CASE DIGEST: Delos Santos v. COA

G.R. No. 198457 : August 13, 2013

FILOMENA G. DELOS SANTOS, JOSEFA A. BACALTOS, NELANIE A. ANTONI, and MAUREEN A. BIEN,Petitioners, v. COMMISSION on AUDIT, represented by its Commissioners, Respondent.



Sometime in October 2001, then Congressman Antonio V. Cuenco (Cuenco) of the Second District of Cebu City entered into a Memorandum of Agreement (MOA) with the Vicente Sotto Memorial Medical Center (VSMMC or hospital), represented by Dr. Eusebio M. Alquizalas (Dr. Alquizalas), Medical Center Chief, appropriating to the hospital the amount of P1,500,000.00 from his Priority Development Assistance Fund (PDAF) to cover the medical assistance of indigent patients under the Tony N' Tommy (TNT) Health Program (TNT Program).

Several years after the enforcement of the MOA, allegations of forgery and falsification of prescriptions and referrals for the availment of medicines under the TNT Program surfaced.

In the initial investigation conducted by the CoA, it was found out that there were unseen and unnoticeable irregularities attendant to the availment of the TNT Program. the results of which were reflected in AOM No. 2005-001 dated October 26, 2005, it was found that : (a) 133 prescriptions for vaccines, drugs and medicines for anti-rabies allegedly dispensed by Dell Pharmacy costing P3,407,108.40, and already paid by VSMMC from the PDAF of Cuenco appeared to be falsified; (b) 46 prescriptions for other drugs and medicines allegedly dispensed by Dell Pharmacy costing P705,750.50, and already paid by VSMMC from the PDAF of Cuenco likewise appeared to be falsified; and (c) 25 prescriptions for drugs and medicines allegedly issued by Dell Pharmacy costing P602,063.50 were also ascertained to be falsified and have not been paid by VSMMC.

Leonor D. Boado (Boado), Director of the CoA Regional Office VII in Cebu City, Delos Santos explained that during the initial stage of the implementation of the MOA (i.e., from 2000 to 2002) the hospital screened, interviewed, and determined the qualifications of the patients-beneficiaries through the hospitals social worker. However, sometime in 2002, Cuenco put up the TNT Office in VSMMC, which was run by his own staff who took all pro forma referral slips bearing the names of the social worker and the Medical Center Chief, as well as the logbook. From then on, the hospital had no more participation in the said program and was relegated to a mere bag keeper. Since the benefactor of the funds chose Dell Pharmacy as the sole supplier, anti-rabies medicines were purchased from the said pharmacy and, by practice, no public bidding was anymore required.

Subsequently, or on September 8, 2008, the SAT Team Supervisor, Boado, issued ND No. 2008-09-01, disallowing the amount of P3,386,697.10 for the payment of drugs and medicines for anti-rabies with falsified prescription and documents, and holding petitioners, together with other VSMMC officials, solidarily liable therefor.

Aggrieved, petitioners filed an appeal to the CoA and a motion for reconsideration, respectively, but the same were denied. Petitioner now comes to the SC via petition for certiorari.

ISSUE: Whether or not CoA committed grave abuse of discretion in finding petitioners solidarily liable for the disallowed amount.

HELD: No. Petition dismissed.

Political Law- public officers who are custodians of government funds shall be liable for their failure to ensure that such funds are safely guarded against loss or damage.

The CoA correctly pointed out that VSMMC, through its officials, should have been deeply involved in the implementation of the TNT Program as the hospital is a party to the MOA and, as such, has acted as custodian and disbursing agency of Cuencos PDAF. Further, under the MOA executed between VSMMC and Cuenco, the hospital represented itself as willing to cooperate/coordinate and monitor the implementation of a Medical Indigent Support Program. More importantly, it undertook to ascertain that [a]ll payments and releases under [the] program x x x shall be made in accordance with existing government accounting and auditing rules and regulations. It is a standing rule that public officers who are custodians of government funds shall be liable for their failure to ensure that such funds are safely guarded against loss or damage, and that they are expended, utilized, disposed of or transferred in accordance with the law and existing regulations, and on the basis of prescribed documents and necessary records.

In particular, the TNT Program was not implemented by the appropriate implementing agency, i.e., the Department of Health, but by the office set up by Cuenco. Further, the medicines purchased from Dell Pharmacy did not go through the required public bidding in violation of the applicable procurement laws and rules. Similarly, specific provisions of the MOA itself setting standards for the implementation of the same program were not observed. For instance, only seven of the 133 prescriptions served and paid were within the maximum limit of P5,000.00 that an indigent patient can avail of from Cuencos PDAF. Also, several indigent patients availed of the benefits more than once, again in violation of the provisions of the MOA. Clearly, by allowing the TNT Office and the staff of Cuenco to take over the entire process of availing of the benefits of the TNT Program without proper monitoring and observance of internal control safeguards, the hospital and its accountable officers reneged on its undertaking under the MOA to cooperate/coordinate and monitor the implementation of the said health program.

Evidently, petitioners neglect to properly monitor the disbursement of Cuenco's PDAF facilitated the validation and eventual payment of 133 falsified prescriptions and fictitious claims for anti-rabies vaccines supplied by both the VSMMC and Dell Pharmacy, despite the patent irregularities borne by the referral slips and prescriptions related thereto. Had there been an internal control system installed by petitioners, the irregularities would have been exposed, and the hospital would have been prevented from processing falsified claims and unlawfully disbursing funds from the said PDAF. Verily, petitioners cannot escape liability for failing to monitor the procedures implemented by the TNT Office on the ground that Cuenco always reminded them that it was his money.

All told, petitioner's acts and/or omissions as detailed in the assailed CoA issuances and as aforedescribed reasonably figure into the finding that they failed to faithfully discharge their respective duties and to exercise the required diligence which resulted to the irregular disbursements from Cuencos PDAF.

Petition Dismissed.