Module 2 21

Module 2
Financial Management
and Accountability

Public office is a public trust. Public officers and employees must at all
times be accountable to the people, serve them with utmost responsibil-
ity, integrity, loyalty, and efficiency, act with patriotism and justice,
and lead modest lives.
Article XI, Section 1, 1987 Philippine Constitution

A ny book on government accounting and accountability will not fail

to cite this important constitutional provision. Time and again, it has
been emphasized that public office is a pub-
lic trust to remind government officials and
employees alike that they, as Justice
Malcolm puts it, are mere agents and not
rulers of the people. He puts it thus: “…no
one man or set of men has a proprietary or
contractual right to an office, but … every
officer accepts office pursuant to the pro-
visions of law and holds the office as a trust
for the people whom he represents.”
Concept of Accountability
The concept of accountability in govern-
ment has constantly been emphasized. This
is evident in continuously evolving fiscal
policies; the evolving budgeting, account-
ing and auditing rules and regulations; the
passage of landmark laws on ethics and
Objectives
At the end of this module, you
should be able to:
1. Relate financial manage-
ment to the concept of ac-
countability;
2. Differentiate the various
types and levels of account-
ability in government agen-
cies;
3. Illustrate the type of ac-
countability relationships at
all levels of government; and
4. Describe the accountabil-
ity relationships in your
agency.
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22 PM 230: Financial Management in Government

accountability in government; and media exposés on graft and corrup-

tion involving government officials. Debates on the extent and levels of
accountability and responsibility of government officials and employees
have been conducted, raising public awareness of and vigilance with re-
gard to the way government agencies and personnel are managing public
resources.

Writing in 1994, Tantuico (1994:61) said that accountability is a funda-

mental but underdeveloped concept. Scholars and practitioners freely use
the term to refer to answerability for one’s actions or behavior. Adminis-
trators and agencies are accountable to the extent that they are required
to answer for their actions.

Let us look at some definitions of accountability and what experts say

about them.

Accountability is ...

a requirement to give an explanation for one's actions. (Oxford Ad-

vanced Learners' Dictionary, cited in Iqbal, 1995:54)

a viable instrument of control which can be operative to the extent

that public servants have authority commensurate with their re-
sponsibility, acceptable measures of performance evaluation are
utilized, results of such evaluations are communicated both to the
seniors and to the person concerned, appropriate, equitable and
timely measures are enforced in response to results achieved and
the manner in which they are achieved. (Dwivedi, cited in Iqbal,
1995:54)

the evolution of the actions of the appointed career employees and

officials in terms of whether their actions are within or outside the
bounds of their authority. (Cariño, cited in Iqbal, 1995:54)

the obligations of persons/authorities entrusted wit public resources

to report on the management of such resources and be answerable
for the fiscal, managerial and programme responsibilities that are
conferred. (Tokyo Declaration of Guidelines on Public Account-
ability, 1985, cited in Iqbal, 1995:54)
J.S. Mill
the ‘answerability’ of public officials for what they do in the course
of their work. (Sto. Tomas, 1999:171)

the obligation (of public officials) to answer for the fulfillment of

assigned and accepted duties within the framework of the author-
ity and resources provided. (Kernaghan and Langford, 1990)

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 Module 2 23

Some of the key concepts mentioned in these definitions are:

• control
• answerability
• reporting requirement
• evaluation
• (taking action) within the framework of one’s authority

The definitions and the key words clearly suggest the following:

• Accountability is an instrument of control.

• To be accountable is to be responsible for one’s actions.
• There is the obligation to fulfill assigned and accepted duties.
• Actions and decisions should be done within the framework of one’s
authority.

Do you agree with this distillation? Take another view of the definitions.
Or try to find some other definitions of accountability. These should con-
tain the same elements that we have identified here. You may add for
greater emphasis that accountability supports the presence of laws, rules
and regulations, and the requirement of compliance to these, especially
by accountable and responsible officers. Also, you may want to highlight
the outcome and impact of management decisions. Thus, we would not
want to limit performance by looking into the inputs, outputs and pro-
cesses, but also examine the economy, efficiency, and effectiveness of gov-
ernment decisions.

To summarize, government organizations and their officers, being trust-

ees of public resources, are required to be accountable managers, respon-
sible in safeguarding government resources, and to exercise their entrusted
authority with prudence and with a conscience for the common good.

