Approaches to Maximize Accountability,

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Approaches to Maximize Accountability, Minimize
Risks, Improve Transparency, and Reduce Fraud in
the Government
Manuel Díaz Saldaña Comptroller of Puerto
Rico May 2, 2005
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• Every entity has to develop different methods or
  strategies to maximize accountability, minimize
  risks, improve transparency and reduce fraud.
  This is even more important when government
  entities are involved. The administrators or
  managers in public service assume a fiduciary
  responsibility in administering the governments
  resources.
• This fiduciary responsibility entails that the
  administrator of the goods will hand them over at
  the end of his tenure with an added value,
  improved or augmented, in quality and in quantity.

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• Programs developed in the Comptrollers Office to
  maximize accountability, minimize risks, improve
  transparency and reduce fraud in the Government.

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Mission, Vision and Values

• Mission
• To oversee the transactions of public funds and
  property
• To promote the effective and efficient use of
  government resources
• Vision
• To be a world-class model for public office
• To serve Puerto Rico as a true agent of change,
  integrating the efforts of the public and private
  sectors

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Cont. Mission, Vision and Values

• Values

Commitment We are dedicated to our work .
Integrity We work in a responsible manner.
Sensibility We respect the dignity of all human beings.
Justice We watch for the strictest compliance with the law.
Excellence We are constantly improving ourselves.
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COMMONWEALTH OF PUERTO RICO CONSTITUTIONArticle
III, Section 221952

• The Controller shall audit all the revenues,
  accounts and expenditures of the Commonwealth, of
  its agencies and instrumentalities and of its
  municipalities, in order to determine whether
  they have been made in accordance with law. He
  shall render annual reports and any special
  reports that may be required of him by the
  Legislative Assembly or by the Governor.

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Total Quality Management

• Based on principles of continuous revision of
  existing processes and constant measurement of
  the results
• We have identified 230 processes
• We have revised 151 (65 )
• 715 recommendations have been received and 80
  of these recommendations have been complied with

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Cont. Total Quality Management

• First Strategic Plan (1997)
• Third Strategic Plan 2004 to 2007 - composed of
  five focus areas
• Overseeing
• Prevention
• Human Capital
• Technology
• Customer Services

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• If you have failed to plan, you are planning to
  fail.

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Strategies

• Directed towards
• Each of the focus areas and
• Promoting the objectives or goals of maximizing
  accountability, minimizing risks, improving
  transparency in transactions and detecting and
  preventing or reducing fraud in the Government
• Two dimensions
• Internal

• External

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Internal Strategies

• Anticorruption Policy (2000)
• Ethics Committee - receives, investigates and
  decides the merits of ethics-related grievances
  or complaints
• Hot-line
• Internal Audit Advisory Committee (2000)

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Cont. Internal Strategies

• ISO 9000 certification
• Comprehensive Annual Financial Report (beginning
  on 1997-98)

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Cont. Internal Strategies

• Promoting the use of technology
• Virtual Office
• TeamMate Program in the audit function
• Payroll payments by electronic means, using
  direct deposits

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• That which isnt measured cant be improved.
• Anonymous

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Cont. Internal Strategies

• Project Management Official
• 116 active projects

The vision must be followed by the venture. It
is not enough to stare up the steps we must
step up the stairs. Vance Havner
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Cont. Internal Strategies

• Human Capital
• A strict recruitment process
• Continous education requirements
• Reduction of employee turnover
• Assessment of working environment

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External Strategies

• Identified six strategies geared to improve
  public administration and fight corruption

1. Rigorous and constant oversight
2. Promoting education and training of public
   employees
3. Promoting an excellent administrative and
   financial system with emphasis on effective
   internal controls
4. Fair laws
5. Dissuasive punishments
6. Strategic alliances between related agencies

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• Leadership and learning are indispensable to
  each other.
• John F. Kennedy

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Cont. External Strategies

• Promoting education and training of public
  employees
• Training of elected public officials on good
  management practices (Law Num. 222 of
  August 6, 1999)
• Orientations and training on good management
  practices
• Expositions in large commercial establishments

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Cont. External Strategies

• Massive disclosure of the role of the
  Comptrollers Office

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Cont. External Strategies

• Education must stimulate the development of the
  capacity to create in human beings and their
  devotion to spiritual values. Education must
  also forge citizens with moral integrity and a
  will of service to the community. Education must
  be inspired by a demanding sense of excellence.
• Luis A. Ferré, Former Governor of Puerto Rico

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Cont. External Strategies

• There is nothing permanent except change.
• Heraclitus

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Cont. External Strategies

• Oversight function
• Traditional oversight
• New oversight methodology (periodic evaluations)
• Property Registers
• Internal Audit Offices
• Government University
• Legislators Offices
• Municipalities

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COMPARISON OF MUNICIPALITIES (78) COMPLIANCE WITH
ESTABLISHED CRITERIAS FISCAL YEARS 1997-98 AND
2003-04
(58)
(26)
Source Special Reports M-99-4A and M-05-4G
dated May 25, 1999 and April 14, 2005.
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MUNICIPALITIES COMPLIANCEPREPARATION OF AUDITED
FINANCIAL STATEMENTS WITHIN SIX MONTHS AFTER THE
END OF FISCAL YEAR
Due date extended to Jan. 2005 to comply with
GASB 34
Source Special Reports M-99-4A y M-05-4G dated
May 25, 1999 and April 14, 2005.
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Cont. External Strategies - oversight

• Annual evaluation of financial actions that
  adversely affect, from an economic point of view,
  government administration
• Collecting information regarding civil suits
  against the government for unlawfully removing
  government employees Our reports reflect that
  the loss of economic resources amounted to
  65,066,295 in a ten year period ending on
  December 2004.

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Cont. External Strategies

• Actively participated in the approval of laws
• In the year 2003-2004 and until March 2005, we
  have received and submitted comments on 105
  drafts of legislative bills

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Cont. External Strategies - laws

• Cont. Actively participate in the approval of
  laws
• Continuous education and training of public
  servants
• Contractual and ethics requirements for those who
  do business with the government
• Controls and disclosure of governmental
  transactions
• Oversight and protection of informants
  (whistle-blowers)

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Cont. External Strategies

• Recommend and promote that all government
  agencies use technology
• Filing copies of all government contracts and
  other documents by electronic means
• Use of the Internet to disseminate information of
  interest
• Complaint register

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• Leaders challenge the status quo. Continuous
  challenge produces continuous improvement.
• Paul B. Thornton

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• WE COUNT ON YOUR COOPERATION TO IMPROVE THE
  OVERSIGHT FUNCTION AND ADMINISTRATION OF PUBLIC
  FUNDS AND PROPERTY