PAARL FACT-FINDING BOARDREPORT ON THE STATUSOF THE TIME DEPOSIT FUNDOF THE ASSOCIATIONPAARL FACT-FINDING TEAMFe Angela M. ...
2Executive Summary“For the love of money is the root of all evil: which while some coveted after, they haveerred from the ...
3Table of ContentsExecutive Summary 2Fact-Finding Board 4Scope and Purpose 4Conduct of the Inquiry 5Summary of the Hearing...
4The Fact-Finding BoardA Fact-Finding Board to be led by past president Fe Angela M. Verzosa as Chairperson,was created on...
5• provide an objective and independent investigation into the circumstancessurrounding the missing time deposits placed o...
6Summary of the HearingsThe formal inquiry was open to all the parties involved, the Council of Elders, membersof the 2010...
7Association’s activities and in-charge of its publications. She also often served as emceein many of the functions of the...
8Problems EncounteredThis report is based mainly on the following:• Bank documents, bank statements, passbooks, withdrawal...
9BackgroundThe Philippine Association of Academic and Research Librarians, Inc. (PAARL) is anation-wide association of lib...
10Findings: Facts and Sequence of EventsThe Time DepositsBased on the 2004 Audited Financial Report ending on 31 December ...
11as above-mentioned, totaled to Php 425, 774.54, based on an email dated 8 September2010, sent by 2010 Vice-President Rod...
12Despite the lack of authorization from the Board, proper consultation with theCouncil of Elders, and any definite decisi...
13On 1 December 2010, the BDO manager’s check of Php 1,040,000 was deposited at BPIFamily Savings Bank-Carlos Palanca Bran...
14Scholarship Fund account no. 5953-3395-97 was indicated on the certificate asthe settlement account.41• a Maxi-Saver pas...
15Paras himself. And there was also no request for bank confirmation orreconciliation during the audit period made by the ...
16The 2013 Board agreed to create a Fact-Finding Committee to conduct an investigationinto the missing time deposits.BFB V...
17Mr. Rudy Lara of ForeFront Inc. attested to the fact that Mr. Paras was seen by Mr.Manalo. In his own Sinumpaang Salaysa...
18Evaluation of Findings: Conclusions1. The Time Deposits ~ not Missing, but GoneFollowing the money trail was the easiest...
19• So as not to stir up the hornet’s nest, a Php 50,000 cash deposit was made to the Scholarship Fundexactly one year aft...
20preparation of the financial records for the annual audit to be conducted by independent auditor,the Treasurer was expec...
21• Failure in turn-over – There was no record of any turn-over, nor listings, or inventories offinancial records effected...
22involving major transfer/ disposition of funds and assets, but he failed dismally in securing theirconcurrence. Despite ...
23safekeeping. During the audit period (which normally should take place right after the end of thecalendar year) in early...
244. In Flagrant Disregard of RulesNo Reserve Fund – As stated in the By-Laws, separate accounts must be established for s...
25Directors, and the members of the Association, again based on the Manual. The By-Lawslikewise, require the services of a...
26RecommendationsIn light of the preceding discussion on the evaluation of findings and the accountability,liability and/o...
27fictitious, and falsified” Time Deposit certificate to prove that the amount of Php 1.25million was invested in a Peso T...
28lapses in her keeping and maintaining the corporate files under her custody as Secretary,the 2010 Secretary is partly to...
29the amount representing the net income earned by the previous Board in theOperation Fund, to be deposited in the Maxi-ch...
30List of Documents CollectedAnnex A Letter of Appointment of Fe Angela M. Verzosa to lead the Fact-FindingTeam, 14 Februa...
31Annex E6 Email sent by 2010 President Christopher C. Paras to Aisa dela Torre-Morana, dated 13 January 2011Annex E7 Emai...
32Annex M 2010 Secretary’s Certification of Board Resolution No. 6, dated 9November 2010 attached to the Letter of BPI Fam...
33End Notes1Letter of Appointment of Fe Angela M. Verzosa to lead the Fact-Finding Team, 14 February 2013 (AnnexA)2Transcr...
3423Time Deposit Certificate with Equitable-PCIB with handwritten remarks “Turned Over OriginalCertificate” and the signat...
3544PAARL Newsletter, January-March issue 2011, page 2 (Annex H2)45Sworn statement made by Aisa dela Torre-Morana (Annex S...
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PAARL Fact-Finding Board on the Status of the Missing Time Deposits

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  1. 1. PAARL FACT-FINDING BOARDREPORT ON THE STATUSOF THE TIME DEPOSIT FUNDOF THE ASSOCIATIONPAARL FACT-FINDING TEAMFe Angela M. Verzosa (Lead)Dionisia M. AngelesSalvacion M. ArlanteLolita P. GonzalesRebecca M. JocsonMarlo C. Chavez (Alternate)Rodolfo Y. Tarlit (Alternate)Belen M. Vibar (Alternate)Submitted to:Sonny Boy Tadena Manalo, 2013 PAARL President25 March 2013PHILIPPINE ASSOCIATION OF ACADEMIC AND RESEARCH LIBRARIANSRm. 301, THE NATIONAL LIBRARY BUILDING, T.M. KALAW ST., ERMITA1000 MANILA, PHILIPPINEShttp://sites.google.com/site/paarlonlineorg
  2. 2. 2Executive Summary“For the love of money is the root of all evil: which while some coveted after, they haveerred from the faith, and pierced themselves through with many sorrows.”[1 Timothy 6:10]A Fact-Finding Board was created on 14 February 2013 by the 2013 Board of Directors,barely a week after its discovery of a fake Time Deposit Certificate placed with BPIFamily Savings Bank-Pedro Gil Branch on 8 December 2010. Specifically the fact-finding team led by past President Fe Angela M. Verzosa was mandated to investigateinto the circumstances surrounding the missing time deposits in the amount of P1.25million, and to provide evidence-based findings in order to establish a documented basisupon which recommended actions for the immediate implementation of the 2013 Boardmay be done, in consultation with the general membership in a special meeting to becalled for this purpose.After two weeks of evidence-gathering, three hearings were conducted: a PreliminaryHearing, a Full Investigative Hearing on the Testimonies of the 2010 Board, and aClarificatory Hearing from the 2011-2012 members of the Board of Directors.Following the money trail was the easiest part of this investigation; documentaryevidences collected by the Board clearly established the following facts:• On October 18 and November 18 of 2010, two blank bank withdrawal slips pre-signed by the2010 Treasurer, facilitated the withdrawal in cash by the 2010 President of the entire time depositearnings placed in a savings account with Banco de Oro in the amount of almost Php 450,000.• On the same day of November 18, the time deposit certificate placed with the same bank fiveyears ago in the amount of more than a million pesos, was withdrawn by said President, armedwith another pre-signed blank withdrawal slip, which he deposited to the account of PAARL heldby BPI Family Savings Bank (BFB) – Pedro Gil Branch, two weeks later.• A week after it was deposited, on 8 December 2010, the one million plus was withdrawn through ablank check issued by said Treasurer, which enabled said President to encash the check, anddeposit part of the cash (Php 239, 355.74) to open a savings account in the name of PAARLScholarship Fund.• With the balance from this check withdrawal amounting to Php 800, 644.26 and the interestearnings of Php 449,355.74 (which were earlier withdrawn in cash) totaling to P1.25 million, the2010 President and the 2010 Treasurer, by their signatures on the certificate as depositors, made itappear that the entire amount was invested in a time deposit with BPI Family for a period of fiveyears, with annual interest at the rate of 4%.• So as not to stir up the hornet’s nest, a Php 50,000 cash deposit was made to the Scholarship Fundexactly one year after the opening of both the TD and the savings accounts, to make it appear thatthe TD has earned its first annual interest.It took another year before the TD was discovered to be fake, and only because interestincome that was expected to be posted for the second year did not come. This raisedundue alarm, and prompted the 2012-2013 Treasurer to visit the bank to claim theinterest, and, upon verification, found that the TD certificate, which lay dormant insidethe vault of Ateneo Professional Schools Library, was confirmed by the bank as“spurious, falsified, and fictitious”, and the money that was meant to be invested in itwas, without doubt, gone.
