Week 15: Ethics, Wrap Up, Student Presentations Ethics -- public sector Ethical issues in public budgeting and finance Revisit course goals Begin student presentations

Ethics: Definition Systematic thinking about morals and conduct Making judgments about right and wrong Choosing between legitimate but competing values In public sector: –from thought to action and consequences –discretion by un-elected public managers

Ethical Philosophy right v right (value conflicts) –individual v community –short-term v long-term –truth v loyalty –justice v mercy theories of moral philosophy –utilitarian – ends-based –rule-based (Kant) –care-based

Framework for Public Sector Ethics Competing roles and loyalties: –personal –professional –organizational –public interest ASPA Code of Ethics –reflects new public management –not much help with role conflicts

Changing Public Sector Ethics Traditional view of ethics (roots in business world): –“low road” of compliance -- stay out of trouble –neutrality/efficiency/rules –prevention of fraud, waste, abuse –means-based approach Contemporary view of ethics –“high road” of moral reasoning, integrity, justice, leadership –ethics of value, not of neutrality –integrity/moral reasoning/leadership/justice –accomplishment of public good –Results-oriented government ==> ends-based ethics –Responsible use of increased administrative discretion

Ethics Applied to Public Budgeting Old budgetary ethics –limited discretion –line item accountability –focus on allowable uses of funds New budgetary ethics –discretion on use of funds to meet goals –program control, not line-item –accountability for accomplishments

Ethical Issues in Public Budgeting Budgeting as political –who benefits/who pays from public budgeting decisions –political leadership for the public interest Budgeting as technical –budget experts can withhold or frame information –gimmicks and fixes Budget process –playing the budget game –use (abuse) of data in budget justifications –advocacy for program v loyalty to executive budget

Ethical Issues in Public Finance Estimating revenues –Choosing optimistic v pessimistic scenarios –Withholding information on available reserves Impact of finance policies –Short-term v long-term impacts –Political expediency to gain passage (features or gimmicks that aren’t fiscally sound) –User taxes to replace general purpose revenues

Ethical Issues in Budget Implementation Budget analysis –tactics to delay implementation of programs Budget management –using funds for different purposes than budgeted –circumvent budget controls to accomplish desired outcomes Accountability –setting goals and objectives—who is involved? –accountability for results – how much discretion? –ethical issues in performance reporting

Discussion Questions Does unethical behavior in public servants occur because they are inherently unethical or because unethical behavior is rewarded? How can “high road” focus on accomplishments be a guide when there is no consensus on desired public outcomes? Is “public trust deficit” best addressed by low-road ethical focus, rather than promoting administrative discretion?

Course Goals Revisited Understand political context of budgeting at federal, state, local levels Develop working knowledge of California budget process, concepts, terminology Learn some basic skills in budget development, analysis Understand role of budgets within life of an agency Understand budgets as tools of accountability Develop some basic skills in selection and use of performance measures in context of budgeting Improve applied (memo) writing skills