ATCnet
The Transparency and Accountability Project

Accountability Program For Government

COMMENTARY

Peter Burgess

ATCnet ... Accountability Program For Government

Overview

ATCnet Accountability Program for Government

Introduction

ATCnet has launched a comprehensive program to improve accountability and transparency in the use of government resources. In this context these resources comprise financial, material and human resources used in government operations and programs and for development and emergency humanitarian relief. These resources are derived from a variety of sources including tax revenues and other current revenue of government, capital revenues of government, commercial and official development assistance (ODA) borrowings and grants. The accountability program in this context would also address the development and investment resource flows associated with foreign direct investment (FDI)

The ATCnet Internet database on accountability is the first global independent forum for stakeholders in our global society to access critical data about socioeconomic progress. are easily available to all. There are five main program areas:

• Accountability for Government
• Accountability for ODA organizations
• Accountability for International NGOs
• Accountability for International Corporations
• Accountability for Local NGOs and Small Business

Accountability for Government

Accountability for Government is probably the most critical area of accountability for success in socioeconomic progress. Public resources reflect the largest resources flows in most countries, and the efficiency of their use is a significant determinant of development performance.

The ATCnet program has a focus on making excellence visible, not merely identifying issues of low performance or worse. The program makes it far easier for stakeholders to get easy access to important information and to learn objectively about the accountability of the entities engaged in the allocation and use of scarce resources being used for public expenditures in general operations, programs and development and emergency.

The ATCnet Accountability Program is based on the concept that accountability is an integral part of an organization’s management system, and not simply an external afterthought. The Whitehall system of government accounts developed in an era of manual accounting systems had a substantial degree of accountability built into the processes, and is, in fact, a very solid foundation for excellence in accounting, accountability and transparency.

The ATCnet Accountability Program enables government to implement a comprehensive accountability system for government at modest cost. It also brings a clear independence that the ATCnet work including the reports and feedback both local and international credibility.

The ATCnet Accountability Program is a practical response to widespread criticism of government and official development assistance (ODA) organizations concerning the allocation of resources and the use of scarce public and ODA resources. While both government and the ODA institutions have made progress towards better systems and procedures, the public, as a stakeholder in both government and ODA performance, cannot see the results and remains totally unconvinced. Public perception worldwide of development program performance is limited to information flows that are heavily influenced by media perceptions (and maybe a media agenda). Objective factual information is not easily accessible even though much useful information is frequently existing though outside any generally accepted accountability framework. The ATCnet Accountability program for Government brings information about Government initiatives into a forum for public dialog with the facts and the perceptions clearly presented and easily accessible. Public policy translates into government programs and legislation. The ATCnet Accountability program enables the results of government initiatives to be pbjectively evaluated from the perspective of public stakeholders.

The ATCnet Accountability Program is facilitated where there is good accounting, and accounting reports are prepared on time and using generally accepted accounting principles. But the ATCnet program goes far beyond the normal process of account validation called “audit”. And it even goes beyond the “value for money” innovation in audit that has been popularized in recent years. The ATCnet Accountability program for Government has a focus on value creating development investments, and uses value creation is the primary measure of performance assessment. No other accountability program is based on this methodology. Using this approach, ATCnet is able to differentiate very clearly between activities that make good use of limited financial, material and human development resources, with those that are value destroying and actually waste resources. In contrast to prevailing “procedure based” audit and assessment, the ATCnet approach has a focus on the results achieved relative to the resources used. This is a profound difference that enables good decisions to be recognized for the results achieved. It also addresses the issue of performance degradation resulting from delays in decision making and ineffective decision making processes. It provides a framework to systematically address the issues of national priority and community priority versus the priorities for resources allocation mandated by donors and other external funding agencies.

The ATCnet Accountability program for Government incorporates “benchmarking”, a process that helps to link the use of public resources with specific goals of public policy. The benchmarking technique has been used effectively to focus scarce resources on emerging issues that need attention now to avoid more serious problems in the future. Where benchmarking has been successful, the use information flows from all key stakeholders, including the public, is very similar to the ATCnet process.

