FACTS: Respondent was a Municipal Treasurer. COA conducted an audit examination of accountabilities of respondent’s cash and accounts covering November 1997 to November 1998. Audit report showed a deficiency of P4.7M. Respondent was asked to restitute but he failed. He requested State Auditor for a bill of particulars. COA failed to clarify the basis. COA filed a Letter-Complaint against respondent before the Ombudsman. Meanwhile, the Provincial Treasurer also conducted its own investigation but its findings did not indicate any shortage but, instead, pointed out that had the mayor, treasurer, and accountant observed the COA Rules, the irregularity would not have been committed.

Two years later, COA conducted another audit examination covering November 1998 to May 2000. Report showed a zero balance during the last examination conducted (paragraph above). Respondent then sought for dismissal of the complaint on the ground that the latest COA report indicated that there was no shortage.

Ombudsman still dismissed respondent from service for dishonesty, saying his failure to account when audited and his alleged lack of cooperation with the Audit Team constitute substantial evidence of dishonesty. Also, Ombudsman did not give much credence (1) to the second report, reasoning it was conducted two years from November 1998; (2) that of the three assigned state auditors, it was only one signed the second report; and (3) on conclusion that there was no shortage in the second report may be because petitioner restituted the missing funds after discovery. CA found for reversed.

ISSUE: Did the CA err in holding that the Ombudsman’s dismissal was not based on sufficient evidence?

HELD: NO, CA did not err. Petitioner maintains that the zero-balance reflected in the second report, prepared two years after the first audit, cannot negate the finding of cash shortage, considering that second report is defective.

The petition is bereft of merit. In administrative cases, the quantum of evidence necessary to find an individual administratively liable is substantial evidence. S5, R133 is explicit: xxx

Substantial evidence does not necessarily mean preponderant proof as in civil cases, but such relevant evidence as a reasonable mind might accept as adequate to support a conclusion or evidence commonly accepted by reasonably prudent men in the conduct of their affairs.

Here, the evidence lacked that degree of certainty because the entries in the two audit examinations yielded conflicting results. In the first report, the alleged shortage is 4.7M. However, in the succeeding report was reflected that there was no balance during the last (the first) audit. These discrepancies cannot be ignored. Evidence of shortage is imperative to hold respondent. Here, the evidence could not be relied upon. The second report puts into question the reliability of the first. Whether the zero balance as appearing in the second audit report was correct or inadvertently indicated, the credibility and accuracy of the two reports were already tarnished. A separate and more thorough audit would be required to dispel any uncertainties and to arrive at respondent’s true and correct accountability. The shortage of funds was clearly not indubitably established. Until such audit is conducted, the two audit reports cannot be used to prove or disprove any shortage in respondent’s cash and accounts.

Even in administrative cases, a degree of moral certainty is necessary to support a finding of liability. In the instant case, the evidence submitted to conclude that respondent was administratively liable is sorely wanting.

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