(c) Unless a different meaning is explicitly provided in the specific law governing the relationship of particular agencies, the word "supervision" shall encompass administrative supervision as defined in this paragraph. (3) Attachment. - (a) Attachment refers to the lateral relationship between the department or its equivalent and the attached agency or corporation for purposes of policy and program coordination. The coordination may be accomplished by having the department represented in the governing board of the attached agency or corporation, either as Chairperson or as a member, with or without voting rights, if this is permitted by the charter; having the attached corporation or agency comply with a system of periodic reporting which shall reflect the progress of programs and projects; and having the department or its equivalent provide general policies through its representative in the board, which shall serve as the framework for the internal policies of the attached corporation or agency. (d) Matters of day-to-day administration or all of those pertaining to internal operations shall be left to the discretion or judgment of the executive officer of the agency or corporation. In the event that the Regional Secretary and the head of the board or the attached agency or corporation strongly disagree on the interpretation and application of policies, and the Regional Secretary is unable to resolve the disagreement, he/she shall bring the matter to the Regional Governor for resolution and disposition; (e) Government-owned or controlled corporations attached to a department shall submit to the Regional Secretary concerned their audited financial statements on or before the 15th day of January of each year; and (f) Pending submission of the required financial statements, the corporation shall continue to operate on the basis of the preceding year's budget until the financial statements shall have been submitted. Should any government-owned or controlled corporation incur an operation deficit at the close of its fiscal year, it shall be subject to administrative supervision of the department; and the corporation's operating and capital budget shall be subject to the department's examination, review, modification and approval. Chapter 5 Supervision and Control SEC. 12. Regional Secretary's Authority. - The Regional Secretary shall have supervision and control over the bureaus, offices, and agencies under him/her excluding chartered institutions or government-owned or controlled corporations attached to the department, subject to the following guidelines: (1) Initiative and freedom of action on the part of subordinate units shall be encouraged and promoted, rather than curtailed, and reasonable opportunity to act shall be afforded those units before control is exercised; and 40