Fajardo vs. People

The Supreme Court held that the Sandiganbayan correctly affirmed the conviction of a public officer for malversation of public funds where the accused failed to rebut the statutory presumption of misappropriation arising from her failure to account for missing funds upon demand, and that extrajudicial admissions made during administrative investigations without counsel are admissible in criminal proceedings since the right to counsel is not imperative in administrative inquiries.

Angelica Anzia Fajardo served as Cashier V and designated Officer-in-Charge, Division Chief III of the Prize Payment (Teller) Division, Treasury Department of the Philippine Charity Sweepstakes Office (PCSO). In this capacity, she exercised supervision over paying tellers, instituted prize payment procedures, and was authorized to draw cash advances of up to P3,000,000.00 for the payment of sweepstakes and lotto prizes and the PCSO-Pacific Online Systems Corporation Scratch IT Project. Following complaints regarding delays in prize payments, the PCSO Internal Audit Department conducted spot audits on November 13, 2008 and January 8, 2009, revealing shortages of P218,461.00 and subsequently P1,877,450.00, respectively. Fajardo failed to report for work immediately after the first audit and, upon her return, could not explain the missing funds despite being given opportunities to do so.

• Fajardo was the Cashier V and designated Officer-in-Charge, Division Chief III of the Prize Payment (Teller) Division, Treasury Department of PCSO, exercising supervision over paying tellers and authorized to draw cash advances up to P3,000,000.00.
• On November 13, 2008, the PCSO Internal Audit Department conducted a spot cash audit following complaints about delayed prize payments, revealing a shortage of P218,461.00 from her P3,000,000.00 accountability.
• Fajardo did not report for work on November 14, 2008, and extended her leave until January 7, 2009.
• On November 16, 2008, a co-employee Carlos Lector was seen in Fajardo's workstation with the lights out; consequently, Fajardo's vault was sealed on November 17, 2008.
• On January 8, 2009, a second spot audit conducted in Fajardo's presence revealed a total shortage of P1,877,450.00, including the disappearance of P1,621,476.00 in cash and P37,513.00 in checks previously presented during the first audit.
• Fajardo turned over only P20,000.00 remaining in her vault.
• On January 13, 2009, the audit team issued a demand letter requiring Fajardo to return the missing funds and explain the shortage within 72 hours.
• On January 15, 2009, Fajardo wrote a letter requesting more time to respond and expressing willingness to settle the matter.
• On January 27, 2009, Fajardo wrote a letter acknowledging her mistake, admitting liability for the missing funds, and offering to settle by waiving her monetary benefits and paying P300,000.00.
• The PCSO Legal Department found a prima facie case against Fajardo and recommended charges for Serious Dishonesty, Grave Misconduct, Gross Neglect of Duty, and Conduct Prejudicial to the Best Interest of the Service, without prejudice to the criminal charge for Malversation of Public Funds.

• Fajardo contended that the Sandiganbayan erred in upholding her conviction because the letters dated January 15 and 27, 2009 were involuntarily written and inadmissible as they were obtained in violation of her rights to counsel and against self-incrimination.
• She argued that she was tricked into writing the admission letters while confused, helpless, and vulnerable after being confronted with audit results.
• She claimed that the spot cash audits were attended with serious irregularities, including the failure to include vale sheets, unreplenished winning tickets, and other cash items, and she was not given opportunity to balance her books before examination.
• She asserted that the sealing of her vault four days after the first audit violated COA guidelines and that the shortage was due to pilferage, robbery, or theft committed by co-employee Carlos Lector.
• She argued that the prosecution failed to prove that the loss of P1,621,476.00 in cash and P37,513.00 in checks occurred during her custody, as these items were missing when the vault was sealed during her absence.

• The People of the Philippines, through the Office of the Ombudsman, argued that all elements of malversation were established: Fajardo was a public officer with custody of public funds, and she failed to account for the missing funds upon demand, giving rise to the presumption of misappropriation which she failed to rebut.
• The respondent maintained that the right to counsel is not imperative in administrative investigations, and Fajardo's letters were voluntarily written without any compulsion or incriminatory questions propounded to her.
• The respondent asserted that Fajardo's retraction of her admissions in her counter-affidavit before the Ombudsman was an afterthought deserving no probative value.
• The respondent argued that the presumption of regularity in the performance of official duty attaches to the audit conducted by the IAD, and Fajardo's failure to object to the audit conduct in her letters estopped her from raising these issues belatedly.

• Procedural Issues: Whether the Sandiganbayan correctly admitted Fajardo's letters dated January 15 and 27, 2009 despite her claim that they were involuntarily given and in violation of her constitutional rights to counsel and against self-incrimination.
• Substantive Issues:
  • Whether the elements of Malversation of Public Funds under Article 217 of the RPC were established.
  • Whether the presumption of malversation applies when a public officer fails to account for missing funds upon demand.
  • Whether alleged irregularities in the conduct of the spot audits invalidate the finding of shortage.
  • Whether Fajardo successfully rebutted the presumption of misappropriation by attributing the loss to theft by a co-employee.

