Forms of Corruption
While there are many forms of corruption, only a few of them are brought out clearly in the assigned video. This video is about corruption in Bell, a town in Gilchrist County Florida (CBS, 2010). The main form of corruption, as evidenced in the video, is embezzlement. For the purpose of clarity, embezzlement “occurs when a person takes money or property that has been entrusted to his or her care” (Jancsics, 2019, p. 537). In the video, Robert Rizzo, the former manager, and eight other city officials were charged of misappropriating more than $ 500 million dollars.
The second form of corruption evidenced in the video is graft. This is a form of political corruption which is described as “unscrupulous use of a politician’s authority for personal gain” (Jancsics, 2019, p. 537). Political graft can occur when money meant for public projects is diverted for personal interests. In the video, this form of corruption was perpetrated through high taxes, but instead of the money being utilized for finance investments in human capital, it was used for personal gains (CBS, 2010). For instance, 4 out of 5 council members pocket up to $ 100 thousand per year for part time work while in other cities the average is only about $ 5k per year (CBS, 2010). Similarly, city manager’s annual salary is about $ 787, 637 – higher than what President Obama was earning at the time.
The Town’s Situation
The overriding point from the reading’s module revolves around the fact that corruption erodes the trust people have in the public sector. In the end, the residents are forced to contend with poor quality of services and economy. From the video, Bell has a population of about thirty-six thousand residents with a medium household income slated at $ 38,502 per year (CBS, 2010). The residents are forced to pay high taxes but most of the money ends up in the pockets a few people through secret loans.
The Cause of Corruption
The main cause of the corruption in Bell, as evidenced in the video, is poor governance which leads to lack of financial accountability. This made it easier for city officials to engage in dubious means such as illegal salary raises, secret loans and high taxes (CBS, 2010). On the issue of illegal salary raises, it is clear from the video, that public officials earn huge salaries and other benefits. For instance, Robert Rizzo, the former manager, was earning a total of $ 3.2 million per year after all the benefits were included in the figure (CBS, 2010). Other city officials were earning $ 100 thousand per year for part time work compared to an average of $ 5k per year in other cities.
Prevention of Corruption
The two forms of corruption could have been prevented if the city had chosen to separate accounting responsibilities as well as conducting regular financial audit. For instance, regular external audits which focus on the financial statements could have helped deter city officials from engaging and perpetrating corruption. Similarly, external audit is the best way of preventing graft because it ensures the city has followed relevant laws and regulations. Additionally, separating accounting responsibility ensures different people are responsible for writing, signing and reconciling outgoing checks. It is important to note the risk for embezzlement increases when only one individual handles all financial records. For instance, the city could ensure that those involved with cash transactions are not the same handling bank reconciliations.
References
CBS. (2010). Corrupt city council caught. [Video].YouTube. Web.
Jancsics, D. (2019). Corruption as resource transfer: An interdisciplinary synthesis. Public Administration Review, 79(4), 523-537. Web.