It is also observed that accountability and responsibility are two integrated

concepts. There is responsibility when one is made accountable. The per-
formance of those accountable is measured based on a set of rules and
written objectives. A government official is held responsible since he/she
has been given the authority to carry out agency functions. This authority
is contained in laws, rules and regulations. Public officials are expected to
adhere to laid down rules and regulations.

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24 PM 230: Financial Management in Government

Changing Notion of Public Accountability

The ethic of accountability proceeds from the generally accepted prin-
ciple that public office is a public trust. Public officials who have been
entrusted to exercise authority are made accountable in the discharge of
their functions.

Over the years, the meaning of accountability in the Philippines has

evolved. It has been used synonymously with the Castillan concept of
honor, termed delicadeza, which means a sense of propriety and keen sen-
sitivity to how the greater public regards a government official or em-
ployee. The issue of delicadeza crops up almost every time there are per-
ceptions of wrongdoing or conflict of interest on the part of a public offi-
cial (Sto Tomas, 1995:172).

The notion of public accountability in the Philippines was at its height at

the turn of the century just after the Americans took over from Spain as
the country’s colonial masters. The Philippine bureaucracy was formally
organized, with the notion of accountability as its strongest character.
Sto. Tomas said that the blending of the Castillan sense of honor and the
well-ordered and transparent control systems of the Americans combined
well to propagate the notion of accountability among government em-
ployees and the public. During that time and later under the Philippine
Commonwealth, working for the government was something to be proud
of; it was an honour. The accountability ethic was practiced to the hilt.
Notwithstanding the lack of formal codes of conduct for government offi-
cials, resignation from public office at the slightest whiff of a scandal or
wrongdoing was the norm (Sto.Tomas, 1995:172).

Modernization, economic development, and increased government regu-

lations changed the value system from one premised on self-restraint to
one that is enforced largely through regulation. The growth in size and
complexity of government and the corresponding delegation of power
and authority to numerous individuals has required the passage of laws,
rules and regulations and many more laws even on the same subject. As
Sto. Tomas (1995:173) puts it, accountability has come to be associated
with the ability, perhaps even skill, to live within the law or not run afoul
of it.

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Types of Accountability
A number of good materials have been written on the topic of account-
ability. In this section we discuss the types of administrative accountabil-
ity identified by Cariño (1984).

Administrative accountability
Cariño (1983) defines accountability as “the evolution of the actions of
the appointed career employees and officials in terms of whether their
actions are within or outside the bounds of their authority. She distin-
guished between four variants of accountability in the following stan-
dard questions central to administrative accountability:

• Who is accountable?
• To whom is he/she accountable?
• To what standard or value is he/she accountable?
• By what means is he/she accountable?

On the basis of these questions, Cariño classified administrative account-

ability into traditional accountability, managerial accountability, program
accountability, and process accountability.

Traditional accountability

This focuses on the regularity of fiscal transactions and compliance and

adherence to legal requirements and administrative policies. This kind of
accountability is a responsibility of the bureaucrat who has been given
the authority to discharge a particular function. Authority is owed to
superiors in the bureaucracy, especially the legislature and the courts,
which may inquire into the way the duties have been carried out.

The standards of performance are those of legality and regularity. The

test of legality involves adherence to the provisions of laws and regula-
tions governing the agency. It also refers to whether the person or persons
have been authorized to make or take such acts or decisions (Cariño,
1984:104).

In order to attain its objectives and to safeguard the use of public resources,
each agency is required to set up procedures for each transaction and ex-
pected to ensure that these are followed fairly and equitably, without giving
undue or special regard for clients or interested parties. These procedures are
themselves an important means of ensuring traditional accountability.

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26 PM 230: Financial Management in Government

Managerial accountability

This is concerned with efficiency and economy in the use of public funds,
property, and human and other resources. The person accountable is the
manager, and he/she is responsible to his/her superior in the bureau-
cracy, the President, and external controllers such as the legislature, which
provide the resources for the operation of the agency.

An efficient operation means holding the costs constant while increasing

the benefits; holding the benefits constant while decreasing the costs; in-
creasing the costs at a slower rate than the benefits; and decreasing the
costs at a lower rate than the benefits. On the other hand, economical
operation is the elimination or reduction of needless costs (Cariño,
1984:105).

