The Office of the Ombudsman has found probable cause to indict former Surigao del Norte Governor Sol Matugas and former provincial budget officer Juanita Arlan before the Sandiganbayan over the alleged illegal transfer and disbursement of P60 million in provincial funds.

The amount, originally earmarked for disaster risk reduction and management, was reportedly diverted to purchase learning and instructional materials — an act deemed irregular by the Ombudsman.

In a resolution dated 24 June and obtained by reporters, Ombudsman Samuel R. Martires found probable cause to charge former Surigao del Norte Governor Francisco Matugas and former provincial budget officer Ma. Myrla Padayhag for violating Section 3 of Republic Act 3019, or the Anti-Graft and Corrupt Practices Act. The charges arose from a complaint filed by Oscar M. Pospia Jr. on 6 June 2023.

The Ombudsman, in its resolution, stated, “Evidently, there was no ordinance authorizing Matugas to augment and transfer funds. Hence, the realignment and disbursement of funds amounting to a total of P60 million used in the procurement of the Disaster Risk Reduction — Climate Change Adaptation (DRR-CCA) mainstreamed learning materials and the supplementary learning materials had no basis and, therefore, were illegal.”

Records show that the Surigao del Norte provincial government entered into three Memoranda of Agreement (MoAs) with local Schools Division Superintendents, transferring P60 million in provincial funds to the Department of Education (DepEd) for the procurement of books and other learning materials for elementary school students.

“The funds were diverted from the public purpose for which the said funds were intended. Corollary, the subject MoAs entered into by Matugas with three Schools Division Superintendents were unauthorized and bereft of any legal basis,” said the Ombudsman.

While a provincial governor, according to law, is authorized to grant financial assistance to line agencies such as the DepEd, the Ombudsman said the diverted funds-covered by a MOA entered by and between Matugas and DepEd — was taken from the funds of the Provincial Disaster Risk Reduction and Management Office — in which no amount from the PDRRMO fund was allotted for financial assistance to the DepEd.

The Ombudsman said Matugas and Padayhag cannot evade liability by invoking an irrelevant Department of the Interior and Local Government Memorandum Circular on fund transfers, emphasizing that the P60 million was specifically intended for use by the PDRRMO, not the DepEd.

The Ombudsman rejected the arguments of Matugas and Padayhag that they should be presumed to have acted regularly in the performance of their duties, ruling that their claim of good faith reliance was without merit.

The government anti-graft watchdog, in reply to the former governor and provincial budget officer’s assertion, stated: “This argument lacks defensive value considering that the mere act of diverting public funds from purposes other than for which they were originally intended consummates the crime regardless of the lack of criminal intent.”

Complainant Oscar M. Pospia Jr. alleged that the fund diversion occurred in March 2022 — just weeks before the May elections and at a time when Surigao del Norte was still struggling to recover from the widespread destruction caused by super typhoon "Odette" in December 2021.

He said the P60 million was originally mandated for disaster response and rehabilitation, specifically to aid communities in Surigao del Norte that bore the brunt of super typhoon Odette’s devastation.

Pospia said the brazenly illegal acts was committed despite the overwhelming disaster aftermath, speaks of the gross callousness and total indifference of the Matugases against the people of Surigao del Norte.

“At that time of devastation, we needed roofs over our heads, clean and safe drinking water and classroom repairs, yet while we were in terrible anguish, the assistance given were storybooks of 'Joy Joy the Jolly Boy,' 'Mimi and the Mouse' and other similar books for school children,” he added.