  3. 3. 3Table of ContentsExecutive Summary 2Fact-Finding Board 4Scope and Purpose 4Conduct of the Inquiry 5Summary of the Hearings 6Problems Encountered 8Background 9Findings: Facts and Sequence of Events 10Evaluation of Findings: Conclusions 17Recommendations 23List of Documents Collected 30End Notes 33
  4. 4. 4The Fact-Finding BoardA Fact-Finding Board to be led by past president Fe Angela M. Verzosa as Chairperson,was created on 14 February 2013 by the governing Executive Board of the PhilippineAssociation of Academic and Research Librarians (PAARL) represented by the 2013President, Sonny Boy Tadena Manalo. Tasked to investigate the incident involving themissing Time Deposits of the Association under the name of PAARL Scholarship Fund,this Fact-Finding Board was initially composed of four other past presidents of theAssociation as members, namely: Dionisia M. Angeles, Salvacion M. Arlante, Lolita P.Gonzales, and Rebecca M. Jocson. Assisting the members as alternates were three otherpast presidents: Marlo C. Chavez, Rodolfo Y. Tarlit, and Belen M. Vibar.1For the purpose of conducting inquiries, investigations and hearings, the fact-findingboard was vested with the power to administer oaths and affirmations, interview theofficers and members of the Executive Board for the years 2010-2013, examine otherwitnesses, and evaluate documents presented by the 2010-2013 Executive Board.On the basis of these investigations and hearings, the fact-finding board was mandated tomake findings of fact regarding the issues and circumstances surrounding the incident , todraw conclusions, and finally, to submit recommendations to the 2013 Executive Boardwithin ten (10) days after completion of its hearings. The written report shall besubmitted privately to the President of the 2013 Board and to each of the parties involved.Scope and PurposeThis internal investigation was intended to be a fact-finding exercise, not a criminalinvestigation, or a trial. The general purpose is to find out what actually happened andidentify what action/s will be needed to protect the organization from loss or shame,damage to reputation and like-minded consequences, and to consider the followingpotential outcome of the inquiry:• administrative or disciplinary action;• recovery of monies involved;• mediation between aggrieved parties• changes to policies and procedures in governance.As a fact-finding exercise, the inquiry might also serve as a preliminary analysis todetermine whether an investigation leading to prosecution should be undertaken by theincumbent Board.Specifically, this Fact-Finding Board was mandated to:
  5. 5. 5• provide an objective and independent investigation into the circumstancessurrounding the missing time deposits placed originally with Banco de Oro (TaftAvenue branch), and subsequently transferred to BPI Family Savings Bank(Pedro Gil Branch) in the amount of P1.25 million in December 2010;• carry out a thorough examination of the facts, evaluate the testimonial anddocumentary evidences to be presented, and provide evidence-based conclusionsand reporting in order to establish a documented basis upon which a decision canbe made by the 2013 Executive Board as to the liability, culpability, and/oraccountability of the affected members of the Executive Boards, whetherindividually, jointly, or collectively, particularly of the parties involved in theincident; and, to• assess any potential or developing problems that could impact on the confidenceof the members on the governance of the Association, and on the image of theassociation resulting in damage to its reputation, by disclosing the conclusionsarrived at by the Fact-Finding Board to the general membership in a specialmeeting to be called for this purpose.Conduct of the InquiryThe conduct of this investigation was based on evidence, not mere suspicion orspeculation. The investigation process included the following steps:1. Receipt of Allegation or Complaint2. Preliminary Review and Hearing- allegations and concerns were reviewed todetermine the significance, immediacy or urgency of the matter, the mostappropriate approach to assess the facts, and whether sufficient information existfor an investigation.3. Assignment of Tasks4. Fact Finding - an objective process was used to gather information internal andexternal to the organization. This fact-finding process included gathering officialbank documents from Banco de Oro and BPI Family Savings Bank, conductinginterviews of the members of the Board of Directors for the years 2010-2013,aside from an examination of the records presented. All interviews were recordedand transcribed. Based on professional standards, information gathered wereevaluated to assure that there was adequate evidence to support a conclusion.5. Reporting of Results6. Post-investigation Review - after assessing the report, the incumbent Board wasexpected to evaluate the related internal controls and compliance impact resultingfrom the investigation. The 2013 Board was expected to determine what actionwould be taken, and to initiate a special meeting of the general membership on theresult of the investigation after the report had been submitted and disseminated tothe parties involved
  6. 6. 6Summary of the HearingsThe formal inquiry was open to all the parties involved, the Council of Elders, membersof the 2010-2013 Board of Directors, and past presidents of the Association. Thehearings were conducted fairly and objectively, with consideration provided to thefollowing:• Background information leading to the incident• Input from witnesses• Responses to the allegations• Analysis of the facts; and• ConclusionThree hearings were conducted after notices and invitations were sent: a PreliminaryHearing, a Full Investigative Hearing of the Testimonies of the 2010 Board, and aClarificatory Hearing from the 2011-2012 members of the Board of Directors.The Preliminary Hearing was conducted on 28 February 2013 and held at the MeetingRoom of the DLSU Learning Commons, on the 8thfloor of the Henry Sy Building,DLSU-Manila, at Taft Avenue from 9am till 2pm. In attendance were members of the2013 Board of Directors, past presidents, and some members of the 2010 Board ofDirectors. After taking their Oath of Affirmation, the first to be heard was the 2013President, Sonny Boy T. Manalo, who related the circumstances that led to his calling foran emergency meeting of the 2013 Executive Board with some members of the 2010Board last February 9 over his concern on the status of the time deposit with BPI FamilyBank.2Next to be called was 2013 Treasurer Cecilia D. Lobo, who recounted thecircumstances relating to her discovery last February 7 that the Time Deposit Certificatewith BPI Family Savings Bank (Pedro Gil Branch) in the amount of P1.25 million was“fake”.3The last to be heard was the 2013 Ex-Officio Sonia M. Gementiza, who gave adetailed account of the visit made by some members of the 2013 Board, accompanied by2010 Ex-Officio Elvira B. Lapuz, to the home province of 2010 President Christopher C.Paras at Barangay Tambak in Malasiqui, Pangasinan on February 16 to personally invitehim to attend the hearings. Thereafter, the three recounted the initial steps taken by the2013 Board leading to the creation of the Fact-Finding Board.4The second hearing, intended to be a full Investigative Hearing of the 2010 Board ofDirectors was held at the same meeting room at DLSU-Manila (Taft) on 7 March 2013for four uninterrupted hours in the morning. After taking their Oath of Affirmation, themembers of the 2010 Board who attended the hearing were one by one called to describetheir respective duties and responsibilities as officers of the Executive Board. First to beheard was Ex-Officio Elvira B. Lapuz, who served as the Board’s adviser but with novoting rights on its deliberations. Sonia M. Gementiza served as the 2010 Secretary whotook the minutes of the meetings of the Board, and in her absence, had a prior agreementwith Victoria P. Baleva, a Director at large, to take the minutes. Ana B. Fresnido servedas 2010 Public Relations Officer, responsible for the marketing and promotion of the
  7. 7. 7Association’s activities and in-charge of its publications. She also often served as emceein many of the functions of the Association. Veronica M. Jose served as the internal2010 Auditor of the Board, and as such, audited the financial reports of the treasurer andmonitored the disbursements of funds. Last to be heard was the 2010 Treasurer, Aisa dela Torre-Morana, accompanied by her lawyer, Atty. Ray Paolo Santiago, who related thateven prior to her nomination as Treasurer, she was informed by 2010 Vice-PresidentRoderick B. Ramos and 2010 President Christopher C. Paras that she would be voted inthe position of Treasurer since she would be guided by past president Teresita C. Moran(then Chief Librarian of Ateneo Professional Schools, where both were employed). AsTreasurer, she was responsible for issuing vouchers and checks and reporting monthly onthe finances of the Association’s funds. The 2010 President Christopher C. Paras and hisVice-President Roderick B. Ramos did not attend; likewise, two other Directors-at-large,namely, Erlinda B. Gonzales and Sister Ma. Gloria B. Pasamba, SPC failed to attend.5The third and final proceeding of the Fact-Finding Board was a Clarificatory Hearingconducted at the Conference Room of the National Library’s Office of the Director,located on the 4thfloor of the National Library at T.M. Kalaw St., Manila last 14 March2013 from 1pm until 4:30pm. First to be heard was Victoria P. Baleva on the contents ofthe minutes of meetings of the 2010 Board in September and October of 2010 duringwhich Secretary Sonia Gementiza was absent. Erlinda B. Gonzales, who attended thehearing for the first time, and was present at both September and October meetings of the2010 Board was likewise asked to recall the deliberations of the Board on the finaldisposition of the time deposits. Former treasurer Aisa Morana of the 2010 Board wasasked to further explain her previous statements regarding the issuances of blank checksand withdrawal slips, and the discovery of cancelled blank checks which she had pre-signed. She was also asked to clarify the approximate date/month when she turned overthe passbook (for the settlement account of the time deposit with BDO) to 2010 Vice-President Ramos, and who held the passbook until the amount of the interest earnings ofthe time deposit were withdrawn, to which she replied that the passbook was turned overto 2010 VP Ramos in February 2010, and since then it was Mr. Ramos who took care ofhaving the passbook updated since BDO was just across DLSU, where he was thenemployed. It was also during this clarificatory hearing that the membership qualificationof Ms. Morana and Mr. Ramos, who both ran for election in 2008, and of Mr. Paras whoran for the 2007 Board, was questioned, as the records shown from the 2005-2006PAARL Directory indicated that all of them were not active paying members in 2006, inviolation of the election rule in the By-Laws that nominees to the election should havebeen “active for the last three consecutive years at least three months before the annualelection, but not later than August 31.” The Fact-Finding Board also took note of thecontinued absence of Mr. Ramos in the hearings. The 2011 Treasurer Sonia Lourdes L.David whose testimony on the turnover of the financial records in January 2011 and in2012 and on her role as 2011 Treasurer and 2012 Auditor was material to theinvestigation, likewise, failed to attend due to previous engagements.6
  8. 8. 8Problems EncounteredThis report is based mainly on the following:• Bank documents, bank statements, passbooks, withdrawal slips, and otherpertinent bank records• Checks (Returned) and vouchers – in particular BFB check no. 86073 amountingto P1,040,000 indicating encashment by Christopher C. Paras• Emails together with their attachments– in particular by Ana Fresnido, AisaMorana, Christopher Paras and Roderick Ramos• Manuals and By-laws of PAARL, 2005-2006 PAARL Directory and Newletters(used as references)• Minutes of Meetings• Secretarys Certificates of Board Resolutions• Sworn statements from members of the Executive Board, 2010-2013 and othertestimonies• Time Deposit Certificates• Transcript Notes and Tape Recordings made of the hearings• Treasurers /Auditors reports for 2004, 2009, 2010, 2011 and 2012• Turnover list of documents/supplies in 2010 from 2009 TreasurerThe Fact-Finding Board took note of the continued absence of 2010 Vice-PresidentRoderick B. Ramos, who, despite repeated invitations, notices and follow-up requests,and in spite of the change of venue from DLSU-Manila to the National Library whichwas done to accommodate his preferences, declined to appear at the hearings.7He,however belatedly, sent an email attachment rendering his response to our inquiries forclarification in an email addressed to the 2013 President dated 17 March 2013, and usedin this report as a material evidence.Other problems encountered in the task of evidence-gathering involve missing records.Because of the failure of the 2010 Secretary and the 2010 Treasurer to execute the properturn-over of documents to their successors, the Association’s corporate files, in particularthe original documents of incorporation in 1981 and in 2004 with the Securities andExchange Commission, which were allegedly kept by 2010 President Christopher Paras,were not available for reference by the Fact-Finding Board. Digital file copies of thesedocuments and electronic communications together with their attachments were usedinstead as substitutes. The computer used by the 2010 Secretary to store her Secretary’sfiles of agenda, minutes of meetings, correspondences, Board resolutions, and otherdocuments, unfortunately crashed, and no back-up copies were made of them. Up untilthe very last hearing of the Fact-Finding Board, the financial records were kept by the2011 Treasurer at her office in the library of Ateneo Professional Schools in Makati City.
