Republic of the Philippines

Sixth Judicial Region

REGIONAL TRIAL COURT
Branch___
Iloilo City

PEOPLE OF THE PHILIPPINES, CRIMINAL CASE NO.17-719

Plaintiff,
FOR:
MALVERSATION OF PUBLIC FUNDS
Article 217 of Revised Penal Code

- versus -

VICENTE QUELESTE Y MARABARA

Accused (detained).

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MEMORANDUM FOR THE ACCUSED

VICENTE QUELESTE Y MARABARA, through the undersigned Atty. Nestor

Jeremy B. Moreno, before this Honorable Court, most respectfully submit this
MEMORANDUM as follows:
 PREFATORY STATEMENT
That on or about January 20, 2017 in Zarraga, Iloilo, Philippines, and within
the jurisdiction of this Honorable Court, above mentioned accused, Vicente
Queleste y Marabara, A Municipal Treasurer, was subjected to cash
examination of the cash and accounts from the accountable forms, by COA
Auditors Lulu Palmes and Shiela Marcela, in his office in the Zarraga Municipal
Hall, finding then and there fail to produce and to have fully forthcoming a
cash shortage the amount of NINE HUNDRED NINETY THOUSAND PESOS (P
990,000.00) which amount he allegedly willfully, unlawfully, and feloniously
took and misappropriated for his own personal use and benefit to the damage
and prejudice of the Government in the amount aforestated and to the public
interest.

STATEMENT OF FACTS
In order that this honorable court may be enlightened and guided in the
judicious disposition of the above-entitled case, cited hereunder the material,
relevant and pertinent facts of the case to wit:

1. On June 28, 2017 the Office of the Provincial Prosecutor issued a

resolution in the Inquest investigation of the case docketed as I.S. NO.
VI-11INQ-16E-00492 finding probable cause against Vicente Queleste y
Marabara and was charged with an information on June 28, 2017.

2. The complainants in this case are Lulu Palmes and Shiela Marcela, State
Auditors II of the Commission on Audit who were assigned to and
conducted the cash examination against accused, Vicente Queleste y
Marabara, the Municipal Treasurer of the Municipality of Zarraga.
3. To prove its case, the prosecution presented Lulu Palmes and Shiela
Marcela, COA State Auditors II. Both have testified that they went to
the office of Mr. Vicente Queleste, the Municipal Treasurer of Zarraga,
in the morning of January 20, 2017 from 9:00 AM to 12:00 NN, as
proved by the Request for Authority to Travel and Office Order No. 2017-
003 dated January 13, 2017, requesting to conduct cash examination
on the cash and accountabilities of Mr. Vicente Queleste.

4. Upon the conduct of cash examination on the cash and accountabilities

of Mr. Vicente Queleste, Municipal Treasurer of Zarraga, the
complainants allegedly found a shortage of P990,000 on the accused’s
accountabilities. This was stated in their Report of Cash Examination as
attached in the Information.

5. To prove the innocence of the accused, the defense presented the

following witnesses: Mr, Vicente Queleste, the accused who testified that
the same complainants went to his office to conduct a cash examination.
The complainants arrived to his office at around 9:00 AM and went
straight to his table. They told the accused that they will be conducting
the said cash examination. The accused presented all the cash in his
position as an accountable officer. The auditor Shiela Marcela counted
the cash and returned the same to him. He returned the said cash to his
vault and the auditors went to do some paperworks on their laptop.
Afterwards, the auditors asked the accused to sign a document that they
printed, but he did not sign the same immediately as he was talking to
a co-worker. Auditor Palmes excused herself and requested the accused
to sign the document for they are in hurry to leave. The accused felt
compelled to affix his signature and so he signed it. Afterwards, the
auditors left the office of the accused. That was around 12:00 NN.
 6. To further strengthen the defense of the accused, the defense presented
Mrs. Luisa Maria De Jesus, collecting officer of the Municipal Treasurer’s
Office of the Municipality of Zarraga. She testified that on January 20,
2017, she reported for work at the Municipal hall of Zarraga, Iloilo at
8:00 AM in the morning. Then at about 9:00 AM of the same day, COA
officers arrived and conducted a cash examination. She also testified
that she was not aware of the same being conducted on that very day.
She said that there was no notice or information regarding the cash
examination to be conducted by COA. She testified that she was present
at the time when the examination was conducted as she was working
on her table with her regular paperwork. She was not questioned nor
examined by the COA Auditors, together with her other two (2)
collecting officers. She further testified that the COA Officers left the
office at 12:00 NN of the same day. They never returned in the
afternoon or in any other day.

