezon gave his explanation dated March 19, 2001 which was received by the Office of the Court Administrator on March 29, 2001. Mr. Fortaleza reasoned out that he has been actually remitting his Judiciary collections to the Land Bank of the Philippines, Mulanay Branch, Mulanay, Quezon, which is about fifteen (15) kilometers away from his station since there is no Land Bank branch in his town. In order to get there, he would opt to use his own vehicle as an extra precaution to safeguard his collections. While it is true that at the time of the financial audit examination in September, 2000, he still had in his possession the Judiciary collections, this was, however, not for a long time. He explained that he would accumulate the collections first which were sometimes small, and would remit them to the Land Bank at the end of the month in order to save time and effort in traveling considering the distance, not to mention the rough roads he has to travel.

Mrs. Elena Reformado also submitted her explanation dated March 15, 2001 which was received by the OCA on April 25, 2001. She explained that she failed to remit the fees collected because she used the same to save the life of her ailing father who eventually died and to shoulder the cost of education of her three (3) children who are in college and another three (3) in high school. She asked for additional time to restitute the amount due her as she is exhausting all possible efforts to raise the money. She added that she was able to remit to the Supreme Court the amount of P25,000.00 the week after she went to see Atty. Bahia at the Supreme Court.

On July 23, 2001, Ms. Reformado filed another letter requesting for an extension of time for the restitution of the amount as she found it difficult to recover the incurred shortages. At the same time, she prayed for the lifting of the suspension of her salary which started from August, 1999 up to the present in order to alleviate her present financial distress.

All these letters/explanations were referred to the OCA for evaluation and recommendation. Acting on the Memorandum dated October 30, 2001 of the OCA, the Court issued a Resolution on November 27, 2001, with the following actions, to wit:

(a) NOTE the Memorandum dated 30 October 2001 filed by Deputy Court Administrator Jose P. Perez in compliance with the resolution of 26 June and 10 July 2001;

(b) DOCKET the report on the financial audit conducted in the MTC of Guinayangan, Quezon as A.M. No. P-01-1524 (Office of the Court Administrator vs. Virgilio M. Fortaleza, Clerk of Court, MTC, Catanauan, Quezon and Elena P. Reformado, Clerk of Court II, MTC, Guinayangan, Quezon);

(c) REPRIMAND Mr. Fortaleza with warning that a repetition of the same or similar acts in the future shall be dealt with more severely;

(d) ADVISE Mr. Fortaleza to follow strictly the Supreme Court circulars on the proper handling of Judiciary collections;

(e) SUSPEND Mrs. Reformado pending resolution of this administrative matter;

(f) DIRECT Mrs. Reformado to (f-1) fully restitute the established shortages for the JDF (P66,415.15 - P24,259.00 = P42,156.15) and the General Fund (P1,070.04); (f-2) submit to the Fiscal Monitoring Division, Court Management Office, OCA, duly validated deposit slip as proof of remittance of the amount of P24,259.00 to the JDF; and (f-3) submit to the Fiscal Monitoring Division the necessary documents for the Fiduciary Fund;

(g) GRANT Mrs. Reformado an extension of sixty (60) days from notice to restitute her shortages as directed in the resolution dated 6 February 2001; and

(h) DIRECT Acting Presiding Judge Manuel B. Salumbides, MTC, Guinayangan, Quezon, to submit the necessary documents for the reconciliation of the Fiduciary Fund and to account all the cases filed in the said court involving trust liabilities, including consignation and rental deposits, within thirty (30) days from receipt of notice hereof."^[4]

In compliance with the aforesaid resolution, particularly paragraph (h), the Acting Clerk of Court of MTC, Guinayangan, Quezon submitted the necessary documents for the reconciliation of the Fiduciary Fund including the list of cases with cash deposits as bailbond together with the undertaking of bondsmen and the accused. A summary of the list of cases are as follows:

