Office of the General Accountant: Corruption antidote
FULL DISCLOSURE - Fidel O. Abalos (The Freeman) - September 16, 2013 - 12:00am

Ask management consultants you may know about how old business owners view internal controls then and now, and, in chorus, they will tell you, there is a 360-degree turnaround.  Truth to tell, old business owners then were just so concerned about how much sales were generated, even if remittances were short. Worst, they simply look at the passbooks to see if balances are growing without even entertaining some thoughts that probably some amounts were illegally taken out. Moreover, they take a look at manufacturing activities as a very simple process of delivering the decide volume and quality without even trying to know whether the workers’ (manufacturing department) payroll was padded.  Sadly, they don’t even care if there are raw materials that are lost through wastages or pilferages. 

Today, however, their mindsets have significantly changed.  Reasons run from having children (the apparent successors) who are well-schooled and are so concern about having better internal control system to the Bureau of Internal Revenue (BIR) being so strict nowadays that they don’t want to commit mistakes that will result to huge tax liabilities.  Consequently, they hire consultants to set up their companies’ most appropriate accounting systems and hire accountants to religiously implement them. 

Thus, today’s business owners, in safeguarding their companies’ assets, are making sure that the internal control system that they’ve established are adequate.  With this in mind, their companies’ organizational structures are so designed that each person does not handle incompatible functions.  These are established, in a way, that the internal control’s cardinal rule of segregation of duties is well observed and checks and balances are assured.  On top of these, most companies made it a policy that their personnel are rotated periodically to ensure that the work of a person shall be reviewed by another and accountabilities are established upon turnover.  To ensure success, they made sure that they have very strong accounting departments that shall see to it that the established internal control systems are operating as planned.

The same should have been true (or even more) in public service.  This is so, because what these public servants deal with are publicly-owned funds or our money.  But with a congress and, worst, local government units ran like family-owned corporations by our government leaders (who have made sure their family members and favored friends or employees are in key positions, either by election or appointment), the internal control aspect of governance is set aside. 

Truth be told, while private companies are now strengthening their accounting or comptrollership concerns, the government (especially, local government units or LGUs) is taking this department for granted.  As we all know, LGU accountants are appointed by the LGUs’ Chief Executives (Mayors or Governors).  In return, they (accountants) will only report to them (the mayors and governors) and to no one else.  Naturally, no matter how straightforward they maybe, the fact remains that they are still beholden to their mayors or governors.  Consequently, these accountants are used by their mayors or governors to deliberately conceal what they (LGU execs) steal by manipulating the LGUs’ accounting records.  With no one to run to for protection, they succumb to pressures and are forced to follow.  Therefore, as this significant aspect is set aside, corruption flourished.

Obviously, a change is necessary.  Owing to the fact that organizationally and functionally, the LGU executives can easily manhandle their accountants, this must be given top priority. First and foremost, an Office of the General Accountant (OGA, a cabinet level position) must be created.  This office shall take care of, among others, concerns on internal control and transparency.  Thus, it shall carry such tasks as designing and implementing internal control procedures, as well as, in establishing fraud deterrence and corruption prevention measures.  Having such functions, the OGA shall deputize all LGU accountants to implement the proper internal control systems.  Clearly, therefore, functionally, these LGU accountants shall report directly to the OGA.  With that, they shall be shielded from the clutches of these corrupt LGU executives.  To further enhance their usefulness, only the General Accountant shall be given that exclusive prerogative to appoint and designate accountants in specific LGUs. 

With this in place, we, the citizenry, can be assured of transparency and will be in a better position to fight corruption effectively.


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