Managerial accountability is promoted by programs that cut the red tape

of government procedures or which substitute less costly alternatives to
existing practices. Such programs range from attempts at work simplifi-
cation and revision of forms all the way to systems improvement and
reorganization.

Program accountability

This is concerned with results of government operations. The main focus

is the head of the agency as the manager of its programs, although exter-
nal agents like the legislature may inquire into what a program accom-
plishes. It uses the standard of economy, efficiency, and effectiveness, and
covers the department as a whole in the case of national offices, the cor-
poration in all its branches in the case of corporations, and the province,
including all its municipalities, in the case of local governments.

To attain program accountability, a number of management tools are avail-

able such as the use and analysis of productivity and work measures,
program evaluation, and cost-benefit analysis, as well as broad-based or-
ganizational changes like management by objectives and organization
development.

Social accountability, often considered a variant of program accountabil-

ity, mainly inquires into whether the administrative activity inspires gen-
eral confidence and serves what are widely regarded as desirable social
ends.

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Process accountability

This emphasizes procedures and methods of operation and focuses on

the black box inside systems which transforms inputs (the concern of tra-
ditional and managerial accountability) to outputs (the concern of pro-
gram accountability). This type of accountability recognizes that some
goals may not be measurable directly, and surrogates representing how
goal-oriented activities may be performed are used instead.

Table 2-1 is a comparison of the four types of administrative accountabil-

ity in terms of how they address the four standard questions central to
administrative accountability.

Table 2-1. Comparison of the different kinds of accountability

Types of Administrative Accountability
Questions
Traditional Managerial Program Process

Who is Employees Administrator Administrator Administrator

accountable? and officials

To whom is People through Same as in column Same as in Same as in

he account- legislature, 1 column 1, pro- columns 1
able? President, fessional and 3, direct
Constitutional standards and accountability
bodies, individual to the people
hierarchy conscience through their
participation
in negotiations

To what Regularity, Economy and Economy, 3Es, decen-

standard or legality, and efficiency efficiency, and tralization and
value is compliance effectiveness participation
he/she (3Es)
accountable?

By what Line-item Management Comprehensive Negotiations

means is he/ budgeting, audit; systems audit, program
she account- traditional improvement evaluation,
able? accounting, evaluation,
standard productivity
operating measurement
procedures

Source: Carino, 1984:110

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28 PM 230: Financial Management in Government

Activity 2-1
Give concrete examples of accountability.

Alternative systems of public accountability

Tantuico (1994) identifies four alternative systems of accountability, each
based on variations involving two critical factors (Tantuico, 1994:61):

• Whether the ability to define and control expectations is held by some

specific entity inside or outside the agency; and

• The degree of control that the entity is given over defining the
agency's expectations.

The interplay of these two factors generates four types of accountability

as shown below.

Table 2-2. Four types of accountability

Source of agency control

Degree of control over
l agency actions Internal External
Low 1. Bureaucratic 2. Legal

High 3. Professional 4. Political

Source: Tantuico, 1994:61

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 Deg

Module 2 29

In discussing the concept of accountability, Tantuico places emphasis on

the source of agency control and on the degree of control over agency
actions. Regarding the first factor, the management of agency expecta-
tions through accountability mechanisms calls for the establishment of
some authoritative source of control. Internal sources of control rely on
the authority inherent in either formal hierarchical relationships or infor-
mal social relationships within the agency.

External sources of control reflect a similar distinction, for their authority

can be derived from either formalized arrangements set forth in laws or
legal contracts or the informal exercise of power by interests located out-
side the agency.

A second ingredient in any accountability system is the degree of control

over agency choices and operations exercised by those sources of control.
A high degree of control reflects the controller's ability to determine both
the range and depth of actions which a public agency and its members
can take. A low degree of control, in contrast, provides for considerable D
discretion on the part of agency operatives (Tantuico, 1994:63).

Bureaucratic or hierarchical accountability

Here, expectations of public administrators are managed by focusing on

the priorities of top management. Bureaucratic accountability functions
through a system of (1) an organized and legitimate relationship between
a superior and a subordinate in which the need to follow “orders” is un-
questioned; and (2) close supervision for a surrogate system of standard
operating procedures or clearly stated rules and regulations.

