International Peer Reviewed Journal

Vol. 31 · January 2018 Print ISSN 2012-3981

DOI: https://doi.org/10.7719/jpair.v31i1.568 Online ISSN 2244-0445

Best Practices on Financial Management:

A Collaborative Academic Interventions
in Cotabato City, Southern Philippines
NORODIN D. SALAM
https://orcid.org/0000-0002-3264-4906
Cotabato City State Polytechnic College
Cotabato City, Philippines
norissalam@yahoo.com.ph

MARWISA SEDIK-SALAM
mhar_sedik@yahoo.com.ph
Cotabato City State Polytechnic College
Cotabato City, Philippines

Originality: 96% • Grammar Check: 91 • Plagiarism: 4

This work is licensed under a Creative Commons

Attribution-NonCommercial 4.0 International License.

ABSTRACT

Finance has been described as a great challenge for every organization and
considered the lifeblood of every institution which is used to finance its programs
and services. The study determined the best financial management practices and
the implementation in the local government unit of Cotabato City, Mindanao,
Southern Philippines. It also identified the gaps in financial management in its
covered local community. Interview guides and document analysis were used
in the study. Using descriptive method, it was found out that the financial
management of the local community was properly managed. Hence, there was a
good financial management in terms of finances of the communities in Cotabato
City as a basis of receiving the award of the seal of good housekeeping. It has

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been highly recommended to engage more trainings on the same field with the
involvement of the second liner young officials. This study provides empirical
data to the agency administrators managing the community. There will also be
an identification of strategies to be adapted in the programs for implementation.

Keywords – Financial management, strategies, descriptive design,

interventions, Philippines

INTRODUCTION

One of the greatest challenges of the world today is on difficult recovery of

economic deficits due to the ever-increasing desire for wealth by some capitalist
and leaders in the modern society (Trecker, 1977). As a result, the continuous
burden of the third world countries develops their own system of economy. In the
global world, there are various established institutions that assist the government
for their financial performance. The recently conducted state of the city address
boosted the increasing revenue collection of Cotabato City, Philippines. Out of
108 component cities and municipalities, Cotabato City emerged as the 4th most
competitive city to be included in the top 10 and known as the “Center Seat of
the Economy of Mindanao.”
Cotabato City in Southern Philippines has been the subject of misconception,
biases and prejudices being one experiencing violence in many forms. However,
it may not be known to most people in the country, that the city has been
declared as the 4th most competitive city in the entire Philippines. Further, it has
gained confidence from the investors such that six more shopping malls have
been recently established. The city government has been a recipient of the Good
Housekeeping Award for three consecutive years already. It has also received other
awards such as the Child-Friendly City award because the city’s environment is
relatively safe for children.
The study assessed and identified the gaps in the financial management in
the local community especially those responsible for the financial transactions
with the academic programs through the assistance of On-the-Job training
students. There will also be an identification of strategies adapted in the programs
for implementation and surface the problems encountered with corresponding
recommendations for the improvement of the financial reporting.
The results of financial management practices are beneficial to the residents
of Cotabato City as it could mean for a regular efficient delivery of sufficient

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services, the visitors of the city could safely spend their vacation and attend
seminars. The city government of Cotabato may benefit from their own financial
management practices as they are assured of sustainability in public office which
could also give pride for being the credible and accountable public officials;
students may be provided with good models of financial management which they
could experience and easily verify. Moreover, the best practices of the Cotabato
City government could be an appropriate and realistic springboard for classroom
discussion; and the general bank of knowledge for a good model worth sharing to
others for them to apply in their own places or local government units.

OBJECTIVE OF THE STUDY

The study assessed the financial management of selected local communities

in Cotabato City to determine its direction and effects to the beneficiaries.

FRAMEWORK

This study is anchored on the framework of financial management practices

conceived by the United Nations Development Program (UNDP) (2000)
which has been affirmed by many of its partner governments and international
organizations.

Figure 1. Schematic Diagram of the Conceptual Framework

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The 37 communities of Cotabato City are governed by skilled general

accounting procedures of the City Accounting Office responsible in preparing
financial reports. The financial management implementers in the local community
had used a variety of strategies in delivering to the local communities, these
include the issuance of official receipts, bookkeeping, planning and strategies.
Through this, the program on strengthening of the financial reporting is
important alongside with the result of the assessment of this study. It includes
those good practices and makes transparent how well financial management are
transformed into services, outputs, and outcomes. As a result, good financial
housekeeping was established with good feedback from the clienteles.

