SALN Compliance: Government Must Notify Officials and Allow Correction Before Penalties

The Supreme Court has clarified a critical protection for government officials and employees: before they can be held administratively liable for errors, omissions, or non-submission of their Statements of Assets, Liabilities, and Net Worth (SALNs), the government must first comply with the mandatory review and compliance procedure under Section 10 of Republic Act No. 6713, the Code of Conduct and Ethical Standards for Public Officials and Employees.

In Carlos v. Department of Finance - Revenue Integrity Protection Service (G.R. No. 225774, April 18, 2023), the Court En Banc reversed the dismissal of a Department of Finance employee, ruling that the government's failure to notify him of SALN defects and give him an opportunity to correct them barred any administrative liability.

The Case: A Tax Specialist Dismissed for SALN Omissions

Jessie Javier Carlos, a Tax Specialist at the Department of Finance, was investigated by the DOF-Revenue Integrity Protection Service (DOF-RIPS) in 2012 for alleged discrepancies between his lifestyle and his SALNs from 2000 to 2010. He was accused of failing to disclose a house and lot in Tondo, a Toyota Innova, and his wife's business interest in Armset Trading, among other alleged omissions.

The Office of the Ombudsman found Carlos guilty of grave misconduct and gross neglect of duty and dismissed him from service. On appeal, the Court of Appeals modified the ruling, finding him guilty of dishonesty but maintaining the penalty of dismissal.

Carlos argued that he completed his SALNs in good faith and that he should have been given an opportunity to correct his alleged omissions under Section 10 of RA 6713.

The Issue: Is the Review and Compliance Procedure Mandatory?

The central question was whether the government's failure to comply with the review and compliance procedure in Section 10 of RA 6713 bars administrative liability for SALN errors or omissions.

Section 10 requires the head of each government office to establish procedures for reviewing SALNs to determine whether they were submitted on time, are complete, and are in proper form. If a SALN is found defective, the head of office must inform the reporting individual and direct them to take corrective action.

Under the implementing rules, the official or employee must be given a non-extendible period of 30 days to comply. Only if they fail to correct or submit their SALN within that period can disciplinary action be taken.

The Ruling: No Compliance, No Liability

The Supreme Court granted Carlos's petition and reversed his dismissal. The Court held that the review and compliance procedure is absolutely mandatory. Without compliance, liability for failure to file, or for omissions or errors in SALNs, will not attach.

The Court explained that the procedure "institutes a mechanism for review and an opportunity to rectify errors" specifically with respect to: (1) failure to submit on time; (2) incomplete SALNs; and (3) formally defective SALNs. The reporting individual cannot be subjected to disciplinary action without being informed of their errors or omissions and afforded an opportunity to comply.

In doing so, the Court explicitly abandoned earlier rulings in Pleyto v. Philippine National Police Criminal Investigation and Detection Group and related cases, which had held that the review and compliance procedure was merely internal and did not apply when the Ombudsman was investigating SALN violations. The Court found these rulings "contrary to the clear mandate of Republic Act No. 6713" and "in direct conflict with the text of the law."

Why This Matters: Protecting Good-Faith Errors

The Court emphasized that the real evil the law seeks to address is the accumulation of ill-gotten wealth, not innocent mistakes. The review and compliance procedure serves as a "buffer that prevents the haphazard filing of actions against public officials and employees."

The Court warned against "weaponizing" SALNs against officials who made errors in good faith. It noted that "well-meaning, albeit occasionally imprecise or neglectful, public officers should not be made to suffer the heavy penalties that are meant for those who are unequivocally nefarious."

The Court also clarified that RA 6713, being more specific and more recent than RA 3019 (the Anti-Graft and Corrupt Practices Act), takes precedence for the prosecution of SALN-related offenses.

Practical Takeaways

• Government agencies must notify officials of SALN defects. Before any penalty can be imposed, the head of office must inform the official or employee of any errors, omissions, or late submissions and direct them to take corrective action.

• Officials get a 30-day window to correct. Once notified, the official has a non-extendible period of 30 days to comply. Only after this period lapses without compliance can disciplinary action proceed.

• The Ombudsman is not exempt. Even though the Ombudsman has broad powers to investigate administrative complaints, it cannot prosecute SALN violations if the review and compliance procedure was not followed.

• Earlier contrary rulings are abandoned. Cases like Pleyto and Carabeo that excused noncompliance with the review procedure are no longer good law.

• Good-faith errors are protected. The SALN system is meant to catch deliberate concealment of ill-gotten wealth, not to punish casual, isolated, or infrequent non-declarations that do not point to a scheme to mislead.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.