• Procedural: The Supreme Court ruled that the letters were admissible. The right to counsel under Section 12 of the Bill of Rights applies only to custodial criminal investigations, not administrative inquiries, following Carbonel v. Civil Service Commission. A party in an administrative inquiry may or may not be assisted by counsel, and no duty rests on the administrative body to furnish counsel. Regarding the right against self-incrimination under Section 17, Article III, the Court held that this right can be claimed only when a specific incriminatory question is actually put to the witness, not when the witness voluntarily writes a statement. Since there was no compulsion from PCSO and no incriminatory questions propounded, and the letters appeared voluntarily written, there was no violation. The Court further held that Fajardo's subsequent retraction in her counter-affidavit was an afterthought viewed with disfavor and given no probative value.
• Substantive: The Supreme Court affirmed the conviction. All elements of malversation were present: Fajardo was a public officer with custody of public funds by virtue of her position as Cashier V and OIC of the Prize Payment Division; she received P3,000,000.00 in cash advances for which she was accountable; and she failed to produce the missing P1,877,450.00 upon demand. Her failure to account for the funds gave rise to the statutory presumption of misappropriation under Article 217 of the RPC, which she failed to rebut with competent evidence. The Court rejected her defense attributing the loss to theft by Lector, noting lack of evidence and failure to file a complaint against him. The Court also upheld the validity of the audits under the presumption of regularity, noting Fajardo failed to object to the audit procedure in her letters and instead acknowledged her liability. The penalty was correctly modified by the Sandiganbayan to 6 years and 1 day of prision mayor as minimum to 10 years and 1 day of prision mayor as maximum, applying RA 10951.

• Presumption of Malversation — Under Article 217 of the RPC, the failure of a public officer to have duly forthcoming any public funds with which he is chargeable, upon demand by any duly authorized officer, is prima facie evidence that he has put such funds to personal use. This presumption arises when the accused fails to account for missing funds and the burden shifts to the accused to rebut this presumption with competent evidence.
• Right to Counsel in Administrative Proceedings — Following Carbonel v. Civil Service Commission, the right to counsel under Section 12 of the Bill of Rights is meant to protect suspects during custodial criminal investigations. The exclusionary rule applies only to admissions made in criminal investigations, not administrative investigations. A party in an administrative inquiry may or may not be assisted by counsel, and no duty rests on the administrative body to furnish counsel.
• Right Against Self-Incrimination — Under Section 17, Article III of the Constitution, this right protects against testimonial compulsion. It can be claimed only when a specific question incriminatory in character is actually put to the witness, not at any other time. It does not give a witness the right to refuse to testify altogether or disregard a subpoena.
• Retractions as Evidence — Courts view retractions with considerable disfavor because they are generally unreliable and susceptible to repudiation. A retraction is considered an afterthought deserving no probative value unless special circumstances exist that raise doubts about the truth of the original testimony or statement.
• Presumption of Regularity in Official Functions — Under Section 3(m), Rule 131 of the Rules of Court, official duty has been regularly performed. This presumption applies to the conduct of spot audits by the PCSO Internal Audit Department.

• "The failure of a public officer to have duly forthcoming any public funds or property with which he is chargeable, upon demand by any duly authorized officer, shall be prima facie evidence that he has put such funds or property to personal uses."
• "However, it must be remembered that the right to counsel under Section 12 of the Bill of Rights is meant to protect a suspect during custodial investigation. Thus, the exclusionary rule under paragraph (2), Section 12 of the Bill of Rights applies only to admissions made in a criminal investigation but not to those made in an administrative investigation."
• "While investigations conducted by an administrative body may at times be akin to a criminal proceeding, the fact remains that, under existing laws, a party in an administrative inquiry may or may not be assisted by counsel, irrespective of the nature of the charges and of petitioner's capacity to represent herself, and no duty rests on such body to furnish the person being investigated with counsel."
• "The essence of the right against self-incrimination is testimonial compulsion, that is, the giving of evidence against himself through a testimonial act."
• "Courts look upon retractions with considerable disfavor because they are generally unreliable, as there is always the probability that it will later be repudiated. At most the retraction is an afterthought which should not be given probative value."

• Carbonel v. Civil Service Commission (644 Phil. 470 [2010]) — Cited for the doctrine that the right to counsel is not imperative in administrative investigations and the exclusionary rule under Section 12 of the Bill of Rights applies only to criminal investigations, not administrative ones.
• Magnanao v. People (538 Phil. 252 [2006]) — Cited for the elements of malversation of public funds and the application of the presumption of malversation when the accused fails to account for missing funds upon demand.
• Rosete v. Lim (523 Phil. 498 [2006]) — Cited for the definition of the right against self-incrimination and the requirement that the specific incriminatory question must be actually put to the witness before the right can be claimed.
• Dela Cruz v. People (739 Phil. 578 [2014]) — Cited for the principle that the essence of the right against self-incrimination is testimonial compulsion.
• People v. Zafra (712 Phil. 559 [2013]) — Cited for the doctrine that courts look upon retractions with considerable disfavor as they are generally unreliable.
• People v. Lamsen (721 Phil. 256 [2013]) — Cited for the principle that retractions are generally unreliable and only special circumstances can give them probative value.

• Article 217 of the Revised Penal Code — Defines and penalizes malversation of public funds or property, including the presumption that failure to account for funds upon demand is prima facie evidence of misappropriation.
• Section 17, Article III of the 1987 Constitution — Guarantees the right against self-incrimination and provides that no person shall be compelled to be a witness against himself.
• Section 12, Article III of the 1987 Constitution (Bill of Rights) — Guarantees the right to counsel during custodial investigation and the exclusionary rule for involuntary admissions.
• Republic Act No. 10951 — An Act adjusting the amount or value of property and damage on which a penalty is based, and the fines imposed under the Revised Penal Code; specifically Section 40 amending Article 217 regarding the penalty brackets for malversation.
• Section 3(m), Rule 131 of the Rules of Court — Provides for the disputable presumption that official duty has been regularly performed.