Re: [GKD-DOTCOM] Local Governments Should Adopt a Business Model
Dear Mymoena Ismail and Colleagues: I do not know the legislation in South Africa, but it would be normal for the legislation to expect that entities account for every cent paid out and received. When there is reference to cash basis accounting it refers to how cash receipts and payments are handled in the accounts, and how invoices and accruals are handled. Most government systems ignore invoices and accruals...which is, in my view, a ridiculous situation...but legal for most government entities and funds, while being illegal since around 1880 for the corporate world. Talk about a double standard! When you talk about the South African Municipal Financial Management Act, does it require an entity to maintain balance sheet accounts and do its financial reporting with a full balance sheet as well as an income and expenditure statement? It might. Some progressive countries, notably New Zealand, have pushed forward to improve public sector accounting, but most countries firmly stick to weak and outmoded accountancy requirements that facilitate poor management of resources and grand corruption. Peter Burgess Peter Burgess Tr-Ac-Net in New York 212 772 6918 [EMAIL PROTECTED] The Transparency and Accountability Network With Kris Dev in Chennai India and others in South Asia, Africa and Latin America http://tr-ac-net.blogspot.com In a message dated 5/27/2005, Mymoena Ismail wrote: Not all local authorities work on a cash basis. In South African legislation (i.e., the Municipal Financial Management Act) requires local authorities to account for every cent spent and income received. The City of Cape Town recently implemented a SAP ERP solution to better manage its finances but also to ensure that there exists one back-end system to support all related e-governance projects. On Mon, May 23, 2005, Peter Burgess wrote: Following up on postings by Janice Brodman and Ed Cherlin ... the interesting thing about a company is that the stakeholders who are interested in its value look at both balance sheet and the profit or cash flow past and future. This is very helpful in thinking about what works and what does not. Governments (including local governments) do their accounting on a cash basis that cannot reflect the financial performance of the government entity in a meaningful way because expenditures that have life beyond the current period are essentially off the books. It is a weak system, and I am sure has stayed in vogue for that very reason. This DOT-COM Discussion is funded by the dot-ORG USAID Cooperative Agreement, and hosted by GKD. http://www.dot-com-alliance.org provides more information. To post a message, send it to: [EMAIL PROTECTED] To subscribe or unsubscribe, send a message to: [EMAIL PROTECTED]. In the 1st line of the message type: subscribe gkd OR type: unsubscribe gkd For past messages, see: http://www.dot-com-alliance.org/archive.html
Re: [GKD-DOTCOM] Local Governments Should Adopt a Business Model
Mymoena, Congratulations on the progress of your project. I am glad to see that ICT is really hitting home. Citywide ERP Solution? Wow! When I hear about corruption in Africa and other developing countries, I usually wonder how a country like the United States or UK would have been in the absences of the checks and balances from technology/electronic systems, yet dealing with the current 21st Century (SMART and sophisticated) human beings within the society. With that in mind, I'm really curious as to what the reaction of some of the politicians and local government leaders (including local elders) would be. Do they feel violated, disarmed or even colonized by these electronic systems? Mymoena, is it possible to share some of the real time social and political related implementation issues that you are encountering in this project. (I mean, let's assume that we are holding the technical/infrastructural issues constant for a moment, because there are myriads of them.) Thanks. Molly Egondu Uzoh Learning Right Technologies P. O. Box 51616 San Jose, CA 95151 Phone: (408) 531-1967 [EMAIL PROTECTED] At www.learningright.com we respect your right2learn the right thing, the right way; and at the right place, the right time and the right price. On Friday, May 27, 2005, Mymoena Ismail wrote: Not all local authorities work on a cash basis. In South African legislation (i.e., the Municipal Financial Management Act) requires local authorities to account for every cent spent and income received. The City of Cape Town recently implemented a SAP ERP solution to better manage its finances but also to ensure that there exists one back-end system to support all related e-governance projects. This DOT-COM Discussion is funded by the dot-ORG USAID Cooperative Agreement, and hosted by GKD. http://www.dot-com-alliance.org provides more information. To post a message, send it to: [EMAIL PROTECTED] To subscribe or unsubscribe, send a message to: [EMAIL PROTECTED]. In the 1st line of the message type: subscribe gkd OR type: unsubscribe gkd For past messages, see: http://www.dot-com-alliance.org/archive.html
