![]() Date: 2024-08-17 Page is: DBtxt003.php bk009021200 | |||||||||
TrueValueMetrics
ACTION INFORMATION FOR ALL OF SOCIETY Metrics about the State, Progress and Performance of the Economy and Society Metrics about Impact on People, Place, Planet and Profit Chapter 2 - SYSTEMIC DYSFUNCTION 2-12 FAILED ACCOUNTING | |||||||||
No accountants in the mainstream The ORDA world is dominated by economists, and political and social science experts. There are also some technical specialists in agriculture and engineering. But there are almost no accountants that have anything to do with operations. There are accountants who handle expense reports and travel advances. At the World Bank there are accountants that handle the financing side of the Bank's work. But accountants are not deployed in the analysis of development performance. There is almost nothing that addresses how to do accounting so that there is management information for development.
The system of analysis I learned in accountancy is very powerful, and when used in an independent and objective way is a great foundation of decision making and solving problems. Weakness in accounting I have always been struck by the weakness of accounting and management oversight in development. It is difficult to understand how the World Bank and the other donor organizations allowed accounting to become one of the weak links in development. My view of the problem in the 1980s was quite simple. At the time I wrote:
But later on I realised that the issue was partly this but also even more serious and deeply ingrained in the ORDA culture. In another situation I wrote:
The real reason that accounting is so bad is probably both of these. But it may also be more sinister. I am horrified that accounting is one of the failures in development, when it could so easily have been one of the great successes of development. But the advantage of weak accounting is that huge amounts of money have been able to be diverted to all sorts of personal benefit, at the expense of development performance. Every accountant knows that without transparency and accountability there will be problems. So the question of how ORDA funds disappear is not difficult to answer. ORDA funds disappear very easily, because there is a terrible lack of accounting, transparency and accountability throughout the ORDA community. When from time to time some information suggests that there is a problem, it is rare for there to be suitable and visible accountability. The whole culture of accountability, with people taking real responsibility for decision making and the outcomes is virtually non-existant.
How can huge amounts of funds disappear? Very easily when the accounting system is as deficient as it is throughout the ORDA community. The system in place would work quite well for a small, simple organization where the culture of ethical behavior was to a high standard. But the ORDA institutions are huge, are complex, are spread around the world, and the internal culture is complicated by multiple nationalities, backgrounds and professional agendas. Missing funds is no surprise. The system supports losing funds.
How can so much bad accounting take place and not cause much concern? The ORDA world does not have very much expertise in accounting and analysis. In fact it is almost better to say simply that the ORDA community has none.
It really is no wonder that funds are badly used, and funds cannot be found. | |||||||||
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