STATEMENT OF THE CASE

Criminal Case No. 17-719, the accused VICENTE QUELESTE y MARABARA is

charged of violating Article 217 of the Revised Penal Code (Malversation of
Public Funds or Property):

Art. 217. Malversation of public funds or property;

Presumption of malversation. — Any public officer who, by
reason of the duties of his office, is accountable for public funds
or property, shall appropriate the same or shall take or
misappropriate or shall consent, through abandonment or
negligence, shall permit any other person to take such public
funds, or property, wholly or partially, or shall otherwise be guilty
of the misappropriation or malversation of such funds or property,
shall suffer:
1. The penalty of prision correccional in its medium and maximum
periods, if the amount involved in the misappropriation or
malversation does not exceed two hundred pesos.chanrobles
virtual law library
2. The penalty of prision mayor in its minimum and medium
periods, if the amount involved is more than two hundred pesos
but does not exceed six thousand pesos.chanrobles virtual law
library

3. The penalty of prision mayor in its maximum period to reclusion

temporal in its minimum period, if the amount involved is more
than six thousand pesos but is less than twelve thousand
pesos.chanrobles virtual law library

4. The penalty of reclusion temporal, in its medium and maximum

periods, if the amount involved is more than twelve thousand
pesos but is less than twenty-two thousand pesos. If the amount
exceeds the latter, the penalty shall be reclusion temporal in its
maximum period to reclusion perpetua.chanrobles virtual law
library

In all cases, persons guilty of malversation shall also suffer the

penalty of perpetual special disqualification and a fine equal to the
amount of the funds malversed or equal to the total value of the
property embezzled.
 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 missing funds or property to personal use. (As
amended by RA 1060).

STATEMENT OF ISSUES
1. Whether or not all the elements of the crime have been proven beyond
reasonable doubt.
2. Whether or not the conduct of cash examination was proper, regular,
complete and in compliance with Revised Cash Examination Manual.
3. Whether or not the accused is guilty beyond reasonable doubt of the
crime charged.

DISCUSSION

All the elements of the crime of malvesation have not been proven
beyond reasonable doubt.

The crime of malversation of public funds is defined and penalized under

Article 217 of the Revised Penal Code, viz:

ART. 217. Malversation of public funds or property. Presumption

of malversation. Any public officer who, by reason of the duties of
his office, is accountable for public funds or property,
shall appropriate the same, or shall take or misappropriate or
shall consent, or through abandonment or negligence, shall
permit any other person to take such public funds or property,
 wholly or partially, or shall otherwise be guilty of the
misappropriation of malversation of such funds or property,
shall suffer:
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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 missing fund or property to personal uses.

The elements essential for the conviction of an accused under the above penal
provision are:

1. That the offender is a public officer;

2. That he has the custody or control of funds or property by reason of
the duties of his office;
3. That the funds or property are public funds or property for which he
is accountable; and
4. That he appropriated, took, misappropriated or consented or through
abandonment or negligence, permitted another person to take them.
(Agullo vs. Sandiganbayan, 414 Phil. 86 (2001)

There can hardly be no dispute about the presence of the first three elements.
The accused is a public officer occupying the position of a Municipal Treasurer
at the Zarraga Municipal Hall. In that capacity, he receives money or property
belonging to the local government for which he is bound to account. It is the
last element, i.e., whether or not the accused really has misappropriated
public funds, where the case focuses itself on.
In malversation of public funds, the prosecution is burdened to prove beyond
reasonable doubt, either by direct or circumstantial evidence, that the public
officer appropriated, misappropriated or consented, or through abandonment
or negligence, permitted another person to take public property or public
funds under his custody. Absent such evidence, the public officer cannot be
held criminally liable for malversation. Mere absence of funds is not sufficient
proof of conversion; neither is the mere failure of the public officer to turn
over the funds at any given time sufficient to make even the prima facie case.
In fine, conversion must be proved. (Legrama vs Sandiganbayan and People,
G.R. No. 178626, June 13, 2012)

In this case, the COA Auditors were never able to prove that there was
conversion on the part of the accused as regards the alleged shortage which
they determined based on a cash examination conducted against the accused.
Thus, in a string of categorical pronouncements, this Court has consistently
and emphatically ruled that the presumption of conversion incarnated in
Article 217, paragraph (4) of the Revised Penal Code is by its very nature
rebuttable. To put it differently, the presumption under the law is not
conclusive but disputable by satisfactory evidence to the effect that the
accused did not utilize the public funds or property for his personal use, gain
or benefit.