Re: [GKD-DOTCOM] Local Governments Should Adopt a Business Model
In addition to helping local governments think in terms of delivering value (just as businesses must do), there are two other crucial elements that I think help deal with the concerns of Peter Burgess and Ed Cherlin. These elements have to do with using ICT to improve GOVERNANCE, not just GOVERNMENT: (1) Educating the community about its own rights and responsibilities, just as we've started educating stockholders about their rights. When citizens know their rights, and have access to information sources beyond the local elite, change can happen. Of course, we don't expect citizens to be auditors. But they can assess the value to themselves of local government activities. ICT can help to promote this aspect, by using Internet and other media to provide information. Often it will require an intermediary, like the citizen service centers in Brazil, which Gary Garriott mentioned. The centers' staff use ICT to tap into information databases to get the information requested by citizens. Of course, radio and other mass media can also be used, or a combination of Internet and radio, like the Kothmale Internet Community radio project in Sri Lanka, which takes questions from listeners, searches the Internet and broadcasts the answers. http://www.unesco.org/webworld/highlights/internet_radio_130599.html (2) Using effective change management methods that are effective in changing cultural values and beliefs. Anyone who has worked in organizational change knows that changing culture is extremely difficult. What works best is to REINTERPRET existing values rather than trying to replace them. For example, if the local government feels that their future lies in serving citizens and that using ICT (e.g., a website) would dilute citizens' sense that they are being served by government, you can help them see that ICT can INCREASE citizens' sense of being served. Or in the case of local governments that are concerned with the perks and prestige of controlling resources, you can show that ICT can promote prosperity in the community, and that the local government will have greater prestige. For local government officials who fear that ICT adoption will eliminate some government jobs, you can provide evidence that ICT does not reduce local government jobs, and often spurs an increase in local government jobs. Regarding Ed Cherlin's suggestion about a Sears-type local government -- I'm not sure I understand the suggestion, but I *think* he means that we strengthen local enterprises, and then have local governments support an infrastructure that facilitates e-commerce. If so, it's an interesting application of the ideas in my previous message. But to make that happen, local governments have to realize that they must be part of the overall effort to make their communities competitive and, eventually, more prosperous. Cheers, Janice -- Janice Brodman Director Center for Innovative Technologies EDC [EMAIL PROTECTED] On 05/23/2005, Edward Cherlin wrote: On Friday, May 20 2005, Janice Brodman wrote: I would like to propose what may be a somewhat radical approach to using ICT to strengthen local governments (LGs): We should be thinking of LGs -- and encouraging them to think of themselves -- as companies do. We have had some very bad experience of this concept in various levels of government. Too often, the company that government models itself on is Enron. :-( ..snip... Suppose we put all of this together. Create computer software and training in local languages for applications that will increase village income, such as e-commerce, and get the microbanks to place them (along with wireless Internet equipment) and make the loans for buying them, as they do with cell phones. Then let us see what kinds of health, education, and other programs we can deliver over these computers to increase local income further and faster, and how villagers can talk to each other about wider cooperation, including producer and consumer co-ops. Let us also see what kind of development portal we can create to sell to the no-longer-poor farmers and artisans and to their families. Do you think we can get a government to think of itself as the Sears and Montgomery Wards of more than a century ago? This DOT-COM Discussion is funded by the dot-ORG USAID Cooperative Agreement, and hosted by GKD. http://www.dot-com-alliance.org provides more information. To post a message, send it to: [EMAIL PROTECTED] To subscribe or unsubscribe, send a message to: [EMAIL PROTECTED]. In the 1st line of the message type: subscribe gkd OR type: unsubscribe gkd For past messages, see: http://www.dot-com-alliance.org/archive.html