LITERATURE

Financial Management Services

The financial management services implemented by the City Government
of Cotabato based on the record from the Government Services Office include
centralized payment, collection and reporting services, oversight of a daily cash
flow, disbursement, issuance of tax refunds and other payments, collection
of annual payments to the government through financial institutions, and
collection of delinquent debts owed to the government.
Furthermore, finance among the 37 local communities in Cotabato City has
been its lifeblood which is used to fund its programs and services. It is governed
by general accounting procedures of the City Accounting Office, provided the
skills related to finances. The program implementers in the community had
used a variety of strategies in delivering the programs to the local communities,
this includes the issuance of receipts, bookkeeping, and planning and strategies.
Sometimes, the local communities have no access to the information of the
developments instead they relied only on what they see. Through this, the
program on strengthening the financial reporting is important alongside with the
result of the assessment of this study.

Challenges Confronting Financial Management

Decades of analyzing and evaluating performance data have helped financial
management understand the tools necessary to maintain solvency. However,
the modern-day financial management still poses specific challenges to the
department heads. These operating obstacles include record keeping, financial
reporting and regulatory compliance. Other financial hurdles relate to borrowing

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arrangements, financial analysis and operational funding (Davidson, 2013).

Caffrey and Armstrong (2013) state that accurate record keeping take the
issue seriously, mainly because it understands it all starts from there. An agency
that thrives and grows can only convince the outside world if it can correctly
record operating transactions. Timely financial reporting can also affect the
agency in the absence of financial data in a timely manner often face a defiant
tone from the community. Weak fund raising activities will provide scarcity in
the organization. Therefore, in the modern economies, raising cash for operating
activities is a subject that lies on top of achieving sound financial status. Lack of
skills in financial analysis can cause the decline of productivity in an agency. By
doing so, financial heads can find ways to prop up agency units. On the other
hand, no regulatory compliance often creates a dilemma that financial heads
must cope with.

Factors Affecting Strong Financial Management

The ability to work together as an effective financial management system
will depend on the circumstances affecting the supply of, and demand for, strong
financial management. Three factors that affect the financial management, these
are: delayed process, slow systems of structural operations and limited time in
data processing; low capability of the key players; and ineffective leadership skills,
(Ingram, 2011).
In addition, there are three factors that affect the demand for financial
management, namely: the lack of strong in internal governance, external
governance and absence of central government financial frameworks.

Strong Financial Management Practices

The financial management system underpins good government. It does so
by ensuring that (internal and external) environment can understand and control
how well an agency plans for and implement good financial management. In
practice, this means that the right information is provided at the right time to
the right people and that the information provided is then considered and used
in understanding and controlling the agency (Wales, 2013).
There are four main practices of financial management: First, the sound
budget management; second, evidence of financial controls; third, the consistent
value management; and strong governance and regular practice of accountability.
Each practice consists of certain inter-related activities and made possible solid
foundation of the other activities.

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Wales also added that budget management means managing the sources
of funding and allocating those resources in line with agency priorities. Thus,
effective budget management happens when priorities are based on a clear
understanding of financial performance expectations. Financial control follows
the rules, processes, and procedures that address risks and assure that financial
resources are being recorded and used in the right way, for the right purpose, and
at the right time.
Another strong financial management practice is value management that
measures, prioritize and allocates financial resources based on the expected value
for service to be derived. Value management is sometimes called “performance
management.” Value management occurs within public entities and throughout
the whole government. It includes those practices referred to as “strategic
financial management” and makes transparent how well financial management
are transformed into services, outputs, and outcomes.
Lastly, governance and accountability of workers’ roles, responsibilities,
delegations, and decision-making structures through which strong financial
management can be introduced, practiced, and overseen and is implied in
financial management. Without structures and processes in an agency to make
decisions at the right level, managing financial performance is more difficult and
prone to risk (Kotloff & Burd, 2012).

METHODOLOGY

Research Design
This study used the descriptive method on the programs of financial
management in the local government unit and its contributions to the
achievement of good financial housekeeping.