LIST OF CASES WITH CASH DEPOSITS
Case No.	9342Name of Accu9365sed/ Crim9329e Charged	Amount Deposited	Date Deposited	O.R. No.	Depositor y Agency
8860	Edgardo Vergara/ Attempted Homicide	P 6,000.00	06-23-95		RBG
8872	Edgardo Vergara/Ser. Oral Defamation	2,000.00	08-11-95		RBG
8873	Edgardo Vergara/Ser. Oral Defamation	2,000.00	08-11-95		RBG
Cv 522	Dionisio Flores vs. Loreto Guarin, et al.	10,000.00	04-14-99	7602351	--
9197 & 9199	Remegio Beligon/ Ser. Oral Defamation	6,000.00	06-17-99	7602352	--
9180	Melojean Tajon/Violation of BP 22	2,000.00	06-28-99	7602353	--
9217	Sgt. Manding Olivar/ Ser. Oral Defamation	6,000.00	09-27-99	7602359	--
9326	Emmanuel Rufo @ Totoy/ Frustated Homicide	7,750.00	11-09-00	7602359	MTO
9342	Remegio Beligion/Ser. Oral Defamation	3,000.00	01-25-01		MTO
9365	Remegio Beligion/Ser. Oral Defamation	3,000.00	01-25-01		MTO
9329	Arsenia Anis/ Violation of Sec. 69 of PD 705	4,000.00	1-26-01	7602360	MTO
9388	Adelo Tajomar/ RIR to damage to property	3,000.00	06-26-01	14469201	LBP
9387	Edwin Villafuerte/RIR to ser. Physical injuries	4,000.00	07-16-01	14469203	LBP
9417 & 9432	Celso Noblefranca et al /Illegal fishing	12,000.00	09-20-01	14469205	LBP
9180	Melojean Tajon/ Violation og BP 22	2,000.00	11-16-01	144469207	LBP
	TOTAL	P 72,750.00

Thus, the following evaluation and recommendation of the OCAD:

The list of cases with cash deposits shows that Mrs. Reformado's accountability covered the collections from 23 June 1995 to 26 January 2001 or a total of P51,750.00. In addition, a certification by the Office of the Municipal Treasurer issued on 29 March 2001, duly signed by Adoracion T. Caparros, Municipal Treasurer and Reynaldo F. Molines, Municipal Accountant noted that there is an existing balance of P23,138.18 in the Account Code of Depository Liabilities (Bail Bond) under Trust Fund, to wit:

Beginning Balance	P 5,388.18
R. Rufo	7,750.00
R. Beligon	6,000.00
A. Anis	4,000.00 ___________
	P 23,138.18

From the data on hand, the cash bond collections deposited with the Rural Bank of Guinayangan (RBG) amounting to P 10,000.00 and those collections allegedly deposited amounting to P24,000.00, or a total of P34,000.00 should form part of the cash shortage against Mrs. Reformado representing unwithdrawn fiduciary fund. The final accountability, however, could not be still determined yet, pending submission by respondent of concrete proofs that her other accountabilities representing unwithdrawn fiduciary fund had in fact been deposited with the proper depository agencies. It is also worthy to note that some official receipts were not issued sequentially violating internal control procedure in the collection of cash.

The continuous failure of Mrs. Reformado to restitute her shortages, despite the extensions given by the Court is a clear indication that she has incurred cash shortages during the period of her accountability. Neither did she offer any explanation nor presented evidence that would exculpate her from responsibility. Her silence and inaction can be interpreted as defiance to the directives of the Court, and worse, as admission of her liability.

The Court was explicit when it held in the case of Office of the Court Administrator vs. Atty. Rodrigo B. Galo (A.M. No. P-93-989) that failure of a Clerk of Court to turn over money deposited with him and to explain and present evidence thereon constitutes gross dishonesty, grave misconduct and even malversation of public funds for which dismissal from the service with forfeiture of all leave credits and of retirement privileges and with prejudice to reappointment are clearly appropriate. Clearly, Mrs. Reformado should be held liable.

WHEREFORE, premises considered, it is respectfully recommended for consideration of the Honorable Court that Mrs. Elena P. Reformado, Clerk of Court II, MTC, Guinayangan, Quezon be DISMISSED from the service for gross dishonesty, grave misconduct and malversation of public funds while in office and that her terminal leave pay as well as her withheld salaries be forfeited and applied to her accountabilities. Likewise, respondent be declared disqualified from reemployment in any branch of the government or in any government-owned or controlled corporations. It is further recommended that the Legal Office, OCA be directed to file the appropriate criminal charges against Mrs. Reformado.

We adopt the findings and the recommendation of the OCA.

