Thursday, 20 February 2014

Transparency or accountability ?

Politicians piously profess transparency and open government. But that is a qualitative  attitude not an act. It too often means only  access to lifeless and historical mass data. It has no primary operational point, only secondary  availability for academic research or statistical  purpose.

Accountability on the other hand, which is professed  but not practiced by government, is an act of discharge or formal process for  a purpose. It is to support with evidence and organised data the formation of policy and operational decision. That embraces the total management control system and also democratic discharge and renewal. At root is the transaction which once executed is not informative in isolation.

Often the word accountable is left meaningless and in the air as in 'making councillors accountable". But for what, to whom, and how ?

The total system concept means for a functioning enterprise the nervous system exactly as it is in the human frame: alive and dynamic with constant feedback and reaction. All organisations to a greater or lesser degree operate such a total system. The corner shop version functions considerably in the mind of the proprietor. As enterprises grow larger they must give greater attention to the design drawing and flow chart etc governing people (and machine) inter-action. The stated objective(s) of the enterprise will determine  the system  but there are timeless disciplines and techniques with many reflected in legislation.

Government(s) tend to be the only organisations that have not grown into that concept largely because of the ‘Ponzi’  or Bernie Madoff mentality in the face of supposed electoral pressures, and failure to link performance and stewardship reporting to electoral proposal. The worst recent case of government failure to do ‘proper accounts’ was that of Greece in 2009 but with UK not so far behind and the European Court of Auditors refusal to pass the accounts now for 19 years with no assurance likely in the future because of the basic defect. UK government's view of its own operations is officially said to be obscured

One must remove from one’s mind the artificial separation between numbers and words. Paradoxically in government “financial statements” are for other people. But quite simply there is the human aspiration and ‘people’ and material resource inextricably linked to the monetary resource. The recording and reporting essentials are very simple: money being a conveniently universal unit of measurement a finite amount is required to do what has to be done and stakeholders need to know the outcome; the exception is the laying out of funds (investment) and the anticipatory borrowing of money ahead of events with the score being kept for that. Contrary to what many people realise there are additional disclosure requirements such as for pay level scaling.

The Annual Report is the customary vehicle (except in government) for telling we interested parties what has been the performance, reasoning and outlook and then seeking a vote of approval plus renewed or changed authority to proceed ‘in office’. 

As regards disciplines and techniques there are a number of professional bodies. Accounting is represented principally by the ICAEW (Institute of Chartered Accountants in England and Wales; the Scottish Institute is separate !), CIMA (Chartered Institute of Management accountants) and CIPFA (Chartered Institute of public Finance and Accountancy). Some years ago there was an attempt (unsuccessful) at a merger. CIMA is least noticed in government and the Treasury ‘majority party’ are economists. The ICAEW has identified the lack of a CFO(Chief Financial Officer) at the cabinet table.

It is worth mentioning alongside the above 'philosophical' analysis that there are probably two causes of the many major project failures, Not only has there been a lack of project management skill in the manderinate but also an experience-lacking inability to think clinically and expressively about objectives and requirements sufficient for translation into IT system specifications.

Who will mend UK governance ?