Locale of the Study

The locale of the study was within Cotabato City through its different local
communities which are implementing projects from the government.
Cotabato City is called a “City of Rivers” because two rivers crisscross in
the different parts of the city 13 times; the Tamontaka River and Rio Grande
de Mindanao. The name was coined from two Maguindanaoan words, “kuta”
meaning fortress, and “bato” meaning stone. The city has a total land area of 17,
599 hectares and is politically subdivided into 37 local communities.

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Respondents of the Study

There were 30 respondents of the study, 10 administrators in the local
communities, 10 local officials, and 10 beneficiaries. They were chosen using the
purposive sampling technique.

Sampling Technique
The researchers used the non-probability sampling method. The purposive
sampling was applied, there are a total of 30 respondents which were derived
from the three groups such as the administrators, local officials, and beneficiaries.

Research Instruments
The study utilized the review of records technique to get the historical data
of the locality. The documentary review includes the background of the program
and its purposes. The Key Informants Interview was also done to know personally
the mechanics of the implementation and the challenges of the program
implementers in delivering the program. The Focus Group Discussion method
was used to surface the data on effects of the program to the beneficiaries.

Data Gathering Procedures

The researchers personally delivered communication letter to the local
community after getting permission from Cotabato City Mayor with the
attention of the director of the City Vice Mayor. After approval of the letter, the
researchers visited directly to the identified respondents with prepared letter and
questionnaires. The documents for review of records were secured.
The researchers upon securing permission from local government authority
scheduled the interview and prepared the materials needed such as tape recorder,
ballpen, and notebooks. The researchers also conducted the focus group discussion
to the selected beneficiaries and partners with the assurance of the data acquired
were treated with utmost confidentiality.

Statistical Treatment of Data

After all the documents were gathered, the researchers made analyzed the
information gathered using the appropriate statistical methods. A statistician was
consulted to do the certain task of tabulation.

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RESULTS AND DISCUSSION

Profile of the Respondents

Figure 2a. Age of the Respondents

Majority of the respondents aged from 41 to 50 years old (50%). Lehler

(2010) found out that majority of disciplines tend to produce their finest work in
their late 20s. Kanfer (2004) also added that full work outcomes for middle ages
affects workplace motivation for the self and family.

Figure 2b. Sex of the Respondents

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Most of the respondents were females with 26 or 97% this is due to financial
transactions done by women in the district. According to a new Gallup Poll, 700
million people or 70% of full-time workers do not feel engaged or emotionally
connected at work. That is a staggering number. But of the percentage that does
not just go through the motions at work, women have the highest rating. The
poll found that 33% of women feel actively engaged, versus 28% of men.
Intriguingly, women report more work engagement than men do. Despite
barriers to workplace equality--such as hiring, pay, and promotion. As supported
by Fondas (2013), women were more likely to feel committed to jobs than
men because women use flexible time and work arrangement more than men.
Flextime improves well-being which makes employees more effective at jobs and
also makes it feel more connected towards employers.

Figure 2c. Tribe of the Respondents

Most of the respondents in the local communities were Maguindanaon. This

was strongly supported by the recent statistics of Cotabato City’s profile that
comprises the city’s majority population, Maguindanao which is about 60%.

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Figure 2d. Educational Attainment of the Respondents

In this research, it is evident that most of the respondents were high school
graduate (15 or 50%) but they possessed good level in Arabic education.
Kaplan University in Santa Barbara provides high school graduates who are
qualified for office clerks and can work different kinds of administrative tasks
daily, equipped with a wide skill set as well as the ability to adapt to daily changes
in their responsibilities. Office clerks typically need communication, computer
and general office skills. Keep reading to learn more about these abilities, as well
as some advanced skills that might be required.

Figure 3. Programs of the Local Community in Developing

Their Financial Management
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This figure shows that the majority responses during the key informant
interview that programs in the community were properly observed. It implies
that the issues identified above have significantly contributed to the community
level. Therefore, if the leaders are capacitated, it will further develop their services
to the community. Thus, the community also becomes progressive. These
findings were supported by the situation analysis conducted by US Government
Accountability Office that preparing budget plans and regular updating of the
expenditures are at the core of economic and public sector reform programs
in most nations around the world and evidently the best methods for effective
financial management. Trecker (1977), explained that regular visit of the
monitoring team particularly on the financial performance of an agency can
greatly help the financial management of the organization as it assures the proper
delivery of social services among recipients.
On the other hand, respondents shared during the interview that there had
been a slightly low in attending seminars because it required financial counterparts
and some participants are being afraid of the requirements given by the speakers.
However, other countries despite not attending seminars like South Australia
secured administrative and employee development through offering Financial
Management Capability (FMC) Program at University of Adelaida that aims to
ensure staff with financial responsibilities, supported and developed in effective
financial practices that meet organizational requirements (Al Shami, 2012).

