Those in governmental administration are entrusted with effectively managing and deploying taxpayer funds for the advancement of the communities in which they serve. Ethical practices are paramount to good governance, and ethics in government have never been more relevant than they are right now.
To relieve the financial burden of the COVID-19 pandemic, there were multiple tranches of federal dollars that passed through multiple levels of government, oftentimes with limited guidance. The governments that had sound internal controls over compliance and sound ethical policies and procedures in place were in better positions to effectively and ethically manage such a condition.
The influx of massive amounts of relief funds may have been novel, but governments manage and direct the use of large sums of public funds in the form of tax dollars all the time. Governments must adhere to some important core tenets of ethical conduct to effectively manage those funds. Arguably, the most important of these is transparency. Transparency in the budgeting process allows for public input in the allocation of funds as well as citizen efficacy in the governing process. It also helps citizens understand the need for incremental tax hikes or governmental action that may have a financial impact on the citizenry. Transparency in the bidding process, for example, ensures that vendors are not given preferential treatment and the process is done in accordance with state and federal guidelines. Transparency in the normal operations of government assists in promoting another tenet in governmental ethics: accountability.
Governments must have policies and procedures to hold officials accountable for any wrongdoings, misuse of funds, or an override of the policies in place to prevent misconduct. Governments should implement proper lines of communication to make it easier to report misappropriation of funds or other ethical breaches by those who can direct the use of funds. These two tenets are clear when reviewing the Government Finance Officers Association (GFOA) code of ethics.
The GFOA code of ethics touches on many topics to keep in mind when developing and maintaining a code of ethics. The code cites the following values: integrity and honesty, producing results for one’s community, treating people fairly, diversity and inclusion, and reliability and consistency. The GFOA mentions that, as part of showing integrity and honesty, it is vital that finance officers “manage public finances honestly and transparently.” The GFOA also references doing high-quality work, developing strong financial policies, producing reliable information, and providing timely information.
The most effective ways to ensure ethical practices by those in government are to enact policies and procedures that promote ethical conduct, establish a strong tone at the top geared toward ethical conduct, and ensure that correct ethical conduct is promoted in training materials, meetings, and everyday interactions at all levels of authority.
Nicholas Ring, CPA, is controller at Pine Ridge Construction Management in Williamsport. He can be reached at firstname.lastname@example.org.
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