The actions associated with bureaucratic accountability are following or-

ders, adhering to standard operating procedures, and accepting direct
supervision. The behavioral expectation in this relationship is obedience.
Employees have little discretion and are typically subjected to supervisory
and reporting systems intended to ensure that the tasks are performed
correctly. This system is relevant for agencies with tasks involving routine
and repetitive jobs, such as issuing checks and processing tax returns.

Legal accountability

This type is similar to the bureaucratic form in that it involves the fre-
quent application of control to a wide range of public administration ac-
tivities. In contrast to bureaucratic accountability, however, legal account-
ability is based on the relationship between a controlling party outside the
agency and members of the agency. That external party is not just any-

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30 PM 230: Financial Management in Government

one; he/she is one in a position to impose legal sanctions or assert formal

contractual obligations. Typically, these outsiders make the laws and other
policy mandates.

Professional accountability

This occurs with greater frequency as governments deal increasingly with

technically difficult and complex problems. Here, public officials must
rely on the skills and expertise of employees for appropriate solutions.
Such relationships are based on the assumption that the experts and hon-
orable persons in the organization are able to make the best judgements
of the right thing to do and will do it without the need for close scrutiny.
Such a relationship is founded on trust and confidence, together with the
belief that professionals will monitor and regulate themselves through
adherence to professional and peer-based review.

Political accountability

If “deference” characterizes professional accountability, “responsiveness”

characterizes political accountability systems. The key relationship under
this system resembles that between the public administrator and his/her
constituents (those to whom he/she is accountable). Here, the primary
question becomes: Whom does the public administrator represent? The
potential constituencies include the general public, elected officials, agency
heads, agency clientele, other special interest groups, and future genera-
tions.

Alignment between behavioral expectations

and administrative tasks
The effectiveness of accountability mechanisms depends on the employ-
ees’ understanding and appreciation of the complexities associated with
accountability relationships. There exists an "ideal" fit between the situa-
tion or task facing a government official or employee and the various
types of accountability relationships. Such a fit would be based on two
factors:

1. The degree of simplicity of the tasks a government official or employee

is performing; and
2. The primary or salient expectation about his/her behavior in perform-
ing that task.

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These two factors are combined in Table 2-3. The factor of simplicity is
expressed by a scale ranging from routine (simple) to non-routine (com-
plex) tasks. Behavioral expectations are associated with accountability
relationships of obedience, obligation, responsiveness, and accountabil-
ity. The ideal configuration reflects the appropriate public administrative
and organizational behavior.

Table 2-3. Factors for “ideal” fit

Administrative Tasks
Behavioral
Expectations Routine Nonroutine

Obedience Hierarchical

Obligation Legal

Responsiveness Political

Responsibility Professional

Source: Tantuico, 1994

Note that bureaucratic accountability is most relevant and effective where

work is routine and simple, such as in sorting out mail. In routine tasks,
obedience to directives and compliance with standard operating proce-
dures are the norm.

When conditions are less routine, government officials and employees

are able to exercise an increased level of discretion, depending on a given
situation. Under this circumstance, legal accountability is the best fit. The
decision maker in this case has room to make decisions but only under
relatively restricted guidelines derived from external sources.

In matters that are much less routinary, a decision maker needs even
greater discretion. Under conditions where public policy sets out objec-
tives, authorizes actions, and provides some resources but fails to offer
detailed instructions or guidance, government officials and employees must
focus on some point of reference to receive instructions.

In non-routine complex situations, the value and role of expertise increases

substantially, and responsible behavior emerges as the standard. At this
point, professional accountability is most appropriate, where the norm is
deference to the expertise of government officials and employees or agencies.

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In reality, this combination does not come neat and clean. At any given
time, there is a high probability that a government official or employee
will have to deal with more than one set of expectations and more than
one accountability relationship simultaneously.

Given the complex nature of accountability dynamics, choosing manage-

rial roles is bound to be difficult. Accountability relationships are continu-
ous and evolving.

Combining the two previous tables, we can see for instance that in hierar-
chical accountability, the source of control is internal, and the degree of
control is high. Officials and employees are expected to obey established
rules. This is particularly applicable in highly routine tasks.