  9. 9. 9BackgroundThe Philippine Association of Academic and Research Librarians, Inc. (PAARL) is anation-wide association of librarians working in academic and research libraries thatsupports scholarly research and formal education in the tertiary level, and upholds theprofession of librarianship in the Philippines. Since its founding in 1973, it has providedresponsible leadership in the development and growth of library and information servicesin the country. It was registered with the Securities and Exchange Commission on 16February 1981 (SEC No. 97479), and on 8 June 2004 (SEC No. 2000406833), it wasreincorporated with a change in name from “Philippine Association of Academic andResearch Libraries” to its present name.8It is governed by an Executive Board consistingof nine directors, who are directly elected by the general members every year, andassisted by the immediate past president as a non-voting member of the Board in an Ex-Officio capacity. They shall hold office for one year after their induction into office.Based on the 2004 Audited Financial Report ending on 31 December 2004, the newlyincorporated Association had a cash position in the total sum of Php1,429,226.51:9Cash in bank: time deposits with Equitable-PCIB- 978,161.63Cash in bank: savings with BPI Family Savings Bank - 436,737.33Cash in bank: savings with PNB (Escolta) - 13,714.28Cash on hand 613.27.On its 37th Annual General Assembly held at St. Paul University in Quezon City on 29January 2010, a new Board took its oath of office, namely: Christopher.C. Paras asPresident, Roderick B. Ramos as Vice President, Sonia M. Gementiza as Secretary, Aisade la Torre-Morana as Treasurer, Ana Maria B. Fresnido as Public Relations Officer,Veronica M. Jose as Auditor, Victoria P. Baleva, Erlinda B. Gonzalez, Sr.. Maria GloriaB. Pasamba, SPS, as Directors, and Elvira B. Lapuz as Ex-Officio.10In his Inaugural Speech, incoming President Paras admits: “I have a daring confession to maketo all of you and I demand your immediate forgiveness. You know what, in my entire life I have neverdreamed of becoming a librarian. It’s a profession I denied many times before, not only to my closestfriends, but even to my family and relatives as well.”11In the same gathering, 2000 and 2004 president Ms. Fe Angela M. Verzosa, Chair of theLaw and Legislation Committee for 2009, presented three amendments to the 2004 By-laws, which were all approved by the body.12These amendments included the provision:"A Reserve Fund established as seed money and to be used only as starting fund at thebeginning of the calendar year may be utilized for the early months in operation with theintent that whatever amount was borrowed from the Reserve Fund shall be returnedimmediately as soon as practicable. This fund should be placed in a separate savingsaccount and distinct from the Operation Fund."13
  10. 10. 10Findings: Facts and Sequence of EventsThe Time DepositsBased on the 2004 Audited Financial Report ending on 31 December 2004, the newlyincorporated Association had a cash position in the total sum of Php1,429,226.51:14Cash in bank: time deposits with Equitable-PCIB- 978,161.63Cash in bank: savings with BPI Family Savings Bank - 436,737.33Cash in bank: savings with PNB (Escolta) - 13,714.28Cash on hand 613.27When the time deposits with Equitable-PCIB matured in September 2005, theAssociation placed the amount of P1,040,000 with the same bank on another 5-year timedeposit, yielding a gross interest rate of about 10% per annum, with interest earningsposted quarterly in a passbook-type settlement account under the name PAARLConference Trust Fund (Account No 45800-883-12). The Time Deposit certificateindicated that it was to mature on 8 September 2010.15In the 37th Annual General Assembly held at St. Paul University in Quezon City on 29January 2010, the 2009 Treasurer’s Report was presented by Ms. Jocelyn T. Balangueciting the composition of the funds of the Association as of 31 December 2009:16Composition of Fund BalancesAs of 31 December 20092,113,876.28Cash in bank: Time deposit (BDOI)interest incomeTotal in Time Deposit1,040,000.00380,225.261,420,225.26Cash in bank: Savings/Checking Account (BPI) 621,822.59Cash in bank: Savings deposit (PNB) 63,304.81Cash on hand 8,523.62Citing the Association’s Newsletter for the 2ndquarter (April-June 2010 issue), “As ofJanuary 1, 2010, PAARL realized a net income of Php 357,752.00”.17On 13 February 2010, a Turn-over of financial records was made by 2009 TreasurerJocelyn T. Balangue to 2010 Treasurer Aisa de la Torre-Morana, which included this TDcertificate together with the passbook.18The passbook was, in turn, given to Vice President Roderick B. Ramos by Mrs. Moranato facilitate the quarterly posting of the interest earnings of the time deposit, since Bancode Oro-Taft Avenue Branch (formerly Equitable-PCIB) was just across De La SalleUniversity-Manila, where Mr. Ramos was then employed.19By the time, the time deposits matured on 8 September 2010 with Banco de Oro (whichreplaced Equitable-PCIB), the interest earnings of the BDO Account No. 45800-883-12,
  11. 11. 11as above-mentioned, totaled to Php 425, 774.54, based on an email dated 8 September2010, sent by 2010 Vice-President Roderick B. Ramos to update the 2010 Treasurer Aisade la Torre- Morana on the outstanding balance on the passbook.20Discussion on the Disposition of the Time DepositsAt the 9thregular meeting of the Executive Board on 15 September 2010 held at ManilaDoctor’s College, Macapagal Avenue, Pasay City, where all the members of the Boardwere present except for Secretary Gementiza, Ms. Fresnido, and Ms. Jose, PresidentParas indicated that he would invite the Council of Elders in the next meeting to discussthe one million in time deposits.21As an oversight body, the Council of Elders shouldbe consulted, as mandated in the Manual of Policies and Procedures, in majordecisions affecting the association, such as those dealing with financial transactionsinvolving major transfer/ disposition of funds and assets.22However, no mention was made during this meeting of the visit made by Mr. Parason the 13thof September 2010 to the library of Ateneo Professional Schools to pickup the original certificate of time deposit from the Treasurer, Ms. Morana, and ablank withdrawal slip signed by Ms. Morana .23There was also no mention duringthis meeting of a board resolution signed by the Directors specifically authorizingMr. Paras to effect any movement of the time deposit and its earnings from Bancode Oro to any other bank.On 9 October 2010 Mr. Paras sent an invitation emailed to the Council of Elders andother past presidents requesting them to attend the Executive Board meeting originally seton the 15thof October but moved later to the 14th. As one of the recipients of this email,Ms. Verzosa sent her reply giving her reason for her inability to attend the meeting, butoffering her advice and opinion on the final disposition of the time deposits.24On 14 October 2010 between 8:30 to 12:30pm, the Board met for its 10thregular meetingat the National Library with all members present except for Secretary Gementiza again,Ms. Jose and Sr. Pasamba. Treasurer Morana presented her monthly financial report, butnothing was mentioned in the minutes of meeting about the discussion on the dispositionof the time deposits, nor any decision on the final disposition of the funds. Moreover, themeeting with the Council of Elders where only one past president attended, did notmaterialize.25However, in an email sent by Ms. Fresnido to Ms. Verzosa a day later at 17:08:27, sherecounted that: “The board has no final decision yet on the 1.4M. Most likely, 1.2M ofthe total amount will be deposited (time deposit) again. A separate account will beopened for the remaining 240,000.00 for scholarship to be used in the next 5 years. Asthe operating budget is quite big now, a portion of the budget will also be allocated tofinance research projects. We’ll probably finalize this during the next meeting.”26
  12. 12. 12Despite the lack of authorization from the Board, proper consultation with theCouncil of Elders, and any definite decision on the disposition of funds that shouldhave been explicitly written out in a board resolution, on 18 October 2010, barelythree days before the Singapore Benchmarking Tour (the first Library Tour outsidethe country sponsored by PAARL on 21-24 October), Mr. Paras, fully authorized byMrs. Morana as shown in the blank withdrawal slip she signed, withdrew theamount of Php 250,000 in cash from the passbook account no. 45800-883-12 withBanco de Oro, which represented the interest earnings of the time deposit.27According to Vice President Roderick Ramos, he met with Mr. Paras at Starbucks locatednear De La Salle University Taft campus to turn over the passbook for BDO Account No.45800-883-12.28However, there is no record to indicate this turn-over, nor any mentionin the November and December meetings of the Board was made.There is no record file of the Minutes of Meeting held in November 2010, but Ms.Gementiza signed a Secretary’s Certification of Board Resolution No. 006 dated 9November 2010, duly notarized on 11 November 2010, providing for the opening of aScholarship Fund with Treasurer Morana and President Paras as the only authorizedsignatories, until the bank is otherwise notified by the corporation.29The Transfer of the Time DepositsOn 18 November 2010, the time deposit amounting to Php 1,040,000 was withdrawn.30Based on the bank documents, an application for manager’s check was made bearing thesignatures of both Mr. Paras and Mrs. Morana on the same date, and a withdrawal slipsigned by both for the amount of Php 1,040,000, authorizing Mr. Paras to withdrawthe amount on the same date 31No board resolution was presented to the Bank, asevidenced by the documents presented by the bank in response to a formal request.On the same date also, Mr. Paras, fully authorized by Mrs. Morana who signedanother blank withdrawal slip, went to Banco de Oro to withdraw the amount ofPhp 198,711.73 in cash from the same passbook Account No. 45800-883-12,representing the interest earnings of the time deposit. The total sum nowwithdrawn from this account amounted to Php 448,711.73. 32This amount did not go into any of the accounts held by BPI Family Savings Bank.And there is no document to show that the Treasurer ever reported on thesewithdrawals, not even to check or to ask where the money went. There is also nodocument in November to show that the Vice-President, under whose custody thepassbook was entrusted for safekeeping, turned over the passbook to Mr. Paras toenable him to encash the money, and/or received the passbook back after thewithdrawals were made.