Accordingly, if the accused can present adequate evidence that can nullify any
likelihood that he had put the funds or property to personal use, then that
presumption would be at an end and the prima facie case is effectively
negated. The Court has repeatedly said that when the absence of funds is not
due to the personal use thereof by the accused, the presumption is completely
destroyed; in fact, the presumption is never deemed to have existed at all.
The cash examination was not conducted properly, regularly,
completely and in compliance with Revised Cash Examination Manual.

The landmark case of Tinga v. People (G.R. No. 57650, 160 SCRA 483) has
laid down the doctrinal standards to follow in convicting an accused charged
with malversation.

Upon the attendant facts and circumstances, it has to be held that the
presumption juris tantum in Article 217 of the Revised Penal Code reading:

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 missing funds or property to personal uses.

applies only if and when there was thorough, complete, regular, proper and
comprehensive audit examination to accountabilities of the accountable officer
to be able to determine whether there are missing funds that cannot be
explained upon demand for explanation or if there were shortage upon the
conduct of the said examination. In the same case the Court reiterated, “ [t]he
prima facie presumption under Article 217 of the Revised Penal Code arises if
there is no issue as to the accuracy, correctness and regularity of the audit
findings and if the fact that funds are missing is indubitably established," has
no application in the instant case in the light of the haphazard examination of
the cash accountability of petitioner in violation of the Manual of Instructions
of Treasurers and Auditors and the credible explanation of petitioner that the
"missing" funds would have been "discovered" if only the auditor took into
consideration the contents of the two vaults in Sindangan and Tampilisan and
the fact that her collection in Dipolog City were deposited with the NFA
Cashier. In the instant case, there was no compliance with the Revised Cash
Examination Manual of COA in the conduct of cash examination. No proper
notice or demand was made to the accused that a cash examination will be
conducted on the same date and he is demanded to produce his cash and
accountable forms.

Thus, it can only be deduced that without comprehensive and thorough cash
examination to the accountables of the accused, no prima facie presumption
of criminal liability could arise from his failure to explain the alleged shortage
of his accounts during the conduct of cash examination as the same was not
yet remitted to him during that time. Had the auditors waited for the remitting
of the same by the other collecting officers at the end of the day, the alleged
shortage would have been balanced, which will exonerate the liability of the
accused from this charge.

Also, in the same Tinga case, the Court specifically established the following:
Considering the gravity of the offense of Malversation of
Public Funds, accounts should be examined carefully and
thoroughly to the last detail, with absolute certainty in strict
compliance with the Manual of Instructions. Imperative it is
likewise that sufficient time be given examined officers to
reconstruct their accounts and refute the charge that they had put
government funds to their personal uses. Access to records must
be afforded them within reasonable time after audit when
disbursements are still fresh in their minds and not years after
when relevant official records may no longer be available and the
passage of time has blurred human memory (Tinga v. People, G.R.
No. 57650, 160 SCRA 483 [1988]). The audit examination
 conducted by Auditor Eway failed to establish that the funds were
indeed missing since she did not follow standard auditing
procedures by not including in her examination the funds
petitioner kept in the vaults located in Tampilisan and Sindangan.

Thus, it is primarily required that full audit examination be conducted to

ensure compliance with Revised Cash Examination Manual for COA Auditors.
In the instant case, only the accused was subjected to cash examination at
the time when there are other collecting officers who also have accountable
forms and cash accountabilities due to be remitted to the accused before the
end of day’s work. The cash examination was conducted only during the
morning of January 20, 2017, from 9:00 AM – 12:00 NN. No comprehensive
cash examination was conducted as the cash collections for the day due to the
accused was not yet remitted by the other three (3) collecting officers as
testified to by Mrs. Luisa Maria De Jesus, one of the collecting officers in the
Treasurer’s Office.

Accused’s signing of the audit report cannot be considered prima facie

evidence of his guilt. Following this Court’s ruling in Tinga v. People, (160
SCRA 489) petitioner’s signature thereon only meant an acknowledgment that
a demand was made, but not to the statement of her accountability as the
examination was not complete.

