Dear Colleagues
A big part of the Tr-Ac-Net agenda is to get accounting sorted out so that it does what it needs to do.
Accounting is not meant to be a system that enables the corporate world, and indeed any organization, including government, to hide behind a set of numbers that are legally right but make no sense and certainly do not portray a "true and fair" view of the financial situation of the organization.
At their core, economics, and accounting are quite simple subjects. But modern law now makes a mockery of accounting principles ... and complex legal constructs aim to defeat the basic gravity of economics. Many will argue that it works, and that there has been the longest period of economic progress in the United States in history over the past two decades. This is a myth and it will be debunked in due course.
I will argue that there has been incompetent accounting in recent times, and corporate leadership that has embraced legal smoke and mirrors accounting with open arms. As someone who became a Chartered Accountant in the UK in 1965, I am appalled at the failure of the accountancy profession around the world to demand better of its members ... but as one of the senior people in the accountancy world told me almost 20 years ago ... accountancy is no longer a profession, it is a business.
One of the changes that is needed in the accountancy world is a change in focus from satisfying the private needs of an organization to satisfying the the broader needs of the society. The title of Certified Public Accountant (CPA) is misleading, because the CPA has little or no role in ensuring that the public is correctly informed about the financial situation and performance of an organization ... merely to report privately according to legal rules.
When the question: "Accountability to whom?" is asked ... there is nothing that requires that it is the "public" that gets the information. The nearest that the public gets is when a member of the public becomes a stockholder in a public company, at which point this stockholder is entitled to a set of information. But the public as a whole is never entitled to much of anything from the world's major economic entities ... and any potential for disaster is efficiently hidden.
There is a lot of work to do to get accounting so that it does the work that needs to be done. Fortunately modern technology can be an enormous help.
Sincerely
Peter Burgess
Showing posts with label Accounting. Show all posts
Showing posts with label Accounting. Show all posts
Thursday, December 20, 2007
Friday, December 14, 2007
Cost effective anti-malaria interventions
Dear Colleagues
Over the past five years there has been a major increase in the fund flows related to anti-malaria interventions. It is expected that in 2008, there will be more than $1 billion disbursed related to malaria work.
But it is interesting to note that the easy sound bite about child death ... "A child dies in Africa because of malaria every 30 seconds" ... or "some 3,000 children under 5 years of age die in Africa every day" remain the same now as they were two and three years ago. Is this lazyness on the part of the PR people ... or is this because the impact of the funding is insignificant.
With so much funding, it is reasonable to expect that there will be some cost accounting and performance analysis. President Bush made it clear that this was going to be a characteristic of the President's Malaria Initiative (PMI) and everyone talks about the importance of performance metrics. But in reality, the presently available performance metrics are simplistic and merely confirm that certain activities have been carried out ... which is a start ... but there is little about how effective these activities are in addressing the burden of malaria.
What is the goal? To reduce the burden of malaria in the society.
What is the burden of malaria? There are many elements of which the following are important. How much cost does this have?
1... High mortality among young children
2... High mortality among pregnant women
3... Mortality among all other groups in the population
4... Morbidity among all groups in the population ... which has a big economic impact when working age adults are incapacitated
5... Lost working time due to malaria
6... Cost of anti-malaria interventions
...1... Medical care
...2... Personal protection (coils, sprays, etc)
...3... Personal protection (bednets)
...4... Interior residual spraying (IRS)
...5... Source control ... larvaciding
...6... Adult mosquito control ... ULV adulticiding
What are the key metrics that show progress and relate progress to the costs of the associated anti-malaria activities?
1... Reduction in mortality among young children
2... Reduction in mortality among pregnant women
3... Reduction in mortality among all other groups in the population
4... Reduction in morbidity among all groups in the population
5... Reduction in lost working time due to malaria
6... Reduction in the cost of needed anti-malaria interventions
...1... Medical care
...2... Personal protection (coils, sprays, etc)
...3... Personal protection (bednets)
...4... Interior residual spraying (IRS)
...5... Source control ... larvaciding
...6... Adult mosquito control ... ULV adulticiding
7... Reduction in the prevalence of malaria parasite in the human host
8... Reduction in the prevalence of malaria parasite in the mosquito population
9... No emergence of resistance in any of the anti-malaria interventions
10.. No environmental damage
11.. No negative side effects for the human population
What is the cost? What is the optimum cost? How to get the least cost and the most benefit for anti-malaria interventions
...1... Medical care
...2... Personal protection (coils, sprays, etc)
...3... Personal protection (bednets)
...4... Interior residual spraying (IRS)
...5... Source control ... larvaciding
...6... Adult mosquito control ... ULV adulticiding
...7... Cost of data collection, data logistics, data analysis and administration
The metrics described here are a lot more substantive than anything that seems to be available at the present time in the malaria sub-sector ... though there will be around $1 billion disbursed in 2008 to address the malaria component of African health.
