Office of the Ombudsman vs. Court of Appeals

Section 20(5) of Republic Act No. 6770 is directory, not mandatory, vesting the Ombudsman with the discretion to investigate administrative complaints filed beyond one year from the occurrence of the act or omission complained of. Additionally, decisions of the Ombudsman imposing the penalty of dismissal are immediately executory pending appeal.

Dr. Mercedita J. Macabulos, Medical Officer V and Chief of the School Health and Nutrition Unit at the Department of Education, Culture and Sports, National Capital Region (DECS-NCR), obtained a P45,000 cash advance in March 1995 for dental medicines and supplies. The liquidation of this advance, submitted significantly late and supported by a tampered invoice for items outside the DECS Dental Program, triggered an administrative complaint by Dr. Minda L. Virtudes, a supervising dentist under Dr. Macabulos. The complaint also alleged harassment after Dr. Virtudes refused to liquidate the advance, and the subsequent submission of a falsified affidavit attributed to another dentist, Dr. Antonia Lopez-Dee, to evade responsibility.

• The Cash Advance and Liquidation: Dr. Macabulos incurred a P45,000 cash advance in March 1995, intended for the DECS Dental Program. Liquidation was submitted only in September 1997, utilizing Invoice No. 3366 from Medsordent Center. A Commission on Audit (COA) Audit Observation Memorandum revealed the invoice was deliberately tampered to match the cash advance amount and included disallowed items (dentrate and castone) not part of the DECS program. The DECS-NCR Supply Officer certified the items were neither inspected nor received. Dr. Macabulos eventually reimbursed the disallowed items and the full cash advance after COA opened her account.
• The Harassment Charges: Dr. Macabulos demanded that Dr. Virtudes produce receipts to liquidate the 1995 cash advance. Upon refusal, Dr. Macabulos allegedly subjected Dr. Virtudes to harassment, including denying supply requests, imposing an extra attendance log book, threatening transfer, and issuing threats of insubordination charges and physical harm.
• The Falsified Affidavit: To evade responsibility for the cash advance, Dr. Macabulos submitted an unnotarized affidavit from Dr. Dee claiming Dr. Dee requested the advance, encashed the check, and purchased the supplies. Dr. Dee later executed a sworn affidavit disowning the statement, asserting the first page of her original affidavit had been substituted, and denying she encashed the check or purchased the supplies, as purchasing was under Dr. Macabulos's unit.

• Prescription: Petitioner argued that Section 20(5) of RA 6770 is directory and does not impose a mandatory prescriptive period that unduly restricts the Ombudsman's constitutionally mandated investigatory authority.
• Discretionary Authority: Petitioner maintained that in highly meritorious cases, the Ombudsman possesses the discretion to investigate complaints filed beyond one year from the occurrence of the act.
• Substantial Evidence: Petitioner asserted that substantial evidence proved private respondent's guilt, particularly the inculpatory sworn statement of Dr. Dee which was unrebutted.
• Execution Pending Appeal: Petitioner argued that the penalty of dismissal is immediately executory pending appeal, consistent with the uniform rule in administrative disciplinary cases.
• Intervention: Petitioner contended that the motion for intervention and reconsideration was timely filed to prevent the undue restriction of its investigatory power by a patently erroneous Court of Appeals decision.

• Prescription: Respondent countered, relying on the Court of Appeals ruling, that Section 20(5) of RA 6770 bars investigation when the complaint is filed more than one year after the occurrence of the act.
• Irregularity of Reversal: Respondent argued that the Ombudsman's reversal of the initial absolution was irregular, being based mainly on the recantation of Dr. Dee's previous statements contained in an unnotarized affidavit.
• Execution Pending Appeal: Respondent maintained, citing Lapid v. Court of Appeals, that the penalty of dismissal imposed by the Ombudsman is not immediately executory pending appeal.
• Mootness: Respondent asserted that Dr. Macabulos's retirement from government service rendered the administrative case moot and academic.

• Prescription: Whether Section 20(5) of RA 6770 imposes a mandatory prescriptive period barring the Ombudsman from investigating complaints filed beyond one year from the occurrence of the act.
• Substantial Evidence: Whether substantial evidence supports the finding of administrative liability against Dr. Macabulos.
• Execution Pending Appeal: Whether the Ombudsman's decision imposing the penalty of dismissal is immediately executory pending appeal.