Best Practices Adapted by the Local Community in Managing their Finances

Financial management practices are likely to have a marked effect on the
financial performance with a vast potential for financial growth. Hence, it delves
deeper work on budgeting, financial decision and provides a broader perspective
by identifying trends in certain aspects of financial decision-making (Al Shami,
2012).
In Cotabato City, during the recent search for the seal of good housekeeping,
the strong practices applied to achieve the award were: effective planning and
leadership, transparency, communicating the vision through consultation, good
values in reporting and liquidation as well as technology adaptation. This award
gained a positive momentum to the people of Cotabato in engaging activities
tantamount to economic advancement and stability. As stated by Fisher (2009),
to have an effective managerial oversight of the finances in an institution, it needs
to consider the managing finances in three respects: (A) Planning, looking at
the future of the agency and ensuring that it will be financially healthy in the

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short- and long-term through strong support of leaders and active involvement
of stakeholders, (B) Monitoring, keeping an eye on what is happening in the
finances and taking action when things deviate from the plan, and (C) Reporting,
having a comprehensive roadmap of how your unit performed financially in the
last period (month, quarter, half year or year) for transparency, using that to
make decisions and put plans in place for the next period.”
In addition, faith-based is also practiced because it is imbedded in the
culture of community. This is related to Dr. Jabnoun’s (2012) statement that
organizations should guide their people as to what is expected from them before
they are made responsible for choosing either. As evident, Allah (SWT) the
Almighty High guides people as to what is right and wrong before holding them
responsible for their deeds.

Challenges in Financial Management

With the growing pressures for enhanced service delivery and the challenges
of budgetary crises and fiscal shocks, the need for improved budget processes
and innovative financial management techniques is critical in developing
and emerging economies. The local government unit in Cotabato City faced
the following issues in their daily financial management affairs: data gaps on
the amount collected and reported, liquidation of cash disbursement, slow
approval of the request budget and lack of skills in analyzing financial reports.
The methodology applied in gathering these data was deepened in focus group
discussion. This implies that the more transactions held in the day could expect
its challenges. Thus, the local officials have to find a way for improvements.
According to Codija (2015), modern-day financial management still poses
specific challenges to government unit. These operating obstacles includes issue
on accurate record keeping, not presented timely financial reporting, lack of skills
in financial sourcing and dilemma on regulatory compliance. Other financial
hurdles relate to borrowing arrangements, financial analysis and operational
funding.

CONCLUSIONS

Based on the findings of the study, the researchers concluded that there was
a good financial management in terms of funding the local government units in
Cotabato City as a basis of compliance by the modernization program of every
government. The seal of good housekeeping applied to and by every city was

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grounded with sound financial system in the operation of its districts. The strong
practices applied to achieve the award were effective planning and leadership,
transparency, communicating the vision through consultation, good values in
reporting and liquidation as well as technology adaptation. The implication of
these efforts provided more preparations to the local officials in managing the
affairs of the community.
The participants’ experiences in establishing a seal of good financial
housekeeping was a great task. They have to use a high diplomatic approaches
in working out requirements towards achieving the award. Manifestations of
opposition they managed especially in dealing with co-workers were supporters
of the previous administration. Everybody is involved in the process along the
way of communicating the vision with clear explanation.

TRANSLATIONAL RESEARCH

Given the findings of this study, the need to institutionalize a good financial
housekeeping is relevant and applicable to every local community both in urban
and rural areas.
As such, the findings of this study would create the positive environment of
financial management that will lead to a profound advancement in every local
government unit. Moreover, there has been a ground for crafting a standard
system of intervention using what has transpired in this research through
sustainable community-based programming that is supported by legislations
and public enunciation. The sustainable programming should be transmitted in
different levels which served as the continuity of the process.
The educators should pursue more innovative and creative advocacy on
popularization of good financial management using creative media, information
and instructional materials written in local dialect for the community to
properly understand the core message. The academe must continue this model
of collaboration through replicating into other universities and colleges through
conducting trainings and seminars for faculty members and administrators.

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