On Page 17, Item G, of the Revised Cash Examination Manual, the same
provides that the Auditor should examine simultaneously all funds in the
custody of the Accountable Officer and conduct cash count of all cash of the
AO in the office and its immediate vicinity. It means that there should be a
simultaneous cash count of all accountable officers of the office or agency
during the conduct of cash examinations. In the case at bar, only the accused
was subjected to the cash examination, contrary to the requirement of the
Manual. As testified to by the defense witness Mrs. Luisa Maria De Jesus, she
was not, together with her other 2 collecting officers, conducted with the cash
examination as was conducted to the accused at the time.

In the same Manual, Item M.1, it provides that the auditor is required to
conduct examinations thoroughly and completely in every case to the last
detail, including verificiation/reconciliation of accountable forms received and
issued and the various records of collections and disbursements as well as
entries in the Cashbook/CRR/CDR/CkDR or its equivalent. No such thorough
examination was conducted based on the testimonies of the complainants Ms
Lulu Palmes and Ms Shiela Marcela.

No accomplishment of the Auditor’s certification at the Cashbook/CRR/CDR or

its equivalent was made at the time of cash examination. No such certification
appears in the record.

Furthermore, in the same Manual, a Copy of the Report of Cash Examination

or General Form No. 74(A), a narrative report and its supporting exhibits and
schedules, letter of demand, and the written explanation of the AO is required
to be presented to the prosecuting officers for the purpose of prosecuting the
Accountable Officer. No such documents or certificates are on the record,
further violating the Manual which requires full compliance before charging
the Accountable Officer of Malversation of Public Funds or Property.

Also, in the same Manual, on Page 29, it requires that in case of Cash
Shortage, the Auditor must DEMAND at once from the AO the immediate
production of the missing funds the moment the amount of shortage is
definitely established and the demand must be in writing and acknowledged
as received by the AO. The same must be specific and must be given within
72 hours from his/her receipt of the letter of demand. No such proof or writing
was made part of the record. As enunciated in Tinga, “Accounts should be
examined carefully and thoroughly "to the last detail," "with absolute
certainty" in strict compliance with the Manual of Instructions. Special note
should be taken of the fact that disallowances for lack of pre-audit are not
necessarily tantamount to malversation in law. Imperative it is likewise that
sufficient time be given examined officers to reconstruct their accounts and
refute the charge that they had put government funds to their personal uses.
Access to records must be afforded them within a reasonable time after audit
when disbursements are still fresh in their minds and not years after when
relevant official records may no longer be found.”

The prosecution failed to prove the guilt of the accused beyond

reasonable doubt. Thus the presumption of innocence still stands in
favor of the accused.
All the elements of the crime, which are necessary to convict the accused of
the crime charged, were not clearly and convincingly established in the trial.
The prima facie presumption that 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 missing funds or property to personal use has not been
established in the light of the haphazard examination of the cash
accountability of petitioner in violation of the Revised Cash Examination
Manual of the Commission on Audit.

No complete, thorough, regular, and comprehensive cash examination was

conducted against the accused as mandated by the said Manual. As such, The
presumption was not established. Accordingly, if the accused is able to present
adequate evidence that can nullify any likelihood that he had put the funds or
property to personal use, then that presumption would be at an end and the
prima facie case is effectively negated. This Court has repeatedly said that
when the absence of funds is not due to the personal use thereof by the
accused, the presumption is completely destroyed; in fact, the presumption is
never deemed to have existed at all. Hence, the prosecution miserably failed
to establish the essential elements of the crime of Malversation as penalized
under Article 217 of the Revised Penal Code. All told, the guilt of the accused
was not proven beyond reasonable doubt.

PRAYER

WHEREFORE, it is respectfully prayed for of this Honorable Court that

judgment be rendered acquitting the accused from the crime charged.

Defendants likewise prays for such other and further relief as this honorable
court may deem just and equitable in the premises.

RESPECTFULLY SUBMITTED.
Iloilo City, Philippines, March 23, 2018.

ATTY. NESTOR JEREMY B. MORENO

Moreno and Jalipa Law Office
Roll No. 1235 / 5-2-07
IBP. No. 6789 / 12-29-07
MCLE Exempt
PTR Exempt
Copy furnished:

ATTY. DEANNE MITZI SOMOLLO

Office of the Provincial Prosecutor

Received by:___________
Date: ___________