Table 2-4. Accountability relationships

Characteristics of Types of Accountability Relationships Sample
Accountability Situations
Relationships Source of Degree of Behavioral Administrative Where These
Control Control Expectations Tasks Apply

Hierarchical Internal High Obedience Highly routine Sorting of mail;

processing tax
returns

Legal External High Obligation Less routine Contractual

obligations

Political External Low Responsive- Less nonroutine Political

ness decisions

Professional Internal Low Responsi- Highly Research work

bility nonroutine

Source: Tantuico, 1994

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 Module 2 33

Activity 2-2
Provide three more sample situations for each type of accountabil-
ity relationship. It is best to cite examples from your own agency/
organization.

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34 PM 230: Financial Management in Government

Accountability Mechanisms
Accountability mechanisms take various forms. There are laws and their
implementing rules and regulations which usually set forth what govern-
ment officials and employees can and cannot do in the course of their
official duties, and oversight agencies tasked to safeguard public inter-
ests. Oversight agencies have been discussed in the previous module.

Legal Framework

PD 1445 or The Government Auditing Code

of the Philippines

The Audit Code is a consolidation and upgrading of scattered pieces of

laws, executive orders, letters of instruction, and presidential decrees on
government accounting and auditing. It also clarifies the fiscal responsi-
bility of the government manager vis-á-vis the auditor.

The fiscal responsibility of the heads of operating units and all those exer-
cising authority over a given agency's fiscal affairs, transactions and op-
erations is repeatedly emphasized in the COA's mandate and the State
Audit Code.

Government auditors today essentially perform a review activity, a post-

audit function. In the past, auditors pre-audited all government transac-
tions, thereby exercising financial, and by implication, operational con-
trol over an agency. The complete withdrawal since 1995 of the pre-audit
function is in line with the principle that the responsibility to ensure effi-
ciency, economy, and effectiveness in government operations rests on the
head or chief of every government agency, as well as the policy that COA
has sole authority to determine the scope of its audit.

RA 3019 of The Anti-Graft and Corrupt Practices Act

This is the first and most comprehensive Philippine law intended to act
specifically against official malfeasance. The law specifies 11 instances as
corrupt practices in addition to acts or omissions already penalized by
existing law, in particular the Penal Code, such as entering into a con-
tract that is grossly disadvantageous to government, receiving gifts in con-
nection with any contract between the government and another party,
and nine other similar offenses.

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 Module 2 35

RA 3019 also requires every government employee to regularly submit a

sworn statement of assets and liabilities as a deterrent against amassingof
wealth while in public office.

Executive Order No. 292 or The Revised

Administrative Code of 1987

This law is currently the basic legislation by which the entire range of
administrative and financial concerns of the bureaucracy operates. It sets
forth the major structural, functional, and procedural principles and rules
of the public service machinery. It has seven books. Chapter 1 of Book 1,
entitled “General Principles Governing Public Officers,” reiterates among
other provisions the requirement for all government personnel to declare
their assets, net worth and liabilities. Book VI is devoted entirely to na-
tional government budgeting. It sets forth the ground rules for the alloca-
tion and disbursement of government money.

RA 6713 of The Code of Conduct and Ethical Standards

The full title of this law is indicative of its intentions and scope: “An Act
Establishing a Code of Conduct and Ethical Standards for Public Officials
and Employees, To Uphold the Time-honored Principle of Public Office
Being a Public Trust, Granting Incentives and Rewards for Exemplary
Service, Enumerating Prohibited Acts and Transactions and Providing
Penalties for Violations Thereof and for other Purposes.” The law was
enacted in mid-1988 in response to widespread public outcry over alleged
financial improprieties of high government officials (Sto. Tomas, 1995:180).

Before the passage of RA 6713, there really were no specific or detailed

accountability sanctions against administrative lapses like failure to act
on a pending transaction. On the other hand, the sanctions for financial
wrongdoing were developed and progressively detailed and upgraded
through the years. Apart from the proliferation of financial prohibitions
for government personnel, the presence of a special anti-graft prosecutor
and a special anti-graft court for erring government officials and employ-
ees is also indicative of the emphasis on financial accountability.

