For Prof. Nicholas Only

Administrative Ethics

In the past few years the world as a whole has experienced a time of economic upheaval the likes of which and the severity at such a magnitude that has not been witnessed in the world since the 1920’s. It is at such times that such a body as the treasury should act in a manner that is for the greater good of the persons whom it is mandated to protect. In the case of the United States Treasury this is the public of the United States of America. It is important to note that the treasury is tasked with the minting of United States currency through its subsidiary known usually as the United States Mint; it also manages the country’s consolidated fund which is the government’s main account through which all government projects and agencies are funded. This account is crucial in the stability of the country’s economy and the government’s provision of such services that may be expected by the populous in return for their payment of taxes. This body is also the country’s tax collector through another subsidiary which is the Internal Revenue Service. Therefore it’s important to note that the monies collected by the Internal Revenue service are the main funding for the Governments consolidated fund in conjunction with bonds loans and other debt instruments that also fall under the purview of this governmental agency.

This agency deals with monies that belong to the public it is in this note that the country has a fiduciary relationship with the citizenry and hence has a fiduciary duty to the people of the United States therefore this governmental agency should not only act in an ethical manner and in relation to the values and interest of the nation but this should be evident in all the actions it undertakes on behalf of the people of the United States. It is then true that with regards to the sensitive docket occupied by this body as mentioned above and its dealings with money on behalf of the people the heads of this organization and the decision makers in this body have the unenviable task of acting as the conscience of the whole country in their decision making and execution of their mandate in terms of their administrative responsibility and ethical implications of their decision making to the stake holders the organization in itself and the public in general. The following is an analysis of certain events that have left a mark with regard to the implications above.

In the year 2008 the country experienced a term of financial upheaval known as the economic meltdown that was characterized by a large drop in share prices of securities tied to the real estate market and the consequent foreclosures and evictions that were witnessed in the ensuing crisis where interest rates on mortgages rose to a point that very few could afford to keep up with the payments. This melt down as it was known led to the government bailing out large financial institutions and manufacturers to avert a total economic collapse, while some debate this as unethical and some not we are not going to discuss this due to the fact that it happened more than 2 years ago, which would have been catastrophic not only to the United States but to the world as a whole. This served to save these companies from bankruptcy and save some jobs for the American taxpayer. As the world slowly rose from this recession in 2013 (two years ago) Information came from the United States Treasury that it had authorized the payment of bonuses to certain individuals within these corporations. In this case the issue wasn’t the authorization of the payment of the bonuses as this is deeply embedded in corporate culture but it was the amounts of money that had been authorized as payment to the members of the senior management of these companies that were still surviving under the auspices of taxpayers’ money. Some records have it that AIG that was bailed out in 2008 received over 165million in extra pay as bonuses for its executives whereby the average American household contributing to tax had an average income of 50000 dollars only (Elizabeth M, 2013). This led to an outcry on how these companies can award themselves such bonuses while surviving on taxpayer cash.

Another event of this nature is the curious case of the Internal Revenue targeting controversy whereby the internal revenue service was accused of targeting certain political groups as this was per the services own admission this was caused by extra scrutiny afforded to the conservative political parties and other movements such as the occupy movements. This was pursuant to the Internal Revenue Code which exempts some organizations especially those of a nonprofit kind (Internal Revenue Code).

Leadership Influences

In the case of the bailout bonus it is important to note that it was the administrative responsibility of the Treasury which had oversight with regards to the use of the public funds as they were in use in the bailed out corporations. It is bare to see that the amounts given to these executives was quite vulgar in light of the fact that millions of hardworking citizens are jobless due to the crisis and had actually contributed as tax payers to the monies that saved these corporations. It is apparent that this decision may have not been the best decision with regard of the greater good of the American citizen in this case this was not an ethical decision as it was made to the benefit of a few individuals and with disregard to the prevailing situation that the country was undergoing this has the effect of making the citizenry resent the Treasury for not having the good of the citizens in mind. The lack of confidence in the revenue service may lead to a reduction in the taxes collected and general lethargy as with regards to tax payment.

In the second instance that concerns the targeting of certain groups it gives the impression of unfair scrutiny and surveillance of certain individuals and groups in essence a proper tax system should advocate the equal enforcement of such laws as those that govern tax remittance and collection in a fair manner this may lead to a perception of unfairness and the use of the tax system as a political tool that may erode the taxpayers confidence in the body charged with such collection.(Alex A, 2013)

Legal Decisions

The Treasury department is headed by the Secretary of Treasury, his Deputy Treasurer of the United States chief of staff of the Treasurer after this it is divided into the various components each with its head and duties some of these include domestic finance economic policy general counsel, international affairs, legislative affairs, management, public affairs, tax policy and finally terrorism an financial intelligence in this management structure the rest of the heads of departments enjoy equal status with regards to other heads in a horizontal manner.

In this case some of these leaders are political appointees in the sense that these leaders have been appointed by politicians or by the permission of political establishments this includes leaders such as the Secretary of the Treasury whose appointment is by the President with the permission of Congress. Therefore, it is bare to see that the political leaders of a country have a bearing on the success or the failure of this agency just the same as the internal agency leaders.

Strategies for Consideration to Administrative Processes

In this matter the leaders should engage with the public in a manner that is conducive to the creation of a good working relationship with the public and foster understanding with regards to the decisions taken by the agency. Secondly the political leaders involved in the appointment of such officials should do so in a sober manner devoid of any political considerations but rather consider the candidates credentials and the value he or she would bring to the agency. Finally the adherence of the staff and leadership of such an agency to the law is of vital importance for an agency that can ill afford scandals as these may damage its reputation leading to loss in confidence in the institution leading to a fall the revenue collected as it relies on the confidence of the citizenry.

Recommendations for Improvements to Administrative Processes

This agency is tasked with the collection of taxes from citizens of the United States who and the making or minting of the United States currency but of its many duties it is the collection of taxes that has the most challenges.

In this case the volatility of markets in the entire world and internally in the United States makes the management of the country’s debt instruments very hard this is not helped by political stalemates causing such major issues as the federal shutdown (Dealing with Tax Payment Difficulties and Engaging with Revenue). Secondly the issue of tax evasion is a problem not only in the entire world but also in the United States this has to be battled by the introduction tough international laws as well as municipal legislation in the country. Thirdly the internal revenue service’s loses millions of dollars to smugglers be it the smuggling of cigarettes and other goods across the borders. This may be curbed by the increase in funding to the border protection and customs services in order to increase manpower and tighten security in the various frontiers (tax payment difficulties).

References

Altman Alex, The Real Internal Revenue Service Scandal, www.swmpland.time.com, retrieved 19th Feb 2015.

Dealing with Tax Payment Difficulties and Engaging with Revenue .pdf www.revenue.ie retrieved 19th Feb. 2015.

Elizabeth MacDonald (2013), American Inconscionable Group, Fox Business.

Internal Revenue Code26 U.S.C, Section 501(c) (4).

Tax Payment Difficulties .pdf www.revenue.ie retrieved 19th Feb. 2015