  13. 13. 13On 1 December 2010, the BDO manager’s check of Php 1,040,000 was deposited at BPIFamily Savings Bank-Carlos Palanca Branch and credited to the Association’s Maxi-Check Account No. 5951-0782-06 at BPI Family Savings Bank-Pedro Gil Branch.33On 8 December 2010, the same amount was withdrawn at BPI Family SavingsBank-Pedro Gil Branch via a “pay to cash” check no. 086073, dated on the sameday, bearing the signatures of both Mr. Paras and Mrs. Morana, and encashed byMr. Paras, indicating at the back of the check his “PRC No. 02259 and SSS ID No.33-2717626-1”.34From the cash amount of Php1,040,000, the sum of Php 239, 355.74 was deposited toAcct. No. 5953-3395-97, which was opened on the same date, by Mr. Paras, afterpresenting the Secretary’s Certification of Board Resolution No. 6, authorizing him andMrs. Morana to open a PAARL Scholarship Fund.35The remaining balance in cashamounting to Php 800, 644.26 was indicated with the word “out” as written by handat the back of the check no. 086073.36On 3 January 2011, Mr. Paras sent Mrs. Morana an email informing her that he hastransferred the BDO funds to BPI Family and opened the Scholarship Fund.Furthermore, he remarked: “Yung sa PNB nalang ang for transfer sa Scholarship Fundpara isang bank nalang hahawakan ng successor mo..hehehe.”37And he did close thefunds deposited at PNB amounting to Php 77,550.91 and transferred them to theScholarship Fund on 31 January 2011, without any Board Resolution or Secretary’sCertification authorizing him to close the account and transfer the funds to theScholarship Fund at BPI Family.38Subsequently, Mr. Paras sent an email to Mrs. Morana dated 13 January indicating thatthe total sum of Php 449,355.74 was withdrawn from the interest earnings of the timedeposit with BDO on 8 December 2010, thereby closing the account.39(This amount,when added to the balance of the time deposit encashed by Mr. Paras of Php800,644.26 would indicate the sum of Php 1,250,000). In reality, however, after thetwo withdrawals made in 18 October and 18 November from the interest earnings, theaccount balance was only Php 644.01. Furthermore, the closing of the account with BDOwas effected too without any Board resolution.The Time Deposit Certificate of Php 1.25 MillionOn 25 January 2011, Mr. Paras sent an email to Ms. Morana attaching scanned images oftwo documents:40• a Time Deposit certificate amounting to Php 1.25 million bearing the date ofplacement as 8 December 2010 under the stated account no. 5952-2816-76placed with BPI Family Savings Bank-Pedro Gil Branch, with an annual interestpayment schedule at 4% , maturing on 30 November 2015, signed by both Mr.Paras and Mrs. Morana at the bottom of the certificate as depositors, to whichMrs. Morana admitted that the signature on the certificate was hers. The
  14. 14. 14Scholarship Fund account no. 5953-3395-97 was indicated on the certificate asthe settlement account.41• a Maxi-Saver passbook No. 5953-3395-97 with the initial deposit of Php 239,355.74, also opened on the same date.42On the same date, Mrs. Morana sent an email to Mr. Paras sending all the financial reportfiles for 2010, and attaching a Powerpoint presentation of the financial report, which wasto be delivered by Mrs. Teresita C. Moran, who prepared the treasurer’s report on herbehalf because she was on maternity leave.43On 28 January 2011, it was Mr. Paras who presented the Treasurer’s Report before theAnnual General Assembly held at the National Library’s Epifanio de los SantosAuditorium in lieu of Mrs. Moran.44In May 2011, Mrs. Morana recounted that Mr. Paras came over to Ateneo ProfessionalSchools Library to deliver an envelope containing the TD Certificate of 1.25 million andthe passbook, which was received by fellow library staff Kristeen Molina, daughter ofpast president Marietta Molina, because Mrs. Morana was not in the office at the time.45There was no record of any turn-over of financial records effected between the outgoingand incoming Treasurers for the years 2011-2013 as admitted by 2011 Treasurer SoniaLourdes David, and 2012-2013 Treasurer Ms. Cecilia Lobo. Since the financial recordswere already at the Library of Ateneo Professional Schools, where both Ms. David andMrs. Morana were employed, Ms. David did not find any reason for a turn-over.Likewise, no listings or inventories were made. Ms. Lobo, likewise did not find itnecessary to move the records or have an inventory when she became the 2012 and 2013Treasurer, since Ms. David was the 2012-2013 Auditor, and therefore she had access tothe previous records whenever the need arose through Ms. David.46On 8 December 2011, a non-book cash transaction was posted on the passbook ofPAARL Scholarship Fund, Maxi-Saver passbook No. 5953-3395-97 with the amount ofPhp 50,000 deposited to the account,47which was presumed by the 2011 Treasurer, Ms.David, to be the interest earned for the year, since it was exactly 4% of the amount ofP1.25 million.48No effort was made by Ms. David to verify the deposit with the BPI Family SavingsBank. It was reported as interest earned from the time deposit in the Treasurer’sreport presented at the 2012 General Assembly held at De La Salle University-Dasmarinas on 27 January 2012.49The Reports of the Independent Auditors for 2010 (submitted on 17 December 2011)50and for 2011 (submitted on 11 July 2012) were done by the same auditor, Mario EnriqueA. de los Reyes, CPA Reg. No. 63651. In his report for both audits, he simply mentionedthe time deposit with the same statement (on page 15 and 16 respectively) as “TheAssociation has a time deposit of P1,250,000 at the Bank of the Philippine Islands(BPI)”.51According to 2012 President Gementiza, he was recommended by Mr.
  15. 15. 15Paras himself. And there was also no request for bank confirmation orreconciliation during the audit period made by the independent auditor concerningthe time deposits.52The Time Deposit certificate was kept in the vault of Ateneo Professional SchoolsLibrary under the custody of Ms. David until an inquiry on the time deposit interestearning for 8 December 2012 was raised.53The Discovery (3 years too late)During the Annual General Assembly held at the Technological Institute of thePhilippines-Quezon City Campus on 25 January 2013, then Treasurer, Ms. Cecilia Lobo,reported that no interest earned from the time deposits was reflected in her Financialreport for 2012, and that she would inquire about this from BPI Family Savings Bank(BFB).54On 7 February 2013 Ms. Lobo went to BFB-Pedro Gil Branch to inquire, and presentedthe Time Deposit Certificate. The bank manager then told her that the certificatebearing Account No. 5952-2816-76 was fake for the following reasons:55• The texture of the paper is different from the original, being only a scanned copy• The certificate should bear two signatures of bank officers• There is no annual interest payment schedule; it is either monthly or upon maturityMs. Lobo then immediately called 2013 President Manalo, 2013 Ex-Officio Gementiza,and 2013 Auditor Sonia David to notify them of this discovery.The Emergency Meeting56A meeting was called on 9 February 2013 held at the UST Library, and attended by allmembers of the 2013 Board except for Vice-President Marian Ramos-Eclevia and Dr.Teresita Hernandez. Also attending were members of the 2010 Board, namely: TreasurerAisa Morana, Secretary Gementiza, PRO Ana B. Fresnido, Victoria Baleva, and Ex-Officio Elvira Lapuz.Ms. Morana recalled that it was after the 2011 General Assembly when she received anenvelope containing the passbook and the TD certificate described by the bank as fake.She also recalled that she was asked by Mr. Paras to sign a blank check.Ms. Fresnido recalled that no withdrawal was discussed in any of the Boardmeetings. She further asked if the independent auditor had requested for thepresentation of the said TD during the auditing period, to which Ms. Gementizareplied in the negative, and that the independent auditor was recommended by Mr. Paras.Ms. Lapuz suggested a trip to the hometown of Mr. Paras in Pangasinan to locate him ordetermine the whereabouts of Mr. Paras.
  16. 16. 16The 2013 Board agreed to create a Fact-Finding Committee to conduct an investigationinto the missing time deposits.BFB Verifies It’s FakeOn 12 February 2013, President Manalo wrote a formal letter addressed to BPI FamilySavings Bank-Pedro Gil Branch requesting copies of documents submitted for theopening of PAARL Scholarship Fund and for a certification of the non-existence of theTime Deposit under the stated account no. 5952-2816-76, both documents dated 8December 2010.57The bank formally replied in its letter dated 27 February 2013, signed by the branchmanager, Ellery T. Peralta, stating that the Time Deposit Certificate presented to thebank on 7 February 2013 with the stated account no. 5952-2816-76 was notauthentic. Furthermore, the bank verified:58• The document was not issued by the branch.• There is no TD placement with this particular number.• The other details on the face of the document were also manufactured or faked.• The signatures appearing on the authorized signature portion are not the signatures ofbranch officers of the bank• The paper used was ordinary paper, a scanned copy to make it look original.• The checkwrite portion is just a copy and not from the official checkwriter of the bank.The bank attached a copy of the Secretary’s Certification of Board Resolution No. 006dated 9 November 2010, duly notarized on 11 November 2010, providing for the openingof a Scholarship Fund with Treasurer Morana and President Paras as the only authorizedsignatories, until the bank is otherwise notified by the corporation.59The Trip to PangasinanAs agreed upon during its emergency meeting, President Manalo, Ex-Officio.Gementiza, 2010 Ex-Officio Lapuz, Treasurer Lobo, accompanied by Mr. Rudy Lara ofForeFront Inc., whose vehicle was used as transport of the group, went to BarangayTambac, Malasique, Pangasinan on 16 February 2013, a Saturday, to locate Mr. Paras(who was reportedly no longer visible since July 2011), and to inquire about the fake timedeposit certificate and the money entrusted to him to be invested in the time deposit60.The group succeeded in locating house no. 295, which was indicated in the COMELECdatabase sourced by Ms. Gementiza as the address of his immediate relatives. The motherand sister of Mr. Paras, who opened the door of the house but refused to let them in, toldthe group that Mr. Paras was in Australia, although he was personally seen by Mr.Manalo in close range within the vicinity of the house.61
  17. 17. 17Mr. Rudy Lara of ForeFront Inc. attested to the fact that Mr. Paras was seen by Mr.Manalo. In his own Sinumpaang Salaysay, he further mentioned that he personally wentto his last known address in Metro Manila, at the request of the 2013 Board to help inlocating his last known address, only to find out that 43 Kapilugan Street, Bgy. DonaImelda in Quezon City, had been abandoned since it was destroyed at the height ofTyphoon Ondoy, and that Mr. Paras had occupied one of the rooms at this place as abedspacer only.62This address is significant because it was the one indicated at the backof the check Mr. Paras encashed on 8 December 2010.On 20 February 2013 the incumbent Board met in a special meeting to approve aresolution appointing Mr. Manalo as its authorized representative in the criminal/civil prosecution of a case to be filed against Christopher C. Paras for Estafa, andfor misrepresenting and pretending to have duly invested the amount of Php 1.25million by presenting to PAARL a copy of a falsified and spurious Peso TimeDeposit Certificate.63
  18. 18. 18Evaluation of Findings: Conclusions1. The Time Deposits ~ not Missing, but GoneFollowing the money trail was the easiest part of this investigation, because of theevidences uncovered and gathered during the week before and during the hearings.Documentary evidences collected by the Board have proven the following:• As early as 13 September 2010, barely five days after the maturity of the time deposit ofPhp1,040,000, the original TD certificate was turned over to 2010 President by the Treasurer, asevidenced in the photocopy of the certificate with the signatures of both 2010 President,Christopher C. Paras, and 2010 Treasurer, Mrs. Aisa dela Torre-Morana. This turn-over was donewithout the knowledge of the 2010 Board, as it was not even mentioned in the 15 September 2010minutes of meeting of the Board.• On October 18 a blank withdrawal slip facilitated the withdrawal of Php 250,000 in cash from thepassbook account, and on November 18, two withdrawal slips and an application for manager’scheck were pre-signed by the 2010 Treasurer to facilitate the withdrawal of the remaining amountfrom the passbook account, and the entire time deposits with Banco de Oro. Again, the moneyfrom the passbook account was withdrawn in cash as evidenced by copies of the withdrawal slips,the application form, and the manager’s check that Banco de Oro provided upon written requestof the 2013 Board on behalf of the Fact-Finding Team. There is no doubt that it was Mr. Parasand Mrs. Morana who signed all these documents.• Eighteen days later, the passbook account with barely Php 644 left was closed after this amountwas withdrawn, even without a Board Resolution or a Secretary’s Certification that the Board hadspecifically authorized the President and the Treasurer to withdraw the money and close thepassbook account. The only Secretary’s Certificate signed by 2010 Secretary Sonia M.Gementiza, which she did not even prepare but was simply asked by Mr. Paras to sign, was for aboard resolution involving the opening of an account with BPI Family Savings Bank, which waspurported to have been signed by the board at the meeting on 15 October 2010, when the meetingactually took place on 14 October, and which meeting the Secretary did not even attend. Copy ofthis Secretary’s certificate signed on 9 November 2010 was given by said bank upon writtenrequest of the 2013 Board.• The manager’s check for the time deposit issued by Banco de Oro, fortunately, was made in thename of the Association, PAARL, so it had to be deposited to the account of PAARL held by BPIFamily Savings Bank (BFB), as proven by the bank statement from BFB for December 2010where an entry for this deposit was made on 1 December 2010.• A week after it was deposited, on 8 December 2010, the one million plus was withdrawn through ablank check issued by the Treasurer, which enabled the President to encash the check, and depositpart of the cash (Php 239, 355.74) to open a savings account in the name of PAARL ScholarshipFund. The evidence proving this transaction was the returned check (pay-to-cash), and the back ofthe check, indicating the breakdown of cash received by Mr. Paras, his last known address, thenumbers of the IDs he presented, and the amount of Php 800, 644.26 taken out. There is no doubtthat the money was received by Mr. Paras because of his signature at the back of the check.• With the balance from this check withdrawal amounting to Php 800, 644.26 and the interestearnings of Php 449,355.74 (which were withdrawn in cash) totaling to P1.25 million, thePresident made it appear that the entire amount was invested in a time deposit with BPI Family fora period of five years. This is evidenced by the TD certificate which BFB has declared to be fake.As Mr. Paras himself corroborated, he sent an email dated 25 January 2011 to the Treasurerattaching scanned images of the TD certificate and the BPI passbook. It took more than sixmonths later for him to deliver the original certificate of time deposit, although he promised togive them to the 2011 Treasurer, Ms. Sonia Lourdes L. David, right after the General Assembly inhis 13 January 2011 email.