The Clerk of Court performs a very delicate function. He or she is the custodian of the court's funds and revenues, records, property and premises. Being the custodian thereof, the clerk of court is liable for any loss, shortage, destruction or impairment of said funds and property. ^[5] Clerks of Court have always been reminded of their duty to immediately deposit the various funds received by them to the authorized government depositories for they are not supposed to keep funds in their custody. ^[6] In the Report on the Financial Audit in RTC, General Santos City and the RTC & MTC of Polomok, South Cotabato, the Court emphasized the role of the clerk of court with regard to the collection of legal fees, to wit:

xxx Clerks of court are the chief administrative officers of their respective courts; with regard to the collection of legal fees, they perform a delicate function as judicial officers entrusted with the correct and effective implementation of regulations thereon. Even the undue delay in the remittances of amounts collected by them at the very least constitutes misfeasance. On the other hand, a vital administrative function of a judge is the effective management of his court and this includes control of the conduct of the court's ministerial officers. It should be brought home to both that the safekeeping of funds and collections is essential to the goal of an orderly administration of justice and no protestation of good faith can override the mandatory nature of the Circulars designed to promote full accountability for government funds.

As Clerk of Court, Mrs. Reformado is an accountable officer entrusted with the great responsibility of collecting money belonging to the funds of the Court. Regrettably, she abused the trust and confidence reposed upon her and did not perform her duty with utmost loyalty and honesty. Ms. Reformado admitted that she used the money collected to defray the cost of the hospitalization of her ailing father who eventually succumbed to death and the cost of education of her children. Mrs. Reformado's predicament evokes our sympathy, but her situation cannot justify what she has done. The money collected are government funds. She had no right to use them for her personal needs. Failure of a Clerk of Court to turn over money deposited with him or her and to explain and present evidence thereon constitutes gross dishonesty, grave misconduct and even malversation of public funds. ^[7] Nonetheless, the Court had been quite lenient with Mrs. Reformado as she was given sufficient time to be able to restitute the amount but to no avail. It is also noted that Mrs. Reformado had constantly violated the Court Circulars regarding the collection of legal fees which were formulated for the proper management of funds. Her attention was already called when her salaries had been withheld for her similar transgression as early as August, 1999 and yet, Mrs. Reformado still failed to obey the Court's orders. ^[8] Her persistent failure to restitute her shortages despite the extensions of time given and inaction to the Court's directives are inexcusable. This Court cannot tolerate nor condone any conduct which would violate the norms of public accountability, and diminish the faith of the people in the justice system. For those who have fallen short of their accountabilities, we have not hesitated to impose the ultimate penalty.

IN VIEW WHEREOF, the Court hereby orders the DISMISSAL of respondent Elena P. Reformado, Clerk of Court II, Municipal Trial Court, Guinayangan, Quezon from the service, for gross dishonesty, grave misconduct, and malversation of public funds while in office, with forfeiture of her terminal leave pay as well as her withheld salaries, the same to be applied to her accountabilities. Likewise, respondent be declared disqualified from re-employment in any branch of the government or in any government-owned or controlled corporations.

SO ORDERED.

Davide, Jr., C.J., Bellosillo, Puno, Vitug, Kapunan, Mendoza, Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio, Austria-Martinez, and Corona, JJ., concur.

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^[1] Memorandum dated January 24, 2001 from Court Administrator Alfredo L. Benipayo.

^[2] Memorandum, dated January 24, 2001.

^[3] Resolution dated February 6, 2001.

^[4] Resolution, dated 27 November 2001.

^[5] Office of the Court Administrator vs. Bawalan, 231 SCRA 408 (1994).

^[6] See Office of the Court Administrator vs. Galo, 314 SCRA 705 (1999).

^[7] Office of the Court Administrator vs. Galo, Supra.

^[8] A.M. No. 01-4-133-MTC- Re: Withholding of Other Emoluments, etc. of Clerks of Court Elsie C. Remoraza, et al. dated 7 August 2001 where the Court En Banc suspended without pay Mrs. Reformado together with some Clerks of Court, effective upon notice until they have complied with Supreme Court Circular No. 32-93 dated 9 July 1993.

Circular 32-93 requires the submission of monthly reports of collections for all funds to be sent to the Supreme Court not later than the 10th day of each succeeding month and should include among others original copy of Report of Collections and Deposits; duplicate official receipts issued and a copy of the validated deposit slip or the postal money order stub it remittance is by PMO.