Date: 2024-11-21 Page is: DBtxt003.php L0913-TVM-MMW-000023
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TrueValueMetrics ... Peter Burgess Manuscript
Making Management Work for Relief and Development |
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Chapter 23
Oversight |
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Absolutely Needed
No oversight is an abdication of responsibility No oversight is a serious abdication of responsibility. Oversight is needed in any organization. People behave well when they know that they are being watched, and behave in pretty bad ways when they think they can get away with it. The is especially true with money and other valuable. If there is money around and no oversight and control, it is going to disappear. This is a sure as gravity, and any organization that does not understand this and act in an appropriate way is going to lose money and have it diverted inappropriately. Again, this is not rocket science, just a common sense interpretation of human nature. This argues, therefore, for an strengthening of oversight in everything that is being done. Oversight is powerful A system of oversight forces people to do the right thing. With a proper oversight system people doing good work get positive reinforcement, and people doing bad things will be caught, and appropriate measures can be taken. Oversight is very expensive when it is done without a decent management information system, but it is not at all costly when there is good management information. Management information and oversight go naturally together. They are natural partners. With a good management information system, oversight can be simple low cost “desk review” when the system shows good performance. But when management information shows problems, then oversight should be heavy and hard, and this has costs. But the costs of oversight are low compared to the cost of bad performance. Net net, management information and an oversight function add value to an organization rather than being just a cost. My experience at Continental Seafoods Inc. showed how powerful the oversight function can be. In my own career I have used the monthly reporting technique over and over again, always with success. In one company (Continental Seafoods Inc.) we required the monthly reports from all over the world to be fed back to the head office by the end of the second business day after the month end. If the results were not what we expected we took action. If the reports were delayed beyond about 36 hours we took action. Either the President of the company or myself (CFO) were on a plane and less than 7 days after the month end we were in the office of the problem operation. This approach was very effective. Everyone knew that the feedback of information was not just an exercise that was a big effort and a waste of time ... they knew there would be consequences. But they also knew that we all had the same goal ... to get good performance from the company. Most times when there were performance problems the issues could not be resolved simply by the local office, but needed the intervention of more senior “management”. I am still amazed how rapidly performance in this company improved. There was distributed decision making, good management information and active oversight. Though the goals were corporate goals, there is no legitimate reason why this cannot work for most relief and development activities. There is little or no effective oversight in the relief and development sector, and this has had terrible consequences. Implementing good oversight In my experience oversight works very well when it is flexible and unpredictable. It is much less valuable when the oversight is just routine and can be anticipated. How many project or program sites around the world get any visits at all from senior staff or an oversight officer during the course of the project. Is it 1% or 5% or 90%? In my view, EVERY site should get a visit not just once, but several times. And every site should be sending some sort of activity report back to the oversight office every month, and just a day or two after the end of the month. This is not a long time consuming study ... just something to advise what is going on and confirm things are going according to plan. Who should make the visits? It does not really matter ... as long as the person has a reasonable understanding of the project or program, and understands that they are just making sure that everything seems to be working OK. If the project site is big enough to have an accounting office, they should listen not only to the head person at the site, but also hear from the accountant. They should usually have some check list of questions worth asking, and return with a good appreciation of the activities of the site. When everything is going well, oversight can be handled by someone with rather little experience ... it is valuable training and experience, and serves perfectly well. If something does not seem to be going well, then oversight has to be handled by someone with more experience. If an oversight visit results in some unanswered questions, then a more experienced person should make a visit ... and this might result in either some decisions that the project staff are not good enough, or that the project work is more difficult than expected and more resources are needed. If the problem is that funds are going missing this also can be addressed appropriately. The same sort of oversight process should be in place in a sort of reverse cascade to the origin of the funding. There should also be management information that follows the fund flow from funding source to the eventual use of the money and the value received. The importance of timeliness Oversight action is so much more effective when it happens quickly. What is the point of oversight action years after the money has been stolen. If the money goes missing on Tuesday, it would be good if there can be oversight action that day or the next. Most good accounting systems can identify the loss of money very rapidly ... but the relief and development sector, and most governments have chosen not to have good accounting systems. For performance, monthly information is a good interval. If reports about monthly performance are available within two weeks of the end of the month it is possible to track performance without too much of a delay, and issues can be addressed while they are still fresh. Audit is not an oversight tool Audit is often used in the relief and development sector, but the value of these audits is questionable. Where there is weak accounting, audit is little more than window dressing and a cover up. For me, it is also a sign that the organizational management is inadequate and organizational performance questionable. Audit is not a very useful tool. It adds nothing to what managers should already know. If an audit is needed, there is a problem, and the problem is not going to be fixed by the audit. Lack of information or lack of internal control is solved by fixing the underlying accounting and the performance of the staff. The powerful tool is accounting. Audit can help ascertain whether the accounting is good enough and whether the reporting reasonably reflects what is going. But by the time an audit has been done, so also the damage done, and the culprits long gone. Any time I hear that an audit has been called for, I know there is a problem, I can be pretty certain the accounting is inadequate, probably that there have been misappropriated funds, and there is a mess. I also know that the audit will do very little to correct any of this, and that it will serve to protect the establishment from the sort of embarrassment that they should be facing. Instead of doing audits, there should be independent oversight teams that represent the public and are on the look-out for both lost funds and low effectiveness. Monitoring and evaluation is not oversight Monitoring and evaluation (M&E) is a very widespread technique in the relief and development sector, but it is not effective oversight the way it is normally carried out. If M&E is used only at the end of a project, it costs a lot and does little to make the project performance optimum. Its value is limited to being feedback to donors, which is important, but not oversight. A better feedback to donors is simply by having a well functioning management information system that makes it possible to provide donors with all the information that they want. Monitoring and evaluation (M&E) is usually too little, too late. It has been used as one of the main tools for “managing” in the relief and development sector. But M&E is a poor management tool since it is usually not done at the right time, and the information that is obtained cannot be easily used as part of a “management process” and be routinely available not just when an M&E exercise is carried out, but all the time. In M&E work, an independent analyst will attempt to determine how well an organization has done in meeting its objectives. This analysis is usually done at the completion of a “project” and is frequently a requirement of the organization that funded the project. But this form of M&E is expensive, and the information has limited value compared to getting similar information as a routine part of a “management process” where the information is being used to improve performance and get the optimal results. There is no point in measurement if it is not used. There must be feedback, that is, ways to get the measurement and its analysis into the system so that people learn and better decisions can be made. Keeping people honest and on the right track Oversight is absolutely essential in order to keep people honest and on the right track. Hardly anyone does the right thing unless there is a system in place that helps people to make the right decisions. No oversight, and the worst of people will come out. Good oversight, and most people do the right thing and everything works smoothly. |
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