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36 PM 230: Financial Management in Government

RA 6713 does not limit the accountability ethic to the financial aspect. It
specifies the norms of behavior that public officials and employees are
expected to live by in the course of their official duties as well as their
personal lives. These norms include:

• Commitment to public interest

• Professionalism
• Justice and sincerity
• Political neutrality
• Responsiveness to the public
• Nationalism and patriotism
• Commitment to democracy
· Simple living

The actual accountability mechanisms are specified, and government of-

ficials and employees are under obligation to:

• Act promptly on letters and requests (within 15 days from receipt

thereof).
• Submit annual performance reports.
• Process documents and papers expeditiously (such documents and
papers are to contain as far as practicable not more than three signa-
tories).
• Make documents accessible to the public.

Activity 2-3

Get a copy of RA 3019 and list the nine other offenses singled out
by the law.

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 Module 2 37

Accountability and responsibility

Let us dwell a little on the difference between accountability and respon-
sibility. PD 1445 settles once and for all when one is merely responsible
(management aspect) and when one is accountable (fiscal aspect)
(Tantuico, 1994:71). The legal provisions on these are:

Section 4(4). Fundamental Principles. Fiscal responsibility shall, to

the greatest extent, be shared by all those exercising authority over
financial affairs, transactions, and operations of the government
agency.

Section 51. Primary and Secondary Responsibility. (1) The head of

the agency of the government is immediately and primarily re-
sponsible for all government funds and property pertaining to his
agency. (2) Persons entrusted with the possession or custody of
the funds or property under the agency head shall be immediately
responsible to him without prejudice to the liability of either party
to the government.

On accountability and responsibility for government funds and property,

Chapter 5 of the Audit Code clarifies who has primary and secondary
responsibility for public funds, the records and reports to be maintained,
and the schedule and mode of rendering such reports.

Section 375. Primary and Secondary Accountability for Govern-

ment Property. (a) Each head of department or office of a prov-
ince, city, municipality or barangay shall be primarily account-
able for all government property assigned or issued to his depart-
ment or office. The person or persons entrusted with the posses-
sion or custody of government property under the accountability
of any head of department or office shall be immediately account-
able to such officer.

Section 377. Measure of Liability of Persons Accountable for Gov-

ernment Property. (a) The person immediately accountable for
government property shall be liable for its money value in case of
the illegal, improper, or unauthorized use or misapplication thereof,
by himself or any other person for whose acts he may be respon-
sible, and shall be liable for all loss, damage or deterioration occa-
sioned by negligence in the keeping or use of such property unless
it is proved that he has exercised due diligence and care in the
utilization and safekeeping thereof.

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38 PM 230: Financial Management in Government

Section 633. Persons Accountable for Government Funds or Prop-

erty. Every officer of the government of the Philippines whose
duties permit or require the possession or custody of the govern-
ment funds or property shall be accountable and responsible there-
fore and for safekeeping thereof in conformity with the provision
of this law.

Section 634. Primary and Secondary Accountability for Govern-

ment Property. The director or other head of a Bureau or Office of
the national government is immediately and primarily account-
able for all government property pertaining to his bureau or of-
fice, and the treasurer of a province, municipality, municipal dis-
trict, or other local division, shall be likewise primarily account-
able for all government property pertaining to his province xxx as
the case may be.

In addition, Sections 101 and 102 of the Audit Code categorically draw a
distinction between accountability and responsibility for government funds
or property.

Section 101: The officer in possession or custody of government

funds or property by reason of his duties shall be accountable there-
for and for the safekeeping thereof. He is the real accountable of-
ficer within the contemplation of law. As such, he shall be prop-
erly bonded in accordance with law.

Section 102: The head of any government agency at all levels,

whether national, corporate, or local, is made immediately and
primarily responsible for all government funds and property per-
taining to his agency. Secondary responsibility, on the other hand,
is made to rest on persons entrusted with the actual possession or
custody of the funds or property. The imposition of primary and
secondary responsibilities to the agency head and his accountable
officers, respectively, is without prejudice to their liability to the
government.

To illustrate, the Cashier, who is entrusted with the actual custody of

funds, is the accountable person, while his/her immediate supervisor, the
Chief of Cashier's Office, is the responsible person. Table 2-5 summarizes
the meaning of accountability and responsibility.

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 Module 2 39

Table 2-5. Accountability and responsibility

Accountability Responsibility

Scope Officers in actual possession or Head of any government

custody of government funds agency at all levels,
or property by reason of whether national,
his/her duties corporate or local

Legal Properly bonded in Command responsibility,

consequences accordance with law i.e., assigned responsibility
without bond

Example Cashier Chief of Office

In so far as reporting is concerned, we have the following provisions of

the Audit Code.