The international relief and development sector does not have a good track record on financial control, cost accounting and related matters. The good news is that there is some discussion of the need for performance metrics. The bad news is that what currently goes for performance metrics is very limited in quality and comprehensiveness.
With limited performance metrics ... performance is compromised. The cost is huge. Good management information is possible. Good management information is used in the corporate sector, but good management information is almost entirely absent in the public sector, and especially in the international relief and development sector. This is obscene, and serves only those that want to rip off the system or are engaged in activities that have little or no value.
Your comments are welcome.
Peter Burgess
Over the past five years there has been a major increase in the fund flows related to anti-malaria interventions. It is expected that in 2008, there will be more than $1 billion disbursed related to malaria work.
But it is interesting to note that the easy sound bite about child death ... "A child dies in Africa because of malaria every 30 seconds" ... or "some 3,000 children under 5 years of age die in Africa every day" remain the same now as they were two and three years ago. Is this lazyness on the part of the PR people ... or is this because the impact of the funding is insignificant.
With so much funding, it is reasonable to expect that there will be some cost accounting and performance analysis. President Bush made it clear that this was going to be a characteristic of the President's Malaria Initiative (PMI) and everyone talks about the importance of performance metrics. But in reality, the presently available performance metrics are simplistic and merely confirm that certain activities have been carried out ... which is a start ... but there is little about how effective these activities are in addressing the burden of malaria.
What is the goal? To reduce the burden of malaria in the society.
What is the burden of malaria? There are many elements of which the following are important. How much cost does this have?
1... High mortality among young children
2... High mortality among pregnant women
3... Mortality among all other groups in the population
4... Morbidity among all groups in the population ... which has a big economic impact when working age adults are incapacitated
5... Lost working time due to malaria
6... Cost of anti-malaria interventions
...1... Medical care
...2... Personal protection (coils, sprays, etc)
...3... Personal protection (bednets)
...4... Interior residual spraying (IRS)
...5... Source control ... larvaciding
...6... Adult mosquito control ... ULV adulticiding
What are the key metrics that show progress and relate progress to the costs of the associated anti-malaria activities?
1... Reduction in mortality among young children
2... Reduction in mortality among pregnant women
3... Reduction in mortality among all other groups in the population
4... Reduction in morbidity among all groups in the population
5... Reduction in lost working time due to malaria
6... Reduction in the cost of needed anti-malaria interventions
...1... Medical care
...2... Personal protection (coils, sprays, etc)
...3... Personal protection (bednets)
...4... Interior residual spraying (IRS)
...5... Source control ... larvaciding
...6... Adult mosquito control ... ULV adulticiding
7... Reduction in the prevalence of malaria parasite in the human host
8... Reduction in the prevalence of malaria parasite in the mosquito population
9... No emergence of resistance in any of the anti-malaria interventions
10.. No environmental damage
11.. No negative side effects for the human population
What is the cost? What is the optimum cost? How to get the least cost and the most benefit for anti-malaria interventions
...1... Medical care
...2... Personal protection (coils, sprays, etc)
...3... Personal protection (bednets)
...4... Interior residual spraying (IRS)
...5... Source control ... larvaciding
...6... Adult mosquito control ... ULV adulticiding
...7... Cost of data collection, data logistics, data analysis and administration
The metrics described here are a lot more substantive than anything that seems to be available at the present time in the malaria sub-sector ... though there will be around $1 billion disbursed in 2008 to address the malaria component of African health.
The international relief and development sector does not have a good track record on financial control, cost accounting and related matters. The good news is that there is some discussion of the need for performance metrics. The bad news is that what currently goes for performance metrics is very limited in quality and comprehensiveness.
With limited performance metrics ... performance is compromised. The cost is huge. Good management information is possible. Good management information is used in the corporate sector, but good management information is almost entirely absent in the public sector, and especially in the international relief and development sector. This is obscene, and serves only those that want to rip off the system or are engaged in activities that have little or no value.
Your comments are welcome.
Peter Burgess
Monday, December 10, 2007
Accounting and accountability
Dear Colleagues
Hardly a day goes by without some new revelation about failed accounting and an inability to track resources. There is a disturbing pattern in the reports and the stories carried in the media. The problems are not being found in a timely way. Rather they are coming to light a long time after the accounting failed and the ability to track resources was lost.
One almost has to ask "Why bother?" with the investigation into lost resources when months and years have already past. It is usually way too late to recover the lost items, and arguably too late to hold the responsible parties to account. Which, of course, is probably why the investigations are delayed in the first place.
I don't hear any outcry from the accountancy profession about this epidemic of failed accounting ... nothing from the big name accounting firms ... and hardly a wimper from any quarter. I am amazed, and frankly, absolutely disgusted.
