Having to spend time in bed and at home dealing with a severe bronchitis is a good way of writing out some thoughts in a more profound manner than otherwise possible. I try to avoid gibberish as a result of having to swallow multiple antibiotics.
My former colleague and fellow blogger Simon Perks wrote an interesting post on his Sockmonkey consulting blog. I invite you to read it first, then come back, because I want to present the other side of that quite challenging problem for all public administrations: which money to use and how to use it, or rather, how to account for its use in the most transparent way possible.
Accountability
Simon states, and I entirely agree with his position, that any (public) entity needs to be aware of where they accept money from, as it may well come with some implicit or explicit strings attached. I like his idea on a three pronged approach using a policy, an approval process and a register. These will clearly enhance transparency.
However, there is one key responsibility that comes attached to any use of public means, which is accountability. As head of internal audit of a government agency, I am charged with providing reasonable assurance on good governance, and accountability is an essential aspect of good governance.
When the cure is worse than the disease
In our traditional command and control environment, which is much of any Western structure, be it public or private, we’ve always implemented the so-called lines of defence, with as much as possible a segregation of duties between the lines. In a command and control environment, this makes perfect sense. The big problem is that these structures tend to disenfranchise the process owners from their right and responsibility to be accountable for the good governance. By building additional control structures, we’ve taken away the burden of good usage of public funds by those directly responsible for its use. At the operational level, we may have actually reduced the direct feeling of responsibility for good use of means that we all pay for. At that point, the well intended cure becomes worse than the disease.
This is no longer about the process
Before anyone goes off on a rant about public sector, this appears to be one of the key failures of that mother of all private sectors, the banking industry. Too much power combined with too few direct responsibilities to the ultimate stakeholders leads to a real disconnection of the consequences of your actions. You will just think about you or those in your immediate vicinity. And any ex post control activity will either come to late or may not even detect what is going on until the exposure is significant.
If you factor into that the recent HBR article which states that one out of every two managers is terrible at accountability, it becomes clear that this is really no longer about the process. The process may be well tuned to situations where everyone is acting as a rational operator, but reality shows us time and again that that is not what is really going on in the workplace. Behavioral economist Dan Arlely has a wonderful quote up on Explore:
“If you think about the whole financial crisis, we’ve taken people and we’ve put them in situations which basically are guaranteed to blind or, at least, to distort their vision. And we expect people to overcome that.”
Developing true accountability
One way of developing true accountability is to make the process owners directly accountable to their ultimate stakeholders.
Now, I’m not talking about direct elections here, which are more of a popularity contest than anything else. No, I’m talking about establishing clearly defined metrics which are in line with the expectations of the ultimate stakeholders. The people responsible for the activities or the project are then asked to explain why they achieved certain scores, explain both why they did not meet expectations or exceeded them. The ultimate stakeholders can then either judge the competence and adequacy of the responsables themselves or transfer their votes to an expert which will do it for them. This process has been described at length by Steven Johnson in his excellent book Future Perfect: the case for progress in a networked age
To date, we have failed to do this in our political process, which explains the phenomenon of political free riders that abandon functions when accountability nears to aim for a higher, often better compensated function. I know this phenomenon is also present in larger corporate organisations.
Lessons from development aid
It’s my experience that development aid has a long history in developing metrics and evaluations for this type of situation. The Logical Framework, the Results Framework and other similar exercises are all examples of donors or agencies looking to establish accountability for results beyond the easily available metrics of the pure monetary aspects.
Perhaps the business world needs to look at what we have done … and perhaps they can take some pointers of our industry.
Exploring The Black Box 