Section 43. Submission of Annual Reports. Heads of the several

branches, subdivisions, departments and agencies or instrumen-
talities of the government shall prepare and submit annual reports
to the president on or before the first day of July of each year.

Section 57. Failure to Submit Reports. Failure on the part of agency

heads, chief accountants, budget officers, cashiers, disbursing of-
ficers, administrative or personnel officers and agencies to submit
trial balances, work and financial plans, special budgets, reports
of operation and income, current agency plantilla of personnel
and such other budget document shall automatically cause the
suspension of payment of salaries until they have complied with
the requirement of the DBM. No appropriation authorized in the
GAA shall be made available to pay the salary of any official or
employee who violates the provisions of this section, in addition to
any disciplinary action that may be instituted against such erring
official or employee.

Section 104. Record and Reports Required by Primarily Respon-

sible Officers. The head of any agency or instrumentality of the
national government or any government-owned or controlled cor-
poration and any other self-government board or commission of
the government shall exercise the diligence of a godfather of a family
in supervising accountable officers under his control to prevent
the incurrence of loss of government funds or property; otherwise
he shall be jointly and solidarity liable with the person primarily
accountable therefor. The Treasurer of the local government unit
shall likewise exercise the same degree of supervision; otherwise
he shall be jointly and solidarity liable with them for the loss of
government funds or property under their control.

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40 PM 230: Financial Management in Government

Section 112. Recording of Financial Transactions. Each govern-

ment agency shall record its financial transactions and operations
conformable with generally accepted principles and in accordance
with pertinent laws and regulations.

On review of budget and performance, Section 9 of Book 6, Chapter 2 of

EO 292 1445 gives us this provision:

Section 9. Performance and Financial Review. Analysis of agency

performance, the evaluation of performance, the evaluation of
performance relative to costs incurred, and the review of agency
operating systems and procedures are inherent in the budget pro-
cess. Agencies shall therefore design and implement (1) manage-
ment information systems yielding both performance and finan-
cial information which will adequately monitor and control bud-
get implementation, and (2) improvements in operating systems,
procedures and practices so as to ensure that the targets approved
in budget authorization are in fact attained at minimum cost.

Issues and Problems Regarding

Accountability
In 1995, administrative and financial accountability was the subject of an
ASEAN-SAARC Conference on Administrative and Financial Account-
ability. The Conference was part of the continuing re-examination of the
meaning, structure, and process of administrative and financial account-
ability. It is believed that questions on standards of accountability and
enforcement methods of various accountability systems have to be asked
again and again, particularly whether accountability measures have con-
tributed in making government systems and government organizations
more efficient, effective and responsive to the people, especially the poor.

It was emphasized in that Conference that accountability has to be de-

fined in terms of the accountability of government officials and employ-
ees to the people through systems which have been enforced constitution-
ally and legally in a given polity or country.

The other important points of discussion are summarized as follows..

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Spelling out the role of politicians

at various levels
This role should be spelled out and translated to the normal workings of
departments and other regular government agencies. This should be done
because once elected, politicians become administrators and managers of
government programs, and are therefore entrusted with similar responsi-
bilities in carrying out government programs and handling government
resources.

Strictly adhering to the “rule of business”

in government
If the “rules of business” in government have been laid out carefully, there
should be no difficulty implementing or following them. The problem lies
in the fact that these are ignored by many officials, legislators, bureau-
crats, and administrators alike. Similarly, not many officials are familiar
with the laws, rules and regulations.

Having heads of offices do their homework

Heads of offices have been found not to do their homework, and tend not
to be able to resist political pressure. Courage and conscience play a role
here. "If there is no display of courage, there is no observance of con-
science. Conscience and courage have to go together" (Tadin, 1995:5).
Administrators should have the freedom to speak their minds and to tell
on wrongdoing, with legal and institutional support from the system.

Strengthening information flows

Weak or vague information flows tend to weaken accountability, making
it easy for people to give in to the tendency to hide things.

Simplifying procedures
Procedures are often complicated. Modern technology such as computers
should be able to simplify processes and make things more transparent
and timely for decision making. This should also promote greater access
to information to prevent media-people from speculating.