Re: [GKD-DOTCOM] Local Governments Should Adopt a Business Model
Would it be possible to standardise on, (at least a minimal number if not one), a 'template,' given that all such bodies have at least: - one grant/capital source, - possibly a revenue stream - a time frame for fund utilisation, sourcing and collection - a structure or powers to distribute funds - likewise, to collect funds - capital or 'against grant' expenses - revenue or operating expenses, - ceilings/budgets against each head - targets for various activities in money-translatable terms - balances and variances from sanctioned figures - surpluses and deficits If so, it should not be difficult to develop a web-based accounting system, wherein an account is opened by each body on a server which can be accessed by various authorised persons, who feed information and receive reports according to the nature of their financial responsibilities. Accordingly, it would be possible to record, reckon and report, and hence to analyse, plan, control and staff each resource transaction. Such a system can further standardise a set of off-line data entry documents like vouchers or journals for efficient accounting. Regards, Udit Chaudhuri On Mon, May 23, 2005, Peter Burgess wrote: Following up on postings by Janice Brodman and Ed Cherlin ... the interesting thing about a company is that the stakeholders who are interested in its value look at both balance sheet and the profit or cash flow past and future. This is very helpful in thinking about what works and what does not. Governments (including local governments) do their accounting on a cash basis that cannot reflect the financial performance of the government entity in a meaningful way because expenditures that have life beyond the current period are essentially off the books. It is a weak system, and I am sure has stayed in vogue for that very reason. ..snip... This DOT-COM Discussion is funded by the dot-ORG USAID Cooperative Agreement, and hosted by GKD. http://www.dot-com-alliance.org provides more information. To post a message, send it to: [EMAIL PROTECTED] To subscribe or unsubscribe, send a message to: [EMAIL PROTECTED]. In the 1st line of the message type: subscribe gkd OR type: unsubscribe gkd For past messages, see: http://www.dot-com-alliance.org/archive.html
Re: [GKD-DOTCOM] Local Governments Should Adopt a Business Model
On Friday, May 20 2005, Janice Brodman wrote: I would like to propose what may be a somewhat radical approach to using ICT to strengthen local governments (LGs): We should be thinking of LGs -- and encouraging them to think of themselves -- as companies do. We have had some very bad experience of this concept in various levels of government. Too often, the company that government models itself on is Enron. :-( I have a different idea. Let us make our NGOs into companies, like the microcredit institutions, and like the organizations that help poor artists and craftspeople sell their wares on eBay and Overstock.com, and like ITC in India, which puts computers into villages so that farmers can see world crop prices at no charge. ITC also offers to buy at prices publicly pegged to the Chicago Board of Trade, thus increasing farm income and (they say) getting better quality product at lower cost than the alternatives. Suppose we put all of this together. Create computer software and training in local languages for applications that will increase village income, such as e-commerce, and get the microbanks to place them (along with wireless Internet equipment) and make the loans for buying them, as they do with cell phones. Then let us see what kinds of health, education, and other programs we can deliver over these computers to increase local income further and faster, and how villagers can talk to each other about wider cooperation, including producer and consumer co-ops. Let us also see what kind of development portal we can create to sell to the no-longer-poor farmers and artisans and to their families. Do you think we can get a government to think of itself as the Sears and Montgomery Wards of more than a century ago? -- Edward Cherlin, Simputer Evangelist Encore Technologies (S) Pte. Ltd. The Village Information Society http://cherlin.blogspot.com This DOT-COM Discussion is funded by the dot-ORG USAID Cooperative Agreement, and hosted by GKD. http://www.dot-com-alliance.org provides more information. To post a message, send it to: [EMAIL PROTECTED] To subscribe or unsubscribe, send a message to: [EMAIL PROTECTED]. In the 1st line of the message type: subscribe gkd OR type: unsubscribe gkd For past messages, see: http://www.dot-com-alliance.org/archive.html
[GKD-DOTCOM] Local Governments Should Adopt a Business Model
