Doug Haddden, VP Products

Many of us in the technology business have a visceral belief that Information and Communications Technology (ICT) can help drive country growth. [Sometimes called ICT for Development ICT4D with the major subset of M4D, Mobile for Development.] There are many outside the tech world who look at this believe as naive at best, misguided at worst. The skeptic can demand evidence and suggest that evidence provided is non-scientific, anecdotal, misleading, or doesn’t prove cause and effect.

Meanwhile, the evidence and lessons learned continue to mount.

And, practitioners continue to experiment and build good practices.

And, overcome challenges.

A case in point is the webinar hosted in Washington on this subject. Although there may have been some overly enthusiastic speakers with a touch of hyperbole, it was clear that speakers were far from naive.

That practitioners understand, accept, embrace and overcome ICT4D challenges.

ICT Innovation, Entrepreneurship for Growth via Government Intervention

Webinar earlier today provided lessons learned, challenges and opportunities to close the digital divide, build education, improve health and job creation.

Storified by · Thu, Feb 28 2013 08:45:18

Doug Hadden, VP Products

As described in a post yesterday, I’ve been working on a paper for the Association of Budgeting and Financial Management (ABFM) conference in October. I’ll be on a panel discussion on October 15th on Online Expenditure & Performance Reporting.

The premise of the paper is that government budget management is modernizing to “Budget 2.0″ that leverages Web 2.0 technology and social media. The roadmap to Budget 2.0 includes:

• Budget Preparation including the process for creating and approving budgets
• Oversight including internal government and external stakeholders
• Citizen Engagement includes methods of communicating to external stakeholders
• Transparency Mechanisms leveraged by governments
• Budget Comprehensiveness including all government tiers, parastatal organizations and coverage of all revenue and expenditures
• Accounting Methods from cash through accrual accounting
• International Standards Support for public sector and transparency standards
• Policy Formulation including the process of building policy and aligning policy to budgets
• Budget execution including how execution is controlled to meet budget objectives
• Government Communications Medium from published documents through to open data
• Timeliness on information provided to parliaments and citizens

The following shows the work in progress.

Budget 2.0 Roadmap Interaction

Budget Preparation Modernization

Towards participatory budgeting

Oversight and Engagement Modernization

Towards citizen oversight

Transparency Mechanisms Modernization

Towards open data

Budget Comprehensiveness Modernization

Towards treating whole of government as an enterprise

Budget Execution and Accounting Method Modernization

Towards true value of government and government performance

International Public Sector and Technical Standards

Towards true financial comparison between governments

Timeliness

Towards timely data to enable timely decisions

Policy Management

Towards participatory policy

Doug Hadden, VP Products

Why should governments move to accrual accounting? To international standards? These were some of the themes at the first annual international CIPFA (The Chartered Institute of Public Finance & Accountancy) conference on trust and accountability in London last week.

[My presentation audio from the video on lessons learned in GRP in developing countries has some problems, but the full slideshow with script is available.]

David Walker, the former comptroller general of the United States spoke about misleading public accounts and the lack of financial transparency.  An upcoming study with Standford University and Walker’s Comeback America Initiative will show that New Zealand, the first country to adopt accrual accounting, leads in fiscal transparency.

Ian Ball of the International Federation of Accountants (IFAC) spoke about the move to accrual accounting in New Zealand. Although accrual accounting exposes political expediency, it leads to much better decisions according to Mr. Ball who showed how the value of the Government of New Zealand has increased over time until the financial crisis.

Dr. Ionnis Sarmas described the public debt crisis in Greece. Dr. Sarmas showed how subsequent audits increased the debt estimate. Financial controls were not observed. Professor John Fitzgerald described the public debt crisis in Ireland and the lack of effective oversight in the financial sector. He pointed out that Germany has decided not to adopt even modified cash accounting.

Here are some takeaways:

• The lack of accrual accounting enables governments to “cook the books”. In particular, governments often show pension investments as assets but do not count the present value of pension obligations or entitlements.
• The use of different standards makes it difficult to compare governments around the world and can hide systemic weaknesses.
• The lack of multiple year planning in many countries provides too short a window for substantial change.
• Many vehicles used for managing public finances are dubious from an accounting perspective. As David Walker says, Trust Funds in the US Federal Government are not funded and no one trusts them. There is also concern about the magic bullet of Public Private Partnerships (PPPs). Governments often absorb the liability should the private sector partner fail.
• Perhaps developing countries, like Timor-Leste, will leapfrog more developed countries, on this road to international public sector accounting standards.
• Trust and accountability means that the population needs to see the books. Politicians and public servants need to understand the long-term implications of public policy.

