The Supreme Court on Tuesday upheld a Commission on Audit (COA) ruling that held liable four hospital officials in Cebu for disbursing P3.38 million for antirabies medicines using 133 falsified prescriptions and documents. The money came from the pork barrel funds of then Cebu Rep. Antonio Cuenco.
Voting unanimously, the high court dismissed the petition for certiorari filed by four officials of Vicente Sotto Memorial Medical Center (VSMMC) who claimed that the COA gravely abused its discretion when it held them liable for the disbursement of P3,386,697.10 in its decisions in 2010 and 2011.
Supreme Court spokesman Theodore Te said the high court had ruled that the COA did not act with grave abuse of discretion in denying the appeal of Filomena G. de los Santos, VSMMC chief; Josefa Bacaltos, chief administrative officer; Nelanie Antoni, chief of the pharmacy; and Maureen Bien, hospital accountant.
“Because they have acted with negligence in failing to properly monitor the implementation of a memorandum of agreement (MOA) entered into between Cuenco and VSMMC involving the use of Congressman Cuenco’s Priority Development Assistance Fund (PDAF),” Te told reporters.
Special audit team
He also said the high court referred the case against the four hospital officials to the Office of the Ombudsman “for further investigation and possible prosecution.”
The four hospital officials went to the high court to question the COA decisions on April 8, 2010, and Aug. 8, 2011, that in turn were based on the findings of a Special Audit Team (SAT) that held them liable for the disallowed disbursement of P3.38 million to pay for antirabies medicines using falsified prescriptions and documents.
De los Santos was held liable for acting, signing and approving the disbursement vouchers and checks; Bacaltos, for certifying that the expenses were lawful, necessary and incurred in her direct supervision; Antoni, for approving the supporting documents when the imputed delivery of the medicines had already been consummated; and Bien, for certifying that the supporting documents were complete and proper.
The SAT found 133 falsified prescriptions for antirabies vaccines, drugs and medicines costing P3.34 million. The medicines were dispensed by Dell Pharmacy and paid from Cuenco’s PDAF.
The SAT also found 46 falsified prescriptions for other drugs and medicines costing P695,410.10, which were dispensed by the same pharmacy and paid for by the lawmaker’s pork barrel.
“An examination showed that the purported patients-beneficiaries were mostly nonexistent and there was no actual procedure followed except for the mere preparation of payment documents which were found to be falsified,” said the summary issued by the high court’s Public Information Office (PIO).
Tony N’ Tommy program
In the decision penned by Associate Justice Estela Perlas-Bernabe, the Supreme Court agreed with the COA decision that the hospital through its officials should have not been deeply involved in the implementation of the Tony N’ Tommy (TNT) program as it was a party to the MOA and thus, acted as the custodian and disbursing agency of Cuenco’s PDAF.
In October 2001, the hospital and Cuenco signed an MOA setting aside P1.5 million from his PDAF for VSMMC to provide financial assistance to indigent patients under the TNT health program.
Under the MOA, Cuenco was to identify and recommend the patients who would get P5,000 each and the hospital would purchase medicines from outside sources if these were not available in its pharmacy subject to reimbursements. It was agreed later that the hospital would buy medicines not available in the pharmacy from Sacred Heart Pharmacy or Dell Pharmacy.
The high court said the hospital officials were supposed to monitor the program’s implementation and to ascertain that all payments were made under government auditing and accounting rules.
“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,” the tribunal said.
Violation of circular
But the high court noted that, as pointed out by the SAT, which investigated in 2007 allegations of falsification of prescriptions and referrals for the medicines in the TNT program, the hospital did not follow the provisions of National Budget Circular No. 476 and existing auditing rules and regulations governing the procurement of medicines.
The Supreme Court said that the TNT program was not implemented by the Department of Health but by the office set up by Cuenco and that the medicines purchased by the hospital from Dell Pharmacy did not go through the required public bidding, among others.
“The Court finds that the petitioners have failed to show any justification for their nonobservance of existing auditing rules and regulations and of their duties under the MOA,” the high court’s PIO summary said.
The court said the hospital officials neglected to monitor the disbursement of Cuenco’s PDAF, “facilitated the validation and eventual payment of 133 falsified prescriptions and fictitious claims for antirabies vaccines supplied by the hospital and Dell Pharmacy, despite the patent irregularities borne by the referral slips and the prescriptions.”
No internal control
The tribunal said the irregularities were undetected at the hospital because of the absence of an internal control system.
“Petitioners cannot escape liability for failing to monitor the procedures implemented in the TNT office on the ground that Cuenco claimed that it was his money; neither may deviations from the usual procedure at the hospital be justified as a ‘welcome relief to the already overworked and undermanned section of the hospital,’” the summary said.
The hospital officials failed to “faithfully discharge their respective duties and to exercise the required diligence which resulted in the irregular disbursements from the PDAF of Cuenco.”
The high court said the officials were liable under Sections 104 and 105 of the Auditing Code as well as Section 16 of the 2009 Rules and Regulations on Settlement of Accounts, as prescribed in COA Circular No. 2009-04 dated Sept. 15, 2009.
“Truly, the degree of their neglect in this case and the resulting detriment to the public cannot pass unsanctioned, else the standard of public accountability be loosely protected and even rendered illusory,” the summary said.