  19. 19. 19• So as not to stir up the hornet’s nest, a Php 50,000 cash deposit was made to the Scholarship Fundexactly one year after the opening of both the TD and the savings accounts, to make it appear thatthe TD has earned its first annual interest. This is evidenced by an entry of non-book cashtransaction in the passbook under the name of PAARL Scholarship Fund.It took another year before the TD was discovered to be fake, and only because interestincome that was expected to be posted for the second year did not come. This raisedundue alarm, and the 2013 Treasurer was prevailed upon to visit the bank to claim theinterest, and in so doing, upon verification, found that the TD certificate, which laydormant inside the vault of Ateneo Professional Schools Library, was just a piece ofpaper without value. Because the TD certificate was confirmed by the bank as “spurious,falsified, and fictitious”, the money that was meant to be invested in it was, withoutdoubt, gone. Clearly, based on these evidences, the 2010 President misappropriatedthe amount of Php 1.25 million, and “worse, he misrepresented and pretended tohave duly invested the money by presenting to the PAARL a copy of a falsified andspurious Peso Time Deposit Certificate containing the said amount.”2. Strategic LapsesThe Fact-Finding Board discovered in the course of its investigation that the key playersin the 2010 Board on this unfortunate incident committed several lapses in the handlingof the transfer of the time deposits:• A Conspiracy of Silence – The President made frequent visits to the Treasurer at AteneoProfessional Schools Library between the critical months of September until December 2010,without informing the rest of the members of the Board whether formally (during their meetings)or informally, particularly on the disposition of the time deposits. Likewise, the President metwith the 2010 Vice President, Roderick B. Ramos, at Starbucks located at Taft Avenue, near DeLa Salle University where the latter was then employed, to pick up the passbook for the timedeposit earnings with Banco de Oro-Taft Avenue, which was entrusted in his care andsafekeeping. This too was not disclosed to any other member of the Board, whether formally, inany of the Board meetings, or informally. The Vice President could have accompanied thePresident to witness his bank transactions, as the Banco de Oro-Taft Branch was located just infront of the University’s campus gate, and as expected by the 2010 Treasurer, but unfortunatelyhe did not.There were frequent electronic communications between the President and the Treasurer towardsthe end of the year, but these were not shared with the other members of the Board during theirmeetings as the emails evidenced only one-on-one communications. Therefore, based on thesefacts established during the hearing, the rest of the members of the Board were kept in the dark asto what had transpired on the disposition of the funds all along. Even the oversight body, theCouncil of Elders, was not informed, as required in the Manual of Policies and Procedures. Thismajor transaction was not even mentioned in the Treasurer’s Report, which was delivered by the2010 President, nor discussed at the 2011 General Assembly meeting. As normally required,board resolutions should have been ratified by the Assembly, but none was presented forratification.• Failure to secure bank certifications or bank reconciliations – The Treasurer failed to obtainbank certifications or reconciliations to verify the amounts placed on the Time Deposit and theMaxi-Saver Scholarship Fund, during the preparation of her annual financial report to be presentedat the 2011 Annual General Assembly, and simply relied on the figures sent via email by thePresident, which was contrary to established practice made by her predecessors. Likewise, in the
  20. 20. 20preparation of the financial records for the annual audit to be conducted by independent auditor,the Treasurer was expected to secure bank certifications to attest to the year-end balances of theAssociation’s bank accounts. Even past President Teresita C. Moran, who has familiarity with thisstandard accounting procedure, having been past treasurer of the association and other libraryorganizations, and who actually prepared the Treasurer’s Report and was initially tasked to deliverthe same at the 2011 Annual Assembly, failed to advice the Treasurer to get the bank certificationnecessary for a proper accounting report on the funds. Had the Treasurer, if properly advised,gone to the bank and presented the TD certificate, the discovery that it was fake would have beenestablished three years early, and not three years late. The President would have been made toexplain the existence of a “spurious, fictitious, and falsified” bank document right at the GeneralAssembly in January 2011.• Was there a Board Resolution or Not – A corporation "lives" only through the actions of itsboard of directors, and making resolutions to empower the officers to carry out the business isone of them. The board resolution is a written document that records a decision or action made bya Board of Directors during a board meeting containing their signatures on the document. TheSecretary is tasked to prepare Secretary’s certifications of Board Resolutions, duly notaried, formajor policy decisions.In this investigation, the policy decision on the final disposition of the time deposits wasconsidered a major one necessitating its inclusion in the agenda for a regular meeting of the Board.And yet, only one Secretary’s Certificate for a Board resolution was signed by the Secretary, i.e.,to open a PAARL Scholarship Fund (a requirement imposed by the bank in opening corporateaccounts). Equally as important if not more important is a separate board resolution empoweringthe President, NOT the Treasurer, to effect the transfer of the time deposit from one bank toanother, and to close the accounts for funds deposited in two different banks, namely Banco deOro and Philippine National Bank.The 2010 Secretary has maintained throughout the investigation conducted by the Fact-FindingBoard that there was no such resolution, even for the one prepared by Mr. Paras himself for theopening of an account with BFB, a fact corroborated by other members of the Board (whosesignatures would have been required for such a document) except for the Vice-President and theTreasurer, two key players in this incident.• Pay-to-Cash Checks and Vouchers and blank withdrawal slips – On many instances asevidenced by the records, the Treasurer prepared blank withdrawal slips and pay-to-cash checks,and, worse, blank checks (nothing written out on the Payee, Date, and Amount portions of thecheck) with her signature alone, with such careless abandon like it was the ordinary norm orestablished practice. There were even left-over pre-signed blank checks in the checkbook when itwas turned over (but dutifully cancelled to indicate the blank checks were not used).When questioned why the returned checks found in the financial records were not crossed, theTreasurer replied that she was not aware of what crossed checks meant, to which the Chair of theFact-Finding team in exasperation replied: “Any check that is crossed with two parallel lines,through the top left hand corner of the check, means that the check can only be deposited directlyinto a bank account and cannot be immediately encashed,” a practice prevalent among checkwriters to effectively protect the checks they write.It is likewise a standard best practice to issue check vouchers to accompany checks, to ensure thatthe check issued is properly acknowledged and used for the intended purpose written out on thevoucher. Both practices were not applied during the incumbency of this Treasurer, and theinternal Auditor also failed in calling the attention of the Treasurer to observe this practice in herregular examination of the disbursements of the funds. There were more than a dozen blankchecks issued “pay to cash” by the Treasurer, which were encashed by herself and Mr. Paras,without any corresponding voucher from January to December 2010, ranging from Php 15,000 toPhp 80,000.