Doug Hadden, VP Products

There is nothing more difficult to carry out, nor more doubtful of success, nor more dangerous to handle than to initiate a new order of things.

Niccolo Machiavelli

Last year, a gentleman attending my Financial Management Institute presentation on government performance management sat attentively with a rather bemused look on his face. He’d heard it all before. The enthusiasm for some technology-driven change. Some technology adoption, but no change.

I reflected on this a few months ago suggesting that open government isn’t “getting any respect“. As I said about change:

Change is not easy for large organizations. We’ve written about the skills necessary to lead Government 2.0 change. And there any many examples of culture change and Government 2.0 adoption.  Change is unevenly adopted.  That’s why we talk about early adopters. There is a culture of expertise in large organizations. Knowledge is power in traditional organizational structures. So, we cannot expect widespread immediate culture change. At the same time, we cannot expect that no change will occur.

We’ve Got Government 2.0 All Wrong

The Government 2.0 adoption debate centers around assumptions for technology-induced change:

1. Narrow categorization view: we debate about the differences among technologies like Government 2.0, e-Government, and collaboration, so we don’t see the real trends
2. Narrow time view: we debate about cause and effect over very short periods of time, so we don’t register the change effects
3. Narrow technology view: we debate about the technology in isolation of other societal drives, so we don’t see the results in cumulative

Historical Perspective

Government structure, culture and mandates are in constant flux. Harold Innis described how empires were structured and developed based on dominant method of recording and communications whether stone, papyrus or velum. Marshall McLuhan described how the technology medium results in societal change.

Getting Government 2.0 Effects Right

It’s not a question of whether Government 2.0 will or will not be adopted. Or whether it will or will not have a material transformation on government. Government 2.0 is another signpost in government change. So, the question really is: Will Government 2.0 be able to keep up with the change or not?

Technology-Induced Change in Government

• Movable Type/Printing Press: generates rise of the “nation state” as languages become standardized and people begin to identify with ethnic and “national” characteristics
• Radio: generates rise of government dominance in communications from Roosevelt’s “fireside chats” to incendiary propaganda
• Television: increases the scrutiny of government from political debates to war reporting
• Photo-copier, fax, personal computer, mobile technology, blogs: gives individuals publication capabilities to extend discussion creating new pressures for government transparency and accountability. It also enables groups with affinities to self organize. (Also appears to enable the move to supra-national institutions and the devolution of the nation state to accommodate regional, ethnic, religious and language groups.)

The Trends of Change

Transparency has become a meme for government. It’s in almost every political debate and promise.Government 2.0 is one of may technology signposts in the long term change in government to:

• Higher levels of participation in policy and operational government by citizens, whether in participatory budgeting, idea factories or political campaigns.
• Increased focus on outcomes away from inputs and outputs as the main driver for government spending – away from what the money was meant to accomplish to what it really did.
• Collaborative government with multiple government tiers, international organizations and the private sector whether in response to fiscal crisis, trade liberalization or public-private partnerships
• Flattening of organizations to enable more efficient and effective public services whether through one-stop services, on-line services or shared services

Government 2.0 is a vehicle for higher levels of participation through on-line communities. The use of mashups and other techniques enables the focus on outcomes. (This was the main theme of my presentation last year.) Collaboration is enabled through Web 2.0 tools like wikis.

So, in the end, when we look back at this transformation in government, we may call it Government 2.0, or we may call it something else.

Blog postings for the PFM Knowledge Transfer series have been updated with notes, images and presentations from the 23rd Annual ICGFM Conference.

The knowledge transfer information includes:

1. Introduction and References
2. History of Public Financial Management Reforms
   • current cycle of PFM reforms
   • sequencing PFM reforms
   • how the financial crisis is accelerating PFM reforms
3. Benefits of IFMIS
   • enabling government reform
   • improve efficiency and controls
   • improve conficence through transparency
   • reduce costs
   • improve budgets, planning and decision-making
4. Acquisition Practices
   • build or buy
5. Implementation Practices and Project Management
   • implementation practices lessons learned
   • project management
   • government ownership
   • planning and benchmarks
   • building the government team
   • role of IT
6. Implementation Sequencing
   • implementation success factors
   • issues and reasons for sequencing
   • implementation and roll-out phases
   • post implementation changes
   • diagnostic tools
7. Capacity Building
   • coordinating training and implementation plans
   • capacity development
   • staffing and skills
8. Subjects in PFM – Procurement, Budget Planning and Performance Management
   • procurement
   • budget planning
   • performance management
   • public private partnerships (PPP)
9. Transparency and Accountability
   • need for transparency
   • budget transparency
   • forms of accountability
   • service transformation
   • elements of good governance and transparency
   • international benchmarks – lessons learned