Dear GKD Members, Thanks to all participants in this discussion. I've found it extremely interesting. I would like to propose what may be a somewhat radical approach to using ICT to strengthen local governments (LGs): We should be thinking of LGs -- and encouraging them to think of themselves -- as companies do. LGs provide services for citizens, who are their customers -- and are also their stockholders. Thus, citizens have a conflicting role. On one hand, as customers, they want high quality services. On the other, as stockholders, they want to keep costs down. ICT can help LGs do both. ICT can improve the efficiencies of back-office operations by squeezing out waste. And ICT can improve services to citizens. I think Ed Malloy made a crucial point in saying that the latter -- serving citizens -- is more important than the former -- simply improving operations for its own sake. There are several important implications that derive from this approach: (1) LGs must become more customer-focused. No viable company invests in improving operations to produce something that customers don't want. LGs have to learn to operate on the same principle: identify the needs of their customers/citizens, and base ICT adoption on fulfilling those needs. It sounds obvious, but we've all seen innumerable development projects that help LGs adopt ICT to do something without any clear input from citizens on their priorities. How can LGs become customer-focused? There are plenty of tools: surveys, community meetings, etc. LGs should be encouraged and helped to use appropriate methods to gauge the needs of their citizen/customers. It is not enough simply to promote the concept. LGs need specific tools and understand how and when to use them. (2) LGs must become more strategically competitive. Small and medium enterprises (SMEs) in most developing countries have difficulty peering over the edge of their own community/country and understanding the world market in which they are competing (knowingly or unknowingly). A major thrust of economic growth competitiveness projects is to help SMEs understand where their competitive advantage lies and how to strengthen it to compete in the global markets. LGs need to learn the same. Most LGs have no notion that they can use ICT to significantly increase job/business opportunities in their community. They need to understand how they can use ICT to promote jobs and entrepreneurship opportunities in their constituency. Every local government can and should be using ICT to do so. This is where development support can be extremely valuable. We should be helping LGs identify the levers they can use to promote business development in their own backyards, whether they are Provincial governments, districts, or municipalities. Some of these levers involve promoting an enabling environment within the locality. For example, LGs -- even municipalities -- can address data protection issues even if the national government has failed to do so. Enabling environmental initiatives can be crucial to attracting investment that provides business/job opportunities. Other levers are more industry/cluster/enterprise-based. All too many LGs (with donor support) pursue industry/cluster-support strategies that are inappropriate and will be ineffective. Many of those strategies are simply copy-cat approaches -- initiatives that are hot elsewhere but are not based on the particular community's competitive position. For example, many cities are providing tax breaks to companies setting up call centers; yet even with low costs, many of these call centers are doomed to failure -- they simply lack an overall competitive advantage with other locations. LGs need to do exactly what companies must do: understand their competitive advantage and how to utilize it strategically. There are yet other levers. For example, LGs need to understand their revenue base, and that means understanding such things as capital markets so that they can foster businesses that will create sustainable economic growth. (3) LGs need to operate cross-sectorally. Donors can afford to operate in sector silos: education, health, economic development, etc. LGs cannot. For example, LGs have to understand how education/training of the local workforce affects local economic growth in the short- and long-term. They must be able to use ICT to link across education and economic development sectors in ways that will strengthen local businesses. (4) LGs need to squeeze out inefficiencies. Like businesses, LGs have a value chain that provides services. They should be able to analyze their value chain and identify where they can use ICT to reduce costs and maximize impact. Frankly, I don't buy the notion that LGs will not reduce inefficiencies because they have too many staff. Rather, I would argue that the problem is that the staff are doing the wrong things. There's plenty for LGs to do -- more than current staff could possibly handle. If ICT can help