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42 PM 230: Financial Management in Government

Consolidating the centers of accountability

The problem of being answerable to too many people or centers is a very
real one to a modern-day public servant. He/She has to comply with his/
her accountability requirements while managing the routine, day-to-day
operations of his/her office, pursuing its programs and projects.

The profusion of accountability centers and their respective requirements

is adversely affecting the efficiency and effectiveness of public service in
terms of management attention to operations, the quality and timeliness
of response to public needs, and the appropriation of an office’s resources
in terms of manpower, times, and financial and material resources
(Sto.Tomas, 1995).

Delineating direct accountability

It is quite ironic that, despite the proliferation of accountability measures
within and outside of government, situations often arise wherein the ac-
countability of an office for a specific concern or responsibility is vague.
This is due in large part to the proliferation of so-called inter-agency com-
mittees, task forces, councils and ad hoc bodies wherein at least two or
more agencies jointly undertake a program or project. While it has its
advantages, the inter-agency approach spreads responsibility across sev-
eral agencies. Thus, which agency is accountable for what responsibility
is often mired in the bureaucratic maze” (Sto. Tomas, 1995:195).

In closing, it is important to say that the moral and ethical systems of

government have come under strong pressure. As a result, “the tempta-
tions have won and the conscience has lost” (Tadin, 1995:6). There is
therefore a need to reintroduce, revive, reactivate, and strengthen exten-
sive normative education. This means strengthening “moral education
and religio-cultural bonds so that people will take up their responsibility
with some moral awareness” at all levels from childhood to post gradua-
tion, “so that we produce a moral man before we produce an economic
man” (Tadin, 1995:7).

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SAQ 2-1
Differentiate accountability from responsibility.

ASAQ 2-1
Responsibility is broader in scope than the concept of accountabil-
ity. Sections 101 and 102 of the Audit Code specifically states
that:

Section 101: The officer in possession or custody of govern-

ment funds or property by reason of his duties shall be ac-
countable therefor and for the safekeeping thereof. He is the
real accountable officer within the contemplation of law. As
such, he shall be properly bonded in accordance with law.

Section 102: The head of any government agency at all lev-

els, whether national, corporate, or local, is made immedi-
ately and primarily responsible for all government funds and
property pertaining to his agency. Secondary responsibility,
on the other hand, is made to rest on persons entrusted with
the actual possession or custody of the funds or property.
The imposition of primary and secondary responsibilities to
the agency head and his accountable officers, respectively, is
without prejudice to their liability to the government.

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44 PM 230: Financial Management in Government

Activity 2-4
The following situation is taken from Sto. Tomas (1995:195).

A very destructive typhoon hit one of the Philippines

southern provinces. A government warehouse was
unroofed, exposing thousands of sacks of rice to the
elements. Meantime, a severe food shortage hit the
calamity area: people were going hungry and they
were demanding that they be given the rice, which was
already beginning to rot. The warehouse manager
refused on grounds that the stocks were his responsibil-
ity and that he had to account for them in the pre-
scribed manner, notwithstanding the fact that people
had no food. By the time orders from Manila came to
distribute the rice, much of it had become unfit for
human consumption.

Analyze the responsibility and accountability of the warehouse

manager.

Comment on the Activity 2-4

The above situation is an extreme case but it is a graphic illustra-
tion of the consequences of the warehouse manager’s otherwise
well-intentioned accountability mechanisms and how it can kill
initiative and responsiveness on the part of the wary government
official (Sto. Tomas).

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References

Boncodin, ET. (1999). Public finance and governance. In From government

to governance reflections on the 1999 World conference on governance,
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Cariño, LV. (1984). Administrative accountability: A review of the evolution,
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In UP-COA Professorial Chair Lecture Series, COA Research and
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Iqbal, A. (1995). Administrative and Financial Accountability: The Experience
of SAARC Countries. In Administrative and financial accountability: The
ASEAN-SAARC experience. Edited by SH Salleh and A Kar. Asian and
Pacific Development Centre.
Kernaghan, K and FW Langford. (1990). The responsibility of public ser-
vants. Toronto: The Institute of Public Administration of Canada.
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Tan SIT. (1995). Report of working group I. Chapter 1 in Administrative
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Tantuico, FS Jr. (1994). Performance and accountability: Central pillars of
democracy.

UP Open University