  21. 21. 21• Failure in turn-over – There was no record of any turn-over, nor listings, or inventories offinancial records effected between the outgoing and incoming Treasurers for the years 2011-2013as admitted by the 2011 Treasurer Sonia Lourdes David and 2012-2013 Treasurer Ms. CeciliaLobo. Since the financial records were already at the Library of Ateneo Professional Schools,where both Ms. David and Mrs. Morana were employed, Ms. David did not find any reason for aturn-over. So did Ms. Lobo, who was the Auditor of 2011, and succeeded by Ms. David asAuditor for 2012-2013, Up until the very last hearing of the Fact-Finding Board, the financialrecords were kept by the 2011 Treasurer at her office.There are also no records to show that the 2011 President, Roderick Ramos, requested for anylistings or inventories of assets to be made immediately after the installation of the new Board inJanuary 2011. So, until the 2010 President disappeared into thin air, so to speak, nobody knewwhat happened to the Association’s laptop (which has an acquisition cost of Php 82,617), digitalcamera, and original corporate files, Board resolutions, minutes of meetings, and monthlyfinancial reports in his custody. Worse, because of this failure in turn-over, the mishandling offunds were left undetected.3. Breach of Fiduciary DutiesPeople in a position of trust or fiduciary relationship, such as officers, directors, high-level employees of a corporation or business owe certain duties to their principals, and inthe case of a professional organization such as PAARL, the positions of officers anddirectors are positions of trust. A fiduciary duty is often regarded as the highest dutyrecognized in corporate law. It encompasses many duties:(1) the duty of care – to act with diligence and with the care an ordinarily prudent person in a likeposition would exercise;(2) the duty of informed judgment – the process of gaining sufficient familiarity with thebackground facts and circumstances to make an informed judgment before acting;(3) the duty of disclosure – to disclose material / important information to shareholders / members;including conflicts of interest;(4) the duty of loyalty – to act in the best interests of the corporation.Simply put, a person charged with exercising fiduciary duties must discharge his/herfunctions (duties and responsibilities) with the utmost good faith, care, and the finestloyalty.Professionals are held to a higher standard of care than an ordinary reasonable personwould be expected. So, in this evaluation of the findings uncovered by the Fact-Findingteam, the key factor to be considered in determining negligence of the following officers,is whether the duty of care, informed judgment, disclosure, and loyalty was ever owed tothe association, and whether or not that duty was breached.President – Without any doubt, the 2010 President, as the chief executive of the Associationmandated to carry out the provisions of the By-Laws and its manual of rules and procedures to.ensure that the Association remains a vital organization and operates in a manner consistent withcorporate goals and objectives, only succeeded in damaging its good name and reputation as aleading professional organization. The scandalous loss of the association’s funds can only beattributed to unbridled mismanagement, lack of internal controls, and abuse of authority. To thevery end of his term, he abused the trust vested in him. As an oversight body, the Council ofElders should have been consulted, as mandated in the Manual of Policies and Procedures, inmajor decisions affecting the association, such as those dealing with financial transactions
  22. 22. 22involving major transfer/ disposition of funds and assets, but he failed dismally in securing theirconcurrence. Despite this lack of proper consultation, and the absence of a board resolutionspecifically authorizing him, and not the Treasurer, to close the account with BDO and move thefunds to BFB, he went ahead to withdraw and transfer the funds, and in so doing, misappropriatedthe sum of Php 1.25 million, by presenting “a spurious, fictitious, and falsified” Time Depositcertificate to prove it. Clearly, he is responsible for the irreversible crisis that the Association isnow faced with.Vice President – The 2010 Vice-President, glorified by his critical role in planning, executing andoverseeing the seminars and other activities entrusted to him, failed in his duty to keep the Boardinformed of his actuations as a key player in the final disposition of the time deposits. As thecustodian of the passbook for the interest earnings of the time deposit, he should have soughtauthority or clearance from the Board on the separate withdrawals made by Mr. Paras amountingto Php 449,355.74. He gave the passbook without even a handwritten receipt that it was turnedover to him. There are no records to show that he even disclosed this turn-over of the passbook toany other member of the Board, whether formally in any of the November and Decembermeetings, or informally.When he assumed the presidency in 2011, he showed the same disregard for turn-overs. Nolistings or inventories were made or required, and therefore no formal or informal turn-over wasever made. The books, records, and other assets of the association, such as the laptop and thedigital camera, which were kept by the 2010 President, were not turned over to the 2011 Boardwhich he now led. Thus, to this day, all the records, books, and other assets remain unaccountedfor.In the matter of the annual audit for 2010 and 2011, he failed to initiate or to cause the initiationof the preparation of the financial records required for the annual review of an independentauditor, knowing that when he assumed the Presidency in 2011, no annual audit for 2010 had beenmade. The annual audit for 2010 was done in December 2011, towards the end of his term, and theannual audit of 2011 was done in July 2012, more than six months after his term ended. Clearly,as the 2010 Vice President and 2011 President, he failed in his duty of care, informed judgment,disclosure, and loyalty.Treasurer – Without doubt, the 2010 Treasurer, who has an obligation to the members of theAssociation to scrupulously care for the money entrusted to her, failed miserably in handling thefinal disposition of the association’s funds, a super major transaction that she relegated into thehands of the President without informing anyone in the Board except the Vice-President. Incomplete disregard of proper accounting rules, she carelessly issued blank withdrawal slips andblank checks without any corresponding vouchers, and most importantly without any authorityfrom the Board as mandated by the Manual of Policies and Procedures. There were more than adozen blank checks issued “pay to cash” by the Treasurer, ranging in amounts from Php 15,000 toPhp 80,000, which were encashed either by her and Mr. Paras, without any corresponding voucherfrom January to December 2010.The withdrawals from the BDO funds and the subsequent encashment from the Maxi-checkaccount with BPI Savings Bank went un-detected, un-monitored and un-reported, all because shedid not even bother to find out from the President what withdrawals or encashments were made ofthe blank withdrawal slips and checks she signed. Had all these been meticulously attended to, thediscovery of the heavy withdrawals from the BDO accounts, and the encashment of the timedeposit from BFB would have surfaced sooner than three years later.Even the financial reports, required as the vehicles whereby the Treasurer is supposed to keep theAssociations Board and the members apprised of its fiscal condition on a regular basis were nottaken care of. She admitted that her monthly reporting, which should have been submitted oneweek before the regular meeting, was late. In fact, she admitted that she gave the reports to thePresident for her signature at the end of their term, and did not even keep copies for her
  23. 23. 23safekeeping. During the audit period (which normally should take place right after the end of thecalendar year) in early January 2011, when she was required to provide, within ten (10) days afterthe close of the calendar year, all appropriate documentation needed by the internal auditor and theindependent auditor for the annual report, and by the Bureau of Internal Revenue for the annualfiling of BIR Information tax return, she again failed in her duty to prepare the documents andrequest for bank confirmations or reconciliations for the ending year. Had this been meticulouslyattended to, the discovery of the fake TD certificate would have surfaced sooner than three yearslater.Worse, the 2010 Treasurer, Mrs. Morana, signed together with the 2010 President, Mr. Paras, “aspurious, fictitious, and falsified” Time Deposit certificate to prove that the amount of Php 1.25million was invested in a Peso Time Deposit with BPI Family Savings Bank.Secretary – Because of the failure of proper turn-overs, the 2010 Secretary, mandated to keep andmaintain records of all the corporate files, failed to exercise the delicate task of keeping these filesin her custody. This is evidenced even in the last entry in the Attendance Book for the 7thRegularMeeting of the Board in July 2010, where the signature of the President was not even recorded.There were no more entries in the Attendance Book for 2010 after this entry. When the term of the2010 Board ended, as Secretary, she was tasked also to turn over to her successor the corporatefiles, but since they were all in the hands of the President, who was reportedly no longer visible inmid-2011, they remain unaccounted for to this day. As Secretary, she was also required, under theManual of Policies and Procedures, to make a permanent record of all the approved resolutions,policies, and guidelines, and to ensure that all required documents are filed with the Securities andExchange Commission. The 2010 Amendments to the By-Laws, which were approved at the2010 General Assembly as published and disseminated in the January-March 2010 issue of theofficial newsletter of the association, were not submitted to SEC promptly as required during thefirst quarter of the same year, and this critical lapse on her part caused the delay in theirimplementation, and the unfortunate deliberation on the same issues in the 2011-12 GeneralAssemblies.Auditor – The Auditor shall audit and examine the receipts of all finances and disbursements offunds of the Association, and shall see to it that the disbursements are properly carried based onthe By-laws and the resolutions of the Board of Directors and the members of the Association.However, the internal Auditor of 2010, Ms. Veronica M. Jose, failed in calling the attention of theTreasurer to observe standard accounting practices and to refrain from issuing blank withdrawalslips and blank checks without their corresponding vouchers during her regular examination of thedisbursements of the funds, which is inherent in her function. Furthermore, had she been prudentand conscientious of her fiduciary duties of care, informed judgment, disclosure, and loyalty toprotect the best interests of the association, she should have voiced out during their regularmeetings, about the delay in the reporting of the finances, submission of financial reports that she,as auditor, was supposed to approve and sign, the issuance of blank checks without correspondingvouchers, the long delay in liquidation of cash.check advances and submission of official receiptsin support of cash disbursements, and the like. As Auditor, it was inherent in her duty to monitorthe withdrawals from the savings accounts, and check disbursements from the Maxi-checkaccount, and to go over the returned checks to ensure that disbursements were made as approvedby the Board. Had she been conscientious of her duties and responsibilities, the early discovery ofthe anomalous transactions in both savings and checking accounts would have led the Board totighten the internal controls over the management of the funds.The best way for a director to avoid liability for any breach of fiduciary duty is to do hisor her job correctly. Directors must understand that they are responsible for thegovernance of the corporation. They may delegate authority but ultimately the Board isresponsible, under the law, for the acts and omissions committed by its members.
  24. 24. 244. In Flagrant Disregard of RulesNo Reserve Fund – As stated in the By-Laws, separate accounts must be established for specificfunds meant for specific projects or purposes. An example is the Scholarship Fund, which isrestricted only for scholarship grants. However, only interest earnings from this fund may be usedfor this purpose. To date, this fund has a balance of Php 381, 678.57. Another is the ReserveFund. The amount of almost half a million pesos turned over to the Association as seed money inDecember 2004 (the year of its reincorporation) and deposited at BPI Family Bank in a savingsaccount was established to constitute the FIXED RESERVE FUND of the Association, and whichwas meant to cover at least the first six months of operation, and to be used only as a starting fundfor its operation by every incoming Board, with the intent that each years expenses shall besupported by that years income, and whatever amount was used from this FIXED RESERVEFUND shall be returned immediately as soon as practicable. This Fund should be maintained in aseparate savings account to distinguish it from the Operations Fund. In 2004, the amount of Php436,737.33 was placed in a savings account. Sometime afterward, however, this account wasclosed for unexplained reasons, and up to this date, there is no savings account deposited in thisReserve Fund. But the Maxi-Check account, which is the Association’s Operations Fund, has anoutstanding balance of almost a million pesos, Php 936,593.48, a monumental figure to be placedin a checking account, which is prone to mismanagement and risks.Conduct of board meetings – According to the Manual, all Board resolutions must be signed andsubmitted for ratification of the members during the annual General Assembly. This, however,was rarely observed. Likewise, the resolutions should be composed according to the followingguidelines:o The resolution shall be related to the purposes of the Association, or intended tosupport efforts to keep members aware about issues of importance to them, or totake positions on current critical issues related to library and information service.o The resolution should address only one topic or issue.o The resolution should be complete so that upon passage it becomes a clear and formalexpression of the opinion or will of the Assembly.o The intent, objective, or goal of the resolution should be clear to all. The resolutionshould make clear whether it concerns a general policy, a viewpoint, or a call forspecific action.o If the resolution calls for a specific action, or program with a timetable, the timetableshall be clear.o If the resolution has fiscal implications for the Association, an estimate of costs to beincurred should be included, or such financial implications should be explicitly provided.Clearly, the 2010 President acted beyond the authority of the Board, because there were noseparate resolutions for the transfer or movement of funds, nor for the closing of accounts.Had he also caused the preparation of a board resolution required for the filing of the 2010Amendments to the By-Laws, as advised by the Chairman of the Laws and LegislationCommittee then right after the 2010 Annual General Assembly, the amendments would havebeen filed with the Securities and Exchange Commission by now and properly implemented.It is now incumbent upon the 2013 Board of Directors to rectify this oversight.Audit reviews – Financial reviews of the Associations fiscal policies and the Boards financialstatus shall be conducted by the Council of Elders whenever the need arises, based on theassociation’s Manual. The Auditor shall audit and examine the receipts of all finances anddisbursements of funds of the Association, and shall see to it that the disbursements are properlycarried out in accordance with the Operating Budget, the By-laws, the resolutions of the Board of
  25. 25. 25Directors, and the members of the Association, again based on the Manual. The By-Lawslikewise, require the services of an external auditor to audit the bank accounts and financialcondition of the Association, and submit an annual audited financial statement to be included inthe treasurers report to the members at its annual meeting.Had these reviews been carried out promptly and dutifully, the scandalous mishandling of theassociation’s funds might have been averted.Qualifications for nomination in election – It was also during the clarificatory hearing that themembership qualification of the 2010 President who ran for the 2007 Board, and the 2010Treasurer and Vice-President, who both ran for election in 2008, was questioned, as the recordsshown from the 2005-2006 PAARL Directory indicated that all of them were not active payingmembers in 2006, in violation of the election rule in the By-Laws that nominees to the electionshould have been “active for the last three consecutive years at least three months before theannual election, but not later than August 31.” Furthermore, the Manual provides Guidelines forcandidate selection:o All nominees must be current regular members (licensed professionals) within the lastthree (3) years with a record of involvement with the Association or other libraryorganizations.o Candidates must be selected to represent an academic or research institution; no twocandidates may represent the same institution.o Candidates must be willing and able to devote time to the duties of the office and toAssociation affairs.In the case of the elections for the years in question, Mr. Paras and Mrs. Morana were nominateddespite their lack of “a record of involvement with the Association or other library organizations.”And Mr. Roderick Ramos was allowed to run alongside then Library Director, Mrs. Ana B.Fresnido, both representing the same institution, De La Salle University-Manila, when it was clearthat Mrs. Fresnido was endorsed by the institution, and Mr. Ramos was only endorsed by himself,in violation of the election rule that no two candidates may represent the same institution.The Fact-Finding Team also observed a flagrant violation of a provision in the By-Laws and in theManual that restricts the number of terms any member of the Board may serve to only three years:“The elected members shall hold office for a term of one year after their induction into office,subject to a maximum of three (3) terms in continuous succession ” The reason for this lies in thebelief that a longer period breeds undesirable familiarity, and that power corrupts. The 2010President, Mr. Paras, and the 2010 Auditor, Ms. Veronica M. Jose, had already served threesuccessive terms with their election in 2009. This issue had been raised in the 2009 meeting of theCouncil of Elders and past presidents, and the 2009 Board, represented by its President, Vice-President and Treasurer, had been duly reminded to observe this ruling in the coming election forthe 2010 Board. Despite this reminder, Mr. Paras and Ms. Jose were both nominated for the 2010Board, instead of being disqualified in accordance with the By-Laws, and furthermore, elected bythe 2010 Board as its President and Auditor, respectively.These lapses should be equally shared by the NOMELEC with the individual nominees, whointently pursued their ambition for reelection despite this restriction, and with the incumbentBoard then for having ultimately approved the nominations submitted by the NOMELEC.
