While some fund flows are managed excellently many others are not. There are problems with fund flow accountability at every stage of the process and some of the fund flows are severely compromised. Because of weak performance metrics it is not easy to know which ones are excellent and which are not. Weak financial control has been endemic and as a result all sorts of resources have gone missing ... stolen money ... stolen inventory ... over invoicing ... under delivering. Embezzlement of all sorts ... petty corruption and grand corruption.

Part of the problem is that all of the participants have a very narrow interpretation of their responsibilities for transparency and accountability ... essentially every organization thinking of itself in a bilateral relationship with the donor or source of funding ... and the public having no stake in anything. In this arrangement it is relatively easy for a bilateral relationship to provide fertile ground for weak performance and worse.

Little has been done over very many years to end this comfortable arrangement, and all the incentives in place encourage its continuation.

The amount of money being raised for international relief and development assistance is huge. Fund raising in the aftermath of natural disaster is especially impressive, and shows how supportive many people are of development initiatives. But sadly the relief and development industry is less than candid about how the resources are used and what is being accomplished.

Phantom Aid

In 2003 a well know NGO based in the UK called this Phantom Aid. Others before had called the phenomenon “Black Hole Development” implying that no matter how much fund flow there was, the results would still be the inconsequential.

This is a better model for development with the money getting used on the ground for real work that can deliver meaningful results.

No system

There is no system for doing development accounting and producing development performance reports. Instead of having a management information system that gives the performance information that is needed, the ORDA world does exercises that suggest that they are being responsible, but in fact does nothing to help them have control.

No use of value analysis methodologies

Value analysis methods have been used as long as I have known anything about accounting (more than 40 years). They became fashionable in the corporate financial analysis world in the mid-1990s with the promotion of the EVA methodology by Bear Sterns (to check this). But value analysis is missing from the ORDA world completely.

No management information

And nobody in the ORDA world uses management information. The ORDA process precludes management in the form that produces efficiency for the corporate world.