Clearly there is a need for some more rigorous oversight mechanism that reflects either a more appropriate use of modern technology or reverts to a better use of very old fashioned techniques that used to serve quite well. The status quo is unacceptable and needs to change.
Sincerely
Peter Burgess
Hardly a day goes by without some new revelation about failed accounting and an inability to track resources. There is a disturbing pattern in the reports and the stories carried in the media. The problems are not being found in a timely way. Rather they are coming to light a long time after the accounting failed and the ability to track resources was lost.
One almost has to ask "Why bother?" with the investigation into lost resources when months and years have already past. It is usually way too late to recover the lost items, and arguably too late to hold the responsible parties to account. Which, of course, is probably why the investigations are delayed in the first place.
I don't hear any outcry from the accountancy profession about this epidemic of failed accounting ... nothing from the big name accounting firms ... and hardly a wimper from any quarter. I am amazed, and frankly, absolutely disgusted.
Clearly there is a need for some more rigorous oversight mechanism that reflects either a more appropriate use of modern technology or reverts to a better use of very old fashioned techniques that used to serve quite well. The status quo is unacceptable and needs to change.
Sincerely
Peter Burgess
Friday, December 7, 2007
Progress towards Millennium Development Goals
Dear Colleagues
In some cases there has been very good progress towards the Millennium Development Goals (MDGs) and in some cases not very much at all.
My own take on the MDGs is that they are more public relations than they are substance. They are typical of the modern era of established governance methodologies ... big on what is going to be done, but rather little to ensure that what is actually needed gets done.
In the year 2000, the UN makes committments to do big things by 2015. WOW! But who in the UN system is going to be around in fifteen years to explain anything. After five years a high profile and costly set of consultants reported on progress to date, and in simple terms, reported that progress was generally not very good at all. Progress in places like China and India with huge populations made the progress look better than it might have otherwise ... but in most places the relief and development sector and its leadership had made little or no progress. At the five year mark, the big recommendation was that issues like poverty could be addressed effectively by massive increases in the funding for the relief and development sector.
I respectfully disagree. There are two things that are needed. One is to make use of available resources in the best possible way. There needs to be very much improved accounting for resources, and especially there needs to be metrics about cost effectiveness. If the available money was used in the best possible way ... that is in the most cost effective way ... progress could be significantly accelerated.
When resources are being used well, then it is time to ask for more resources. At the moment the organizations involved in the relief and development sector either do not know much about the activities that are being funded and the results being achieved, or they are totally unwilling to share this information in a way that is useful.
Money is not the only resource that needs to be accounted for. There is also the human resource component. As things stand at the moment the human resource component is for all practical purposes ignored, and, not surprisingly, progress is not sustained. Imagine how much more could be done if local people were effectively mobilized as a resource for progress.
I see a lot wrong with the present system of relief and development assistance, but I do not see analysis of this. Instead I see a lot of thinking about how more money can be mobilized for something that really does not work.
Sincerely
Peter Burgess
The Tr-Ac-Net Organization
In some cases there has been very good progress towards the Millennium Development Goals (MDGs) and in some cases not very much at all.
My own take on the MDGs is that they are more public relations than they are substance. They are typical of the modern era of established governance methodologies ... big on what is going to be done, but rather little to ensure that what is actually needed gets done.
In the year 2000, the UN makes committments to do big things by 2015. WOW! But who in the UN system is going to be around in fifteen years to explain anything. After five years a high profile and costly set of consultants reported on progress to date, and in simple terms, reported that progress was generally not very good at all. Progress in places like China and India with huge populations made the progress look better than it might have otherwise ... but in most places the relief and development sector and its leadership had made little or no progress. At the five year mark, the big recommendation was that issues like poverty could be addressed effectively by massive increases in the funding for the relief and development sector.
I respectfully disagree. There are two things that are needed. One is to make use of available resources in the best possible way. There needs to be very much improved accounting for resources, and especially there needs to be metrics about cost effectiveness. If the available money was used in the best possible way ... that is in the most cost effective way ... progress could be significantly accelerated.
When resources are being used well, then it is time to ask for more resources. At the moment the organizations involved in the relief and development sector either do not know much about the activities that are being funded and the results being achieved, or they are totally unwilling to share this information in a way that is useful.
Money is not the only resource that needs to be accounted for. There is also the human resource component. As things stand at the moment the human resource component is for all practical purposes ignored, and, not surprisingly, progress is not sustained. Imagine how much more could be done if local people were effectively mobilized as a resource for progress.
I see a lot wrong with the present system of relief and development assistance, but I do not see analysis of this. Instead I see a lot of thinking about how more money can be mobilized for something that really does not work.
Sincerely
Peter Burgess
The Tr-Ac-Net Organization
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