So I've learned new things about being an accountant in nthe field for an NGO.

For the last week I've been in Uganda observing the work of accountants working for GOAL, Irelands equivalent to Oxfam.

What surrises me here is the level of detail they go into here with people on the ground to ensure that all money and spending has been properly documented.

A couple of days ago I even watched internal auditor Jerry Cole question a local woman in the remote northern town of Kalongo over whether she had received all 25 goats the charity had provided, where they were and how they were. I was surprised at the tough line of question for her and for the local GOAL workers involved in the animal husbandy programme here.

Then there are the processes put in place by programme managers for things like contract tendering abd for aid prosoals for local partner organisations. All of them detailed, rigorous and capable of soaking up time.

The question I can't help asking is how you strike the balance between having the right processes to achive the things you want to achieve, on the one hand, and providing the aid in a timely manner on the other.

That's a tough one. You wouldn't want to think that aid could be slowed down by an over bureaucratic process.

Out here though the accountants and administrators appear very much aware of reaching the right balance. Their focus appears to be to focus on integrating processes with the provision of aid so that one serves the other.

Financial controller Janet Humphrey insists that she wouldn't have processes in place for no reason and that they should work in a timely manner. The watchwords for NGOs accountants in the new millennium, she says, are accountability, accountability, accountability.

With that in mind the tension between processes and delivery will always remain. It's part of the FC's job to ensure they don't get out of control.

November 30, 2007 | Permalink | Comments (0) | TrackBack (0)

OK this is going to be something of a confession. I'd always thought that, while NGOs did a lot of worthy work, they were probably guilty of throwing money away. What they could do with is some decent accountants asking some tricky questions about where the money has gone.

Well, they have, and they do. I'm currently in Uganda to see the work of controls officers, financial controllers and internal auditors in the field with GOAL, Ireland's equivalent to Oxfam (don't ask me why I'm not seeing this kind of work somewhere with Oxfam, they didn't invite me).

Ravaged by war in north with the Lord's Resistance Army (more or less a cult professing to be fighting to return the country to the true spirit of the Ten Commandments) and probably still recovering from the Idi Amin years, Uganda is a country is transition, though still very much in need of aid.

Yesterday, I travelled four hours east from the capital Kampala to Bugiri with John Sheahan, controls  officer with the charity here. Bugiri is a rural district where GOAL works with local partner organisations providing funds and technical support. The partners however make pitches to GOAL and deliver the work. Once you get GOAL's backing however, you deal with John.

I watched him sit in a tiny office in a dust covered town and discuss contracting a local auditor, examine the cash book, go over reconciliation statements and generally test the partner group's accountant on record keeping and procedures. GOAL doesn't tell partners what procedures to have, but they do insist they have something and that they hold water. It was a display any accountant steeped in the need for strong controls could appreciate, an impressive performance and completely dispelling my rather ill-thought attitudes to charity finance.

Even this far from home there is still room for financial rigour.

More on Uganda later.

November 28, 2007 | Permalink | Comments (0) | TrackBack (0)

Douglas Flint, FD at HSBC, finds himself in a spot of bother this week - one particular investor doesn't like way executive pay was disclosed in the bank's accounts and is somewhat offended by the bonuses board members seem about to receive.

Odd one this. Most complaints about pay relate to the size of salary. But Eric Knight of Knight Vinke is more concerned about proper disclosure . Can't blame him for that.  Though I can't help feeling that if Flint really has sorted out the sub-prime crisis HSBC found itself in, he is worth every penny to the investors. The FD of another high street bank I sat next to at a dinner recently told me that despite everything HSBC was a terrific business and rated Flint very highly indeed.
But Flint also chaired the review of the Turnball guidance on internal controls, on behalf of the Financial Reporting Council, and has also served on the Accounting Standards Board. If anyone knows how to disclose remuneration properly, he should.
Which is what makes Knight's critique so biting, and no doubt caused Flint some considerable discomfort. How do you lecture everyone else on governance while being accused of inadequate disclosure yourself? Tough one, wouldn't like to be Flint's shoes.

November 23, 2007 | Permalink | Comments (0) | TrackBack (0)

So we learn this morning it was not a lone gunman.

What I mean to say is, we learn that the 25m child benefit records lost by HMRC were not mislaid by a single IT junior, but placed in the post only after managers had given the all clear for the hapless computer whizz to download all the data onto discs and stick them in the post.

So not only did our hero break HMRC rules, but so did his managers. I return to my earlier point, the staggering loss of all those records was not the work of a lone individual working in solitary ignorance of all rational thought, but that individual had help in making such a solid gold blunder.

Yesterday, I was reading the biography of Gerald Ratner who, as we all know made a speech remarking that his products were 'total crap', ending his career and bringing down the jewellery business he ran. That speech has been ranked as one of the worst blunders in corporate life. I think we can now rank the HMRC fiasco a notch or two higher. Simply because a group of people, not a lone individual, but a group, contrived to deliver perhaps the worst loss of government data in modern times.

November 22, 2007 | Permalink | Comments (0) | TrackBack (0)

Can I afford to be sympathetic toward Paul Gray this early on in the scandal over HMRC managing to lose the  records of 25 million people?

Paul Gray, you must all know by now, was the HMRC chairman who resigned yesterday (Tuesday) over the loss of the data. It was an astonishing failure, but I can't help feeling sorry for Gray.

Here's why. Though there were rules in place, guidelines established, absolute prohibitions set, some IT lunatic took it upon himself to ignore all common sense and burn the data to a couple of discs and pop them in the post for the National Audit Office, only for the discs to go missing en route.

If you are a leader you can't quite legislate for the office maniac who ignores all the rules and does something that reaches the absolute pinnacle of stupidity.

Paul Gray is not alone in this. Think of Barings Bank, the classic business example, brought crashing down by Nick Leeson sitting in Singapore acting in a manner that not only defied his pay grade, but all accepted notions of rational behaviour.

Go back in history (this one's a stretch, so bear with me) and think of the Spartans at Thermopylae undone by a disgruntled shepherd who led the Persians through a mountain pass.

I can't help thinking therefore that leaders are at the mercy of juniors who become loons overnight, insignificant individuals who demand not a second thought but somehow manage through fate, ill fortune, spite or sheer ignorance to tip the balance in favour of catastrophe.

Paul Gray was well liked by the profession, and HMRC insiders, and looked as if he was on the way to sorting out many of the problems that have beset the taxman of late. He will be sorely missed and but for one lone madman (OK, there should have been a system alarm triggered by any efforts to download such a mass of data) he might still be in place.

As one former Revenue chairman said to me yesterday: 'There, but for the grace of God...'

November 21, 2007 | Permalink | Comments (0) | TrackBack (0)