Nicholas Ring, the controller at Pine Ridge Construction Management in Williamsport, Pa., joins us to discuss how COVID-19 has challenged governments and government CPAs, how you define transparency as it relates to government CPAs, and more. This podcast complements his column in the winter 2022 Pennsylvania CPA Journal.

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By Bill Hayes, Pennsylvania CPA Journal Managing Editor

Podcast Transcript

Strong ethical practices are a must for all CPAs, but today, in a podcast based on his Ethics column in the winter 2022 Pennsylvania CPA Journal, Nicholas Ring, controller at Pine Ridge Construction Management in Williamsport, joins us to discuss why they are particularly important for CPAs who work in government. He'll discuss ways by which the COVID pandemic has challenged governments and government CPAs, how you define transparency as it relates to government CPAs, and more.

Can you tell us a few of the reasons why strong ethical practices are so important for CPAs in government in particular?

[Ring] I think when you're considering ethics and government the main thing that has to be in mind is that we're dealing with large sums of public funds, and when public funds are involved, it's vital that these are handled within a strong ethical framework.

During the COVID pandemic, you have quite a few tranches of federal dollars come in with limited guidance at the onset in a lot of cases, so those governments that had a good tone at the top, operating within a strong internal control structure, had strong federal fiscal management policies, had an easier time with it. I think that's kind of the central focus here is that we're dealing with public funds if you're a CPA working in government.

What were some of the ways by which the COVID-19 pandemic served to challenge the ethical foundations of governments and government CPAs?

[Ring] I'm going to relate back to those tranches of funding. Whether it be the CARES funding, or what have you, there are large swaths of federal dollars coming out through the state, even through the CRBG, with vague guidance on how to deploy it, what's allowable, and what's not oftentimes. Especially with funding coming through the coronavirus relief funds, you look in the compliance supplement and it's not entirely clear.

So those governments that had sound policies in place were better able to deal with that and fall back on their foundations and effectively and ethically deploy that funding.

Can you define transparency, which is talked about in the article, as it pertains to government CPAs and how it helps ensure ethical boundaries aren't crossed?

[Ring] Well, transparency equals visibility, right? Transparency allows for citizens to see the way that public funds are being deployed for the advancement of their communities. Transparencies within governments themselves – now I'm talking within the organization – allows employees to better understand conduct expectations and to better perform their job functions.

Transparency – inward and outward – is key for governments. Meaning, transparency to the public and transparency up and down the organization.

What sorts of policies and procedures should governments have in place to ensure ethical wrongdoing doesn't take place and hold people accountable if it does?

[Ring] When I think of ethics, one of the most effective ways to promote ethical conduct is your training. Periodic trainings that are mandatory to stress acceptable conduct. We're talking about federal funding to stress the compliance around that and the best ways to conduct yourself in terms of preventive measures. I would say training, detective measures. Obviously you're much better off if you have a sound system of internal controls.

I think that if you're an organization that requires that training, that requires employees to participate in webinars or in-person training, and you're an organization with strong controls, you're going to be able to more effectively promote an ethical environment.

In terms of accountability, that's kind of tough. That's tougher to answer because that's more dependent on what sort of ethical infraction we're talking about. I think that's kind of dependent on the situation, but that goes back to just having formalized policies as well.

What does the Governmental Finance Officers Association code of ethics say about maintaining ethical contact?

[Ring] If you look up the GFOA code of ethics, there's a few general concepts that they touch on, and those concepts would be integrity and honesty. Producing results, treating people fairly, diversity and inclusion, or liability and consistency. A few things from that code that I chose to highlight in my article center around transparency and accountability.

The GFOA mentioned as part of showing integrity and honesty that it's vital that governmental finance officers manage public funds honestly and transparently. Within that code as well, they also mention things that ... they don't directly reference accountability, but they do mention a few concepts that are centered or rooted in accountability, I guess you could say. Those concepts being doing high-quality work, developing strong financial policies, producing reliable and timely information, which we as CPAs know is vital to what we do in any industry.

The GFOA code of ethics touches on a broad range of topics, but within that transparency and accountability is pretty evident.

What are the top challenges out there to ensuring ethical behavior?

[Ring] I think these days that the primary challenge there would be the pace in which events are occurring, especially when you consider the COVID-19 pandemic. I hate to keep harboring on these tranches of funding, but as these things come out, it's like a whirlwind, like X clients receiving X amount of dollars. Here are these regulations, and regulations to come.

Keeping up with the unfolding of events and the flow of information, and just making sure that you're doing things in accordance with the standards and in accordance with laws and regulations, and staying on top of the endless fire hose of information out there.