ATCnet conclusions from analysis of governmgent accounting system reform driven by the ODA community are that accountability is rarely improved in the way projected by the reform proponents. This is frequently because the approach is technical rather than managerial, with little understanding and appreciation of the issues of change management and controllership in accounting. Major reform of an accounting system without equivalent reform in other inter-related aspects of the organization will only yield modest results at best. Existing local procedures and systems are not effectively integrated into the reformed system and the result is a far more fragile system than previously existed, albeit with more technological capability. The more comprehensive approach advocated by ATCnet and the use of objective and independent accountability has the potential to yield material practical improvements in government performance, as well as an even greater improvement in the public and external perception of performance. In many cases the analytical code systems being used do not allow the analysis required for government reporting to be done in a simple way. There is often too little reflection on how government is organized in terms of Ministries and Departments and Agencies, and around programs and projects, and in terms of Ministerial Portfolios, all of which can change at any time depending on the decisions of the Government and the Legislation. ATCnet understands that effective reform that results in improvement also requires the maintenance of control and a continuum of analytical capability.

The ATCnet Accountability program for Government is unique in being a methodology that systemically addresses the issues of resource allocation and resource use within a comprehensive context. This is the first time that the same level of analytical effort will be deployed for analysis of performance rather than the evaluation of plans. There have been many initiatives to improve budgeting and planning and put these in a broader contextual framework to improve results. The ATCnet program addresses a similar set of issues at the operations and implementation stage from the accounting, performance and accountability perspective. The accountability feedback offered by the ATCnet methodology will highlight the impact of effective planning and the damage inflicted by planning error. The ATCnet program uses a methodology that takes complex inter-relationships at an academic level, and converts these to practical observations and feedback from the stakeholders.

Steps to Implementation of Accountability for Government

1. 1. ATCnet builds on what is already in place. Accordingly there needs to be a rapid review of the accounting systems of government. The amount of work associated with this will depend on the status of the systems and the manner in which the processes are being carried out. In connection with this an assessment of the reports presently available and being used will be made. In addition the manner in which historical data is stored and archived will also be determined. Review and assessment of the analytical code systems in use and the capacity of the system to provide the managerial and accountability reporting that is needed. This information needs to compiled under the team leadership of a very senior person. The work can be done in an elapsed time of 6 weeks from the initial mobilization of the team. ATCnet local staff will complement an International ATCnet team leader. Because of recent changes in the way government accounting is done, it is likely that much of the underlying strength of the old accounting system has been lost.
2. 2. ATCnet works on the basis that development is a continuum. Certain government financial information should be easily accessible in a standard international format for stakeholder analysis. This information should be organized so that a consistent set of time series are available going back from the current period as far back as possible. Objective analysis and accountability are facilitated with a strong reference framework of time series statistics. A lot of this information will already be available in financial reports and statistical reports. How much is available in forms that will readily facilitate cross country comparison is to be assessed. This work will be done almost exclusively by ATCnet local staff and associates under the supervision of ATCnet senior staff. The timeframe for doing this work is 3 to 6 months
3. 3. ATCnet is committed to the idea that the public is the primary stakeholder, both within the country and in the public arena. The public needs to have the opportunity to be much better informed so that they can call for more effective allocation of global resources, including resources derived from the world capital markets. This means that data that is presently in a variety of forms around the government and throughout the country should be made consistent with the emerging ATCnet international standards. The ATCnet database will be used as the foundation for reporting using an international standard format. ATCnet staff have experience of the international recommendations for government financial reporting and are deploying a database environment that will go beyond the IMF GFS standards.
4. 4. ATCnet will examine the possibility of implementing a set of benchmarks within the accountability program to suit the government. Such a system will be utilized at some level within the public accountability process independent of any government benchmark system that will be implemented
5. 5. ATCnet will make use of publicly available Development Cooperation Report information and other materials to get some understanding of the resources flows that have been allocated to the country. Work done should build on already available information. The ATCnet program that incorporated feedback from operating units and the public in a systemic way ensures accountability in ways never before possible.
6. 6. ATCnet recognizes that the banking and financial sector, including public finance are key factors in development and socioeconomic progress. The accountability program will highlight issues that arise as a result of the history and status of the banking and financial sector. ATCnet accountability work should be done in cooperation with the regulatory authorities of the banking and finance sector, including the Central Bank
7. 7. The funding available for the work will determine how fast the work can be done and the benefits realized. The following is a possible implementation scenario.A study phase and demonstration of the accountability database functionality can be implemented for a total of $80,000 over a period of three months disbursed as follows: Prior to mobilization $20,000. Mobilization plus one month $20,000. Plus two months $20,000. Plus three months $20,000.ATCnet anticipates a senior level team of 3 people, and a team of 20 junior staff in a subsequent initial phase, expanding to around 150 in later expansion phases. The initial monthly cost is estimated to be $50,000 rising to $ 200,000 when the team is fully deployed.