• Prescription: The one-year period in Section 20(5) of RA 6770 is discretionary, not mandatory. The use of the word "may" indicates that investigation beyond one year is within the Ombudsman's discretion, consistent with its constitutional duty to investigate illegal or inefficient acts of public officials.
• Substantial Evidence: Substantial evidence supported the finding of guilt. The delayed liquidation violated PD 1445. The invoice was tampered, the items were not received by the supply unit, and Dr. Macabulos submitted a falsified affidavit from Dr. Dee to shift responsibility, which constituted dishonesty, falsification, and grave misconduct.
• Execution Pending Appeal: The penalty of dismissal is immediately executory pending appeal. The ruling in Lapid v. Court of Appeals was superseded by Administrative Order No. 14-A and Administrative Order No. 17, which amended the Ombudsman's Rules of Procedure to explicitly state that an appeal shall not stop the decision from being executory, aligning it with the Uniform Rules on Administrative Cases in the Civil Service.

• Directory vs. Mandatory Statutory Construction — The use of the word "may" in a statute is ordinarily construed as permissive or directory, conferring discretion, whereas "shall" is imperative and imposes a duty. Applied to Section 20(5) of RA 6770, the word "may" renders the one-year period discretionary upon the Ombudsman.
• Execution Pending Appeal in Ombudsman Cases — Decisions of the Ombudsman in administrative disciplinary cases are executory pending appeal. If the respondent wins the appeal, they are considered under preventive suspension and entitled to back salaries and emoluments. This is mandated by Section 7, Rule III of the Rules of Procedure of the Office of the Ombudsman (as amended by AO 17).
• Accessory Penalties for Dismissal — Under the Uniform Rules on Administrative Cases in the Civil Service, dismissal carries cancellation of eligibility, forfeiture of retirement benefits, and perpetual disqualification for reemployment. However, forfeiture of leave credits was deleted as an accessory penalty under the new Uniform Rules; thus, a retired employee found guilty of dismissal forfeits retirement benefits but retains accrued leave credits.

• "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."
• "An appeal shall not stop the decision from being executory. In case the penalty is suspension or removal and the respondent wins such appeal, he shall be considered as having been under preventive suspension and shall be paid the salary and such other emoluments that he did not receive by reason of the suspension or removal."

• Filipino v. Macabuhay, G.R. No. 158960 — Followed. Held that Section 20(5) of RA 6770 is directory and the one-year period does not bar the Ombudsman from exercising its discretion to investigate.
• Lapid v. Court of Appeals, G.R. No. 142261 — Superseded. Previously held that decisions of the Ombudsman imposing penalties other than those enumerated in Section 27 of RA 6770 are not immediately executory. This was overturned by subsequent amendments to the Ombudsman's Rules of Procedure (AO 14-A and AO 17).
• In the Matter to Declare in Contempt of Court Hon. Simeon A. Datumanong, Secretary of DPWH, G.R. No. 150274 — Followed. Established that decisions of the Ombudsman are immediately executory even pending appeal, aligning with the Uniform Rules.
• Buencamino v. Court of Appeals, G.R. No. 175895 — Followed. Reaffirmed that decisions of the Ombudsman are immediately executory pending appeal, superseding the Lapid ruling.

• Section 20(5), Republic Act No. 6770 (The Ombudsman Act of 1989) — Provides that the Ombudsman "may not conduct the necessary investigation" if the complaint was filed after one year from the occurrence of the act. Applied as a discretionary, rather than mandatory, limitation on the Ombudsman's investigatory power.
• Section 27, Republic Act No. 6770 — Governs the effectivity and finality of Ombudsman decisions, providing that findings of fact supported by substantial evidence are conclusive.
• Section 7, Rule III, Rules of Procedure of the Office of the Ombudsman (as amended by AO 17) — Explicitly provides that an appeal shall not stop the decision from being executory, thereby mandating execution pending appeal in administrative cases.
• Section 89, Presidential Decree No. 1445 (Government Auditing Code) — Requires that cash advances be reported and liquidated as soon as the purpose has been served. Dr. Macabulos's delay in liquidation violated this provision.
• Section 58, Rule IV, Uniform Rules on Administrative Cases in the Civil Service — Prescribes the accessory penalties for dismissal: cancellation of eligibility, forfeiture of retirement benefits, and perpetual disqualification for reemployment (excluding leave credits).

Puno, C.J. (Chairperson), Azcuna, Velasco, Jr., Leonardo-de Castro, JJ.