9.1 Public Service Ethics Principles & the AGA Code of Ethics

5.1 Public Service Ethics Principles & the AGA Code of Ethics

Foundations of Public Sector Ethics: Public Office as a Public Trust

In democratic governance, public officials do not exercise personal or inherent power; rather, they hold sovereign authority on loan from the citizenry. This foundational principle—that public office is a public trust—is the cornerstone of public sector ethics and government financial administration. Public funds do not belong to the agency, the legislative majority, or the executive leadership; they represent compulsory extractions of private wealth collected under the coercive power of taxation, entrusted to public managers exclusively to advance the common welfare.

Because the public cannot continuously oversee daily governmental transactions, citizens rely on government financial managers to act as fiduciaries. A fiduciary relationship is rooted in unequal power, specialized technical knowledge, and total trust. In the private sector, corporate officers owe fiduciary duties primarily to their shareholders. In the public sector, however, the fiduciary duty owed by the government financial manager is far broader and more demanding: it is owed to the entire public body, including taxpayers, program beneficiaries, future generations, and the institutional integrity of constitutional government itself.

Stewardship of Public Resources

Fiduciary stewardship in public financial management requires practitioners to actively safeguard public assets against loss, depletion, and misdirection. True stewardship encompasses four interrelated dimensions:

1. Asset Protection and Internal Control: Establishing and maintaining robust internal control environments that prevent waste, fraud, abuse, and fiscal mismanagement.
2. Fiscal Discipline and Operational Efficiency: Optimizing the utilization of public revenues to maximize delivered public value while minimizing administrative overhead and unnecessary expenditure.
3. Intergenerational Equity: Ensuring that current operational commitments and public borrowings do not unfairly shift current operational burdens onto future taxpayers who have no voice in present fiscal decisions.
4. Public Accountability and Transparency: Providing full, truthful, and comprehensible financial reports so that citizens, legislative overseers, and independent auditors can evaluate how faithfully public resources were gathered, allocated, and disbursed.

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The Association of Government Accountants (AGA) Code of Ethics

To institutionalize these fiduciary obligations and maintain public confidence in government financial administration, professional bodies establish formal ethical frameworks. The Association of Government Accountants (AGA)—the premier professional organization dedicated to advancing government accountability—promulgates the AGA Code of Ethics.

Scope and Mandatory Applicability

A critical concept for the CGFM examination is the mandatory applicability of the AGA Code of Ethics. Unlike general aspirational guidelines, the AGA Code constitutes a binding professional contract that applies directly to:

• All Active AGA Members: Regardless of membership category (government, private sector, academic, or student).
• All Certified Government Financial Manager (CGFM) Credential Holders: Compliance is a mandatory prerequisite for maintaining active certification. Every CGFM must formally attest to compliance with the Code annually upon renewal.
• All CGFM Candidates: AGA requires individuals in the CGFM examination process to agree to and adhere to the Code as a condition of candidacy.

Compliance with the Code is non-negotiable. An individual cannot claim that private sector employment, elected office, subordinate administrative status, or conflicting managerial directives exempts them from adhering to its mandates. Where an employer's directives conflict with the AGA Code of Ethics, the CGFM practitioner is professionally obligated to uphold the Code, escalate the issue through proper internal and external channels, and refrain from participating in improper activities.

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The Four Principles of the Current AGA Code of Ethics

The current AGA Code states four principles. Members and covered CGFM professionals must: (1) serve and support the public interest; (2) maintain the highest standards of professionalism and integrity; (3) remain objective in carrying out their professional responsibilities; and (4) exercise care to maintain and protect confidentiality. The detailed rules under those principles explain duties such as integrity, competence, due care, and professional behavior; those duties are not additional numbered principles.

Supporting Duty Under Principle 2: Integrity and Credibility

Integrity is the bedrock upon which public trust resides. It requires uncompromising honesty, truthfulness, candor, and moral uprightness in all professional matters. A government financial manager practicing integrity:

• Does not knowingly misstate, shade, obscure, or misrepresent facts, estimates, financial statements, or audit findings.
• Rejects any accommodation of convenience, political pressure, or personal expedience that undermines truth.
• Promptly acknowledges and rectifies unintended errors rather than concealing or downplaying them.
• Maintains the courage to communicate unpleasant fiscal realities to superiors, legislative bodies, and the public.

Principle 3: Objectivity

Objectivity requires intellectual honesty, impartiality, and total freedom from conflicts of interest, bias, or improper outside influence. Government financial managers must arrive at conclusions, formulate budgets, and conduct audits based solely on verifiable evidence, established facts, and rigorous technical standards. Objectivity dictates that:

• Decisions must never be compromised by personal friendships, political affiliations, ideological agendas, or commercial relationships.
• Subordinate financial staff must not allow their professional judgment to be subordinated to the policy whims or partisan desires of appointed or elected officials.
• Practitioners must identify, disclose, and resolve any real, potential, or perceived threats to their independence and neutrality.

Supporting Duties Under Principle 2: Competence and Due Care

Under the principle of Professional Competence and Due Care, practitioners undertake only those assignments they are qualified to perform and execute all responsibilities with diligence, thoroughness, and technical rigor. This principle contains two complementary requirements:

• Professional Competence: The acquisition and continuous maintenance of the specialized technical knowledge, operational skills, and regulatory understanding required for public financial administration. To maintain CGFM certification, holders must complete a minimum of 80 hours of approved Continuing Professional Education (CPE) every two years, including a mandatory minimum of 4 hours in professional ethics.
• Due Care: The consistent exercise of professional diligence, thoroughness, critical scrutiny, and professional skepticism. Due care mandates planning work carefully, supervising subordinate staff adequately, adhering strictly to authoritative accounting and auditing standards (such as GAAP, GASB, FASAB, and GAGAS/Yellow Book), and thoroughly corroborating financial documentation.

Principle 4: Confidentiality

Government financial professionals routinely access sensitive, proprietary, and legally protected data, including personal tax records, vendor trade secrets, social service beneficiary details, and preliminary investigative files. The principle of Confidentiality requires practitioners to:

• Safeguard all non-public, classified, or legally protected information acquired during the course of professional service.
• Never disclose confidential information to external third parties without proper legal authorization, statutory mandate, or formal judicial process.
• Never use non-public governmental information for personal enrichment, commercial gain, or the private advantage of friends, family, or business associates (such as insider trading or leaking bidding data).
• Balance confidentiality mandates with affirmative legal disclosure duties (such as responding to lawful legislative subpoenas, formal Freedom of Information Act requests, or statutory whistleblower reporting requirements).

Supporting Duty Under Principle 2: Professional Behavior

Professional Behavior requires practitioners to conduct themselves in a manner that preserves and enhances the dignity, prestige, and credibility of the financial management profession and the AGA. Practitioners must:

• Comply scrupulously with all applicable federal, state, and local statutes, administrative regulations, and authoritative standards.
• Refrain from any conduct that discredits the profession, the CGFM designation, or the AGA, including dishonest off-duty conduct, criminal convictions, or civil fraud judgments.
• Treat colleagues, subordinates, contractors, and members of the public with fairness, professionalism, dignity, and respect.
• Refrain from making false, misleading, or deceptive public claims regarding their qualifications, experience, or credential status.

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Comparative Analysis: The Four Principles and Their Supporting Duties

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