  26. 26. 26RecommendationsIn light of the preceding discussion on the evaluation of findings and the accountability,liability and/or culpability of the above-mentioned officers of the 2010 Board,the Fact-Finding Board hereby recommends the following actions for immediateimplementation by the 2013 Board of Directors:The 2010 President“For misrepresenting and pretending to have duly invested the amount of Php 1.25million by presenting a copy of a falsified and spurious Peso Time Deposit Certificatecontaining the said amount” and “for misappropriating the same amount which wasmeant to be invested in a time deposit account in the name of the association”, the 2010President is now accused of the crime of Estafa before the Manila Prosecutor’s Office.This scandalous incident, under the cloud of fraud and deception, has caused irreparabledamage to the good name and high reputation of PAARL as one of the nationwideleading professional organizations of licensed librarians in the country. Withoutquestion, the Association sustained a huge loss due to his fraudulent and deceptive acts,his abuse of authority, and his breach of fiduciary duty on the highest level.Recommendation: 1) Expulsion from the Association and stripping of his serviceaward2) Continued pursuit of the criminal complaint filed with theManila Prosecutor’s Office for the crime of Estafa3) Initiation of administrative proceedings for disciplinary actionwith the PRC-Board for LibrariansThe 2010 TreasurerFor being an incompetent treasurer, and for the gross and reckless mishandling of theAssociation’s funds at a most crucial moment, without question, the 2010 treasurer sharesthe accountability for the disastrous and scandalous loss of the funds. As treasurer, sheshould have personally handled the movement of the funds, with the knowledge of, andprior clearance from, the Board, being the most responsible officer to ensure the safety ofthe assets of the association. All the acts of commissions and omissions of the Presidentcould not have succeeded had she not cooperated. It was the height of grossirresponsibility when she issued a blank check, making it easily possible for the Presidentto encash the check (withdraw the time deposit funds in cash), when all she needed to dowas to write the name of “PAARL” as Payee on the check, knowing that the amount onthe check was supposed to be placed in a time deposit, writing out the amount in wordsand in figure, and crossing it (because a crossed check can only be deposited to theaccount of the payee), before signing and giving it to the President. Worse, the 2010Treasurer, Mrs. Morana, signed together with the 2010 President, Mr. Paras, “a spurious,
  27. 27. 27fictitious, and falsified” Time Deposit certificate to prove that the amount of Php 1.25million was invested in a Peso Time Deposit with BPI Family Savings Bank.For her failure to do this and other breach of fiduciary duties as mentioned above, whichduties are normally expected of a competent treasurer, she must be held equally liable forthe loss of the funds.Recommendation: 1) Expulsion from the Association2) Initiation of a preliminary investigation in a criminal actionfor possible criminal liability as an accessory in the crime ofEstafa3) Initiation of administrative proceedings for disciplinary actionwith the PRC-Board for LibrariansThe 2010 Vice-PresidentFor his failure to fulfill his fiduciary duty to keep the Board informed of his actuationsinvolving the disposition of the association’s funds, as evidenced by his failure to seekclear-cut authority or clearance from the Board on the withdrawals made by Mr. Paras, bygiving the passbook which enabled Mr. Paras to make the withdrawals without theknowledge of the Board, for not even disclosing this turn-over of the passbook to anyother member of the Board; for dereliction of duty by his disregard for proper turn-overs,or inventories required after the installation of the succeeding Board, thereby causing theloss of the records, books, and other assets of the Association, which to this day remainunaccounted for; and for his failure to initiate or to cause the initiation of the preparationof the financial records required for the annual review of an independent auditor for theyears ending 2010 and 2011, which resulted in the critical delay in the audit review of thefinancial conditions of the association during these two years, clearly, as the 2010 VicePresident and 2011 President, he shares with the Treasurer a certain degree of culpabilitybecause the 2010 President could not have withdrawn the money in the Conference TrustFund without the passbook which he held in trust, and furthermore, had he instructed the2011 Treasurer to prepare the records for the timely audit in January 2011 and in January2012, as stipulated in the Manual, the discovery of the Time Deposit certificate wouldhave surfaced sooner.Recommendation: Permanent disqualification from any appointive or electiveposition in the AssociationThe 2010 SecretaryFor neglect of duty in signing the Secretary’s Certificate of a Board Resolutionauthorizing the opening of an account with BPI Family Savings Bank which wasprepared by the President, and not by her, without clear authority from the Board,knowing that she was not present at the meeting stated in the board resolution, and for
  28. 28. 28lapses in her keeping and maintaining the corporate files under her custody as Secretary,the 2010 Secretary is partly to blame for the loss of the corporate files.Recommendation: Permanent disqualification from any electivepositions in the AssociationThe 2010 AuditorFor dereliction of duty in the exercise of the audit functions and duties as mandated inthe By-Laws and the Manual of Policies and Procedures, in particular, for her failure incalling the attention of the Treasurer to observe standard accounting practices and torefrain from issuing blank withdrawal slips and blank checks without their correspondingvouchers during her regular examination of the disbursements of the funds, for her failurein reminding the Treasurer not to cause delays in the reporting of the finances,submission of reports, liquidation of cash advances, and submission of official receipts insupport of cash disbursements, and the like, and for her failure to monitor the bankstatements which recorded the entries for the check disbursements in December, inparticular, the encashment of the check withdrawing the time deposit on 8 December2010, the 2010 Auditor is partly to blame for the gross mishandling of the Association’sfunds. The timely reporting of the anomalous transactions in both savings and checkingaccounts might have inspired the Board to tighten the internal controls over themanagement of the funds, and might have led to the early discovery of the fake TD.Recommendation: Permanent disqualification from any appointive or electiveposition in the AssociationThese recommendations are made without prejudice to the evaluation of findings and/orrecommendations to be arrived at in future proceedings (such as to be discussed in thespecial meeting of members to be called as soon as this report is submitted) as to theculpability of other officers or directors.In addition to the above recommendations, the Fact-Finding Board submits thefollowing for strict compliance of the 2013 Board:• A review of the Manual of Policies and Procedures to flesh out the provisions onFunding and Fiscal Policies, with the end in view of tightening internal controlsover the management of the association’s funds and assets;• The strict implementation of the provision in the Manual for the opening of asavings account (preferably a Maxi-Saver account which commands a higherinterest yield than a regular savings account) with BPI Family Savings Bank tocontain the Reserve Fund (amounting to at least Php 800,000), and to keep only
  29. 29. 29the amount representing the net income earned by the previous Board in theOperation Fund, to be deposited in the Maxi-check account with BFB;• The strict observance of proper turn-overs, listings and inventories before theinstallation of the in-coming Board and not after, as part of the familiarization ofthe in-coming Board on the “nuts and bolts” of the operation and management ofthe Association;• The strict observance of rules on the proper conduct of Board meetings, whereprovisions in the Manual will be clearly spelled out on the standard design andformat of Agenda and Minutes of Meetings, formulation of the content of boardresolutions, standard reporting procedures, including matters to be reported out inthe President’s and Treasurer’s reports, consolidation and ratification of boardresolutions during the Annual Assembly, and the like;• The formulation of Standard Accounting and Auditing Rules to serve asGuidelines for the proper management of the Association’s funds, to beincorporated as part of the Manual of Policies and Procedures, with particularemphasis on regular reporting of treasurer’s reports during meetings, the properissuance of checks (preferably crossed checks) and vouchers detailing everytransaction, with proper clearance/approval from the Board on everydisbursement, the procedure for bank verifications of accounts in preparation forannual audit, policies on regular submission of membership fees and othercollections, the maintenance of petty cash fund and its replenishment, and theregular renewal of the Treasurer’s Bond;• The formulation of Election Rules to serve as Guidelines for all future elections ofthe Board and its Officers, to be incorporated as part of the Manual of Policiesand Procedures; and,• The rectification of a clear mistake made by the 2010 Board and overlooked bythe 2012 Board, by filing the Amendments to the 2004 By-Laws which wereapproved and carried out in the Annual General Assembly of 2010 held at St.Paul-Quezon City, as evidenced in PAARL Newsletter, Jan-March 2010 issue,where on page 2 this passage was written : "Ms. Fe Angela Verzosa, Chair of theLaw and Legislation Committee for 2009, presented three amendments to thePAARL by-laws, which were all approved by the body." It is now incumbentupon the 2013 Board of Directors to rectify this oversight..(End of the Report’s Recommendations)
