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Meaningful Metrics for a Smart Society
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Date: 2021-04-11 Page is: DBtxt001.php L0700-PP-OG-Program

... for a PROGRAM

Progress and Performance for a PROGRAM
The methodology for project monitoring and evaluation that has been the norm for several decades seems to have little relevance for stakeholders other than those directly involved with the project.
One of the issues is that the Keynsian multiplier produces favorable impact during the establishment of the project, and during the operation of the project, but then all of this is given back as the project unwinds and gets ready to terminate.
TPB Note: Over several decades travelling through more than 50 developing countries areound the world it became clear that projects that had a high profile in donor countries were insignificant in the beneficiary communities. The question was why this was so, given that most of the projects had been considered successful according to the monitoring and evaluation process being used.
Office review / desk studies
These studies are little more than a 'cop-out' and relatively easy to make a project look good as long as the project accounting and project reporting is dysfunctional. This is where my training as a Chartered Accountant became a problem because I do know ways in which performance can be determined even where there are poor transaction records.
Accounting for activities, not results Organizations like the World Bank keep very good records of how much they disburse, and this also applies to other development organizations like for example USAID and the United Nations. Some of the expenses of the project are obvious because the result of the expenditure can be observed ... people employed, space occupied, vehicles used and fuel sonsumed, for example. How the state of affairs has changed as a result of the project is rarely documented in an easy useful way. When the project terminates, there is nothing to show that the project ever existed.
Cash versus Accrual Accounting One of the reasons for this terrible situation is that most of the public sector throughout the world uses cash accounting, rather than the much more complete full accrual accounting. No major company on the planet uses cash accounting ... they all use full accrual accounting, in fact, it is required by law and the regulators, yet governments and publis sector organizations only operate (in the main) with cash accounting. Perhaps worse is that senior officials in governments and in many multilateral organizations like the World Bank, the UN and others have little or no understanding of the difference between cash accounting and full accrual accounting even though they might have advanced law degrees or PhDs in economics. It comes as no surprise, therefore, that the management systems for projects and programs at organizations like the Wrld Bank are primitive and ineffective.
Management by walking around
Even if there is very poor documentation of financial transactions, a lot of information can be discerned simply by walking around with eyes open and brain functioning.
... is inventory disappearing?
... what are vehicles being used for?
... do the scale of activities being observed match what seems to be being paid for? Common sense is very powerful!
Conclusion ... corruption
When large amounts of money do not seem to be resulting in any progress, the accounting will often give hints about where the money has gone. In most cases, there will not be enough information to satisfy a court of law, but the information is usually quite good enough to show that it is corruption that is getting funded and not project activities.

The text being discussed is available at

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TrueValueMetrics (TVM) is an Open Source / Open Knowledge initiative. It has been funded by family and friends plus donations from well wishers who understand the importance of accountability and getting the management metrics right. TVM is a 'big idea' that has the potential to be a game changer leveling the playing field so the wealth and power is shared on a more reasonable basis between people who work for a living and those that own the economy and the levers of power. In order to be effective, it cannot be funded in the conventional way with a for profit business plan, but absolutely must remain an open access initiative.

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