  30. 30. 30List of Documents CollectedAnnex A Letter of Appointment of Fe Angela M. Verzosa to lead the Fact-FindingTeam, 14 February 2013Annex A1 Letter of Request to BPI Family Savings Bank, dated 12 February 2013Annex A2 Letter of BPI Family Savings Bank in reply to the request, dated 27February 2013Annex B Transcript Notes of First Hearing, 28 February 2013Annex B1 Transcript Notes of Second Hearing, 7 March 2013Annex B2 Transcript Notes of Third Hearing, 14 March 2013Annex C Complaint-Affidavit of Ms. Cecilia D. Lobo, dated 21 February 2013Annex C1 Complaint-Affidavit of Mr. Sonny Boy T. Manalo, dated 21 February2013Annex D Minutes of Emergency Meeting of the 2013 Board, 9 February 2012Annex D1 Minutes of Meeting of the 2010 Board, 15 September 2010Annex D2 Minutes of Meeting of the 2010 Board, 14 October 2010Annex E Email sent to Mr. Roderick B. Ramos, dated 16 March 2013Annex E1 Attachment of Mr. Roderick B. Ramos to an email sent to Mr. Sonny BoyManalo, dated 17 March 2013Annex E2 Email sent by 2010 Vice-President Roderick B. Ramos to the 2010Treasurer Aisa de la Torre- Morana, dated 8 September 2010Annex E3 Email sent by Fe Angela M. Verzosa to Christopher Paras, dated 13October 2010 offering her advice/recommendations on the time depositAnnex E4 Email sent by Ana B. Fresnido to Fe Angela M. Verzosa, 15 October 2010Annex E5 Email sent by 2010 President Christopher C. Paras to Aisa dela Torre-Morana, dated 3 January 2011
  31. 31. 31Annex E6 Email sent by 2010 President Christopher C. Paras to Aisa dela Torre-Morana, dated 13 January 2011Annex E7 Email sent by 2010 President Christopher C. Paras to Aisa dela Torre-Morana, dated 25 January 2011Annex E8 Email sent by Aisa dela Torre-Morana to Mr. Paras, 25 January 2011Annex F SEC incorporation papers in PAARL Online official website:https://sites.google.com/site/paarlonlineorg/home/homeAnnex G Audited Financial Report, 2004Annex G1 Report of Independent Auditors, 2010 submitted by Mario Enrique A. delos Reyes on 17 December 2011Annex G2 Report of Independent Auditors, 2011 submitted by Mario Enrique A. delos Reyes on 12 July 2012Annex G3 Treasurer’s Report for 2009Annex G4 Treasurer’s Report for 2011Annex G5 Treasurer’s Report for 2012Annex H PAARL Newsletter, 2010 January-March issueAnnex H1 PAARL Newsletter, 2010 April-June issueAnnex H2 PAARL Newsletter, 2011 January-March issueAnnex I Amendments to the By-Laws of 2010Annex J Time Deposit Certificate with BPI Family Savings Bank declared to befake by BPI Family Savings Bank – Pedro Gil BranchAnnex J1 Time Deposit Certificate with Equitable-PCIB with handwritten remarks“Turned Over Original Certificate” and the signature of Christopher ParasAnnex K Turn-Over Document signed by Jocelyn T. Balangue and Aisa de la Torre-Morana on 13 February 2010Annex L Manual of Policies and Procedures outlining the responsibilities of theCouncil of Elders
  32. 32. 32Annex M 2010 Secretary’s Certification of Board Resolution No. 6, dated 9November 2010 attached to the Letter of BPI Family Savings Bank, dated27 February 2013Annex M1 Secretary’s Certificate of Board Resolution, dated 20 February 2013Annex N Withdrawal slip from PAARL Conference Trust Fund Account No.45800-883-12 with BDO, dated 18 October 2010Annex N1 Withdrawal slip from PAARL Conference Trust Fund Account No.45800-883-12 with BDO, dated 18 November 2010Annex O Application form for Manager’s check and Manager’s Check issued byBDO dated 18 November 2010Annex P Bank Statement for the month of December 2010 for the Maxi-CheckAccount 5951-078-206 with BPI Family Savings AccountAnnex Q Check no. 086073 of PAARL’s Maxi-Check Account 5951-078-206 withBPI Family Savings Bank “pay to cash” in the amount of Php 1,040,000Annex Q1 12 “blank” checks issued “pay to cash” Nos. 41629-30, 41637-39, 41643,41646, 86053, 86055, 86060, 86074, and 86077Annex R Passbook of Maxi-Saver Account No. 5953-3395-97 under the name ofPAARL Scholarship Fund with BPI Family Savings Bank-Pedro GilBranchAnnex S Sworn statement of Aisa dela Torre-MoranaAnnex S1 Sworn statement of Sonia Lourdes L.DavidAnnex S2 Sworn statement of Cecilia D. LoboAnnex S3 Sworn statement of Sonia M. GementizaAnnex S4 Sworn statement (Joint) of Olivia R. Aler, Marian R. Eclevia and JorgeErwin RadaAnnex S5 Sworn Statement of Ma. Theresa B. VillanuevaAnnex S4 Sinumpaang Salaysay ni Ginoong Rudy Lara ng ForeFront, Inc.Annex T Attendance Book of PAARL
  33. 33. 33End Notes1Letter of Appointment of Fe Angela M. Verzosa to lead the Fact-Finding Team, 14 February 2013 (AnnexA)2Transcript Notes of Fact-Finding Board, First Hearing, 28 February 2013 (Annex B)3Complaint-Affidavit of Ms. Cecilia D. Lobo, dated 21 February 2013 (Annex C)4Minutes of Emergency Meeting, 9 February 2012 (Annex D)5Transcript Notes of Fact-Finding Board, Second Hearing, 7 March 2013 (Annex B1)6Transcript Notes of Fact-Finding Board, Third Hearing, 14 March 2013 (Annex B2)7Email sent to Mr. Roderick B. Ramos, dated 16 March 2013 (Annex E)8SEC incorporation papers PAARL Online: https://sites.google.com/site/paarlonlineorg/home/home(Annex F)92004 Audited Financial Report (Annex G)10PAARL Newsletter, 2010 January-March issue, pp 1-2 (Annex H)11Ibid., p.712Ibid., p. 2132010 Amendments to the By-Laws (Annex I)142004 Audited Financial Report (Annex G)15Time Deposit Certificate with Equitable PCIBank (Annex J)16Treasurer’s Report for 2009 (Annex G3)17PAARL Newsletter, 2010 April-June issue, page 6 (Annex H1)18Turn-Over Document signed by Jocelyn T. Balangue and Aisa de la Torre- Morana on 13 February 2010(Annex K)19Attachment of Mr. Roderick B. Ramos to an email he sent to Mr. Sonny Boy Manalo, dated 17 March2013, (Annex E1) corroborated by Sworn Statement made by Aisa de la Torre- Morana (Annex S)20Email sent by 2010 Vice-President Roderick B. Ramos to the 2010 Treasurer Aisa de la Torre- Morana,dated 8 September 2010 (Annex E2)21Minutes of Meeting of 2010 Board, 15 September 2010 (Annex D1)22Manual of Policies and Procedures outlining the responsibilities of the Council of Elders (Annex L)
  34. 34. 3423Time Deposit Certificate with Equitable-PCIB with handwritten remarks “Turned Over OriginalCertificate” and the signature of Christopher Paras (Annex J1)24Email sent by Fe Angela M. Verzosa to Christopher Paras, dated 13 October 2010 re Time Deposits(Annex E3)25Minutes of Meeting of 2010 Board, 14 October 2010 (Annex D2)26Email sent by Ana B. Fresnido to Fe Angela M. Verzosa, 15 October 2010 at 5:08pm (Annex E4)27Withdrawal slip from PAARL Conference Trust Fund Account No. 45800-883-12 with BDO, dated 18October 2010 (Annex N)28Attachment of Mr. Roderick B. Ramos to an email he sent to Mr. Sonny Boy Manalo, dated 17 March2013 (Annex E1)29Secretary’s Certification of Board Resolution No. 6, dated 9 November 2010 (Annex M)30Application form for Manager’s check, withdrawal slip, and Manager’s Check issued by BDO dated 18November 2010 (Annex O)31Ibid.32Withdrawal slip from PAARL Conference Trust Fund Account No. 45800-883-12 with BDO, dated 18November 2010 (Annex N1)33Bank Statement for the month of December 2010 for the Maxi-Check Account (Annex P)34Check no. 086073 of PAARL’s Maxi-Check with BPI Family Savings Bank (Annex Q)35Passbook of Maxi-Saver Account No. 5953-3395-97 under the name of PAARL Scholarship Fund withBPI Family Savings Bank-Pedro Gil Branch (Annex R)36Check No. 086073 (photocopy of the reverse or back portion of the check) of PAARL’s Maxi-Checkwith BPI Family Savings Bank (Annex Q)37Email sent by 2010 President Christopher C. Paras to Aisa dela Torre-Morana, dated 3 January 2011(Annex E5)38Passbook of Maxi-Saver Account under the name PAARL Scholarship Fund (Annex R)39Email sent by 2010 President Christopher C. Paras to Aisa dela Torre-Morana, dated 13 January 2011(Annex E6)40Email sent by 2010 President Christopher C. Paras to Aisa dela Torre-Morana, dated 25 January 2011(Annex E7)41Transcript Notes of Fact-Finding Board, Second Hearing, 7 March 2013 (Annex B1)42Passbook of Maxi-Saver Account No. 5953-3395-97 under the name of PAARL Scholarship Fund withBPI Family Savings Bank-Pedro Gil Branch (Annex R)43Email sent by Aisa dela Torre-Morana to Mr. Paras, 25 January 2011 (Annex E8)
  35. 35. 3544PAARL Newsletter, January-March issue 2011, page 2 (Annex H2)45Sworn statement made by Aisa dela Torre-Morana (Annex S)46Sworn statements made by Sonia Lourdes L.David and Cecilia D. Lobo (Annexes S1 and S2)47Passbook of Maxi-Saver Account under the name PAARL Scholarship Fund No. 5953-3395-97 (AnnexR)48Sworn statements made by Sonia Lourdes L.David (Annex S1)49Treasurer’s report for 2011 presented at the 2012 General Assembly held 27 Jan 2012 in DLSU-D(Annex G4)50Report of Independent Auditors, 2010 submitted by Mario Enrique A. de los Reyes on 17 December2011, page 16 (Annex G1)51Report of Independent Auditors, 2011 submitted by Mario Enrique A. de los Reyes on 12 July 2012,page 15 (Annex G2)52Sworn statement of Sonia M. Gementiza, 28 February 2013 (Annex S3)53Sworn statement of Sonia Lourdes L. David (Annex S1)54Minutes of Emergency Meeting, 9 February 2013 (Annex D) and Complaint-Affidavit of Cecilia D.Lobo (Annex C)55Minutes of Emergency Meeting, 9 February 2013 (Annex D)56Ibid.57Letter of Request to BPI Family Savings Bank, dated 12 February 2013 (Annex A1)58Letter of BPI Family Savings Bank in reply to the request, dated 27 February 2013 (Annex A2)59Secretary’s Certification of Board Resolution No. 6, dated 9 November 2010 attached to the BFB Letter(Annex M)60Complaint-Affidavit of Mr. Sonny Boy T. Manalo, dated 21 February 2013 (Annex C1)and Sworn statement of Sonia M. Gementiza(Annex S3)61Sworn statement of Sonia M. Gementiza (Annex S3)62Sinumpaang Salaysay ni Ginoong Rudy Lara ng ForeFront Inc. (Annex S4)63Secretary’s Certificate of Board Resolution, dated 20 February 2013 (Annex M1)

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