Haiti ... What role for accountants in rescue, relief and rebuilding?

Dear Colleagues

Some time back ... not long after the start of the Haiti earthquake emergency I posted the following question to a LonkedIn group discussion "Accountants for Haiti" a subgroup of Haitian Development Professional Group.

What role for accountants in rescue, relief and rebuilding?

It is reasonable that there is little specific accountability in the rescue phase. The goal is simple ... to save lives. The strategy is to everything possible with whatever resources can be obtained ... and do it now. Rescue lasts a few days at most.

The relief phase starts immediately with the emergency ... all the basics are needed today, and in a few days everyone needed relief should have access to the basics of relief. In these initial few days there should be a strong accounting framework available and in use. Accounting should be in place as a vital tool in the management of resources and the accountability of everyone concerned.

Relief changes into rebuilding ... and if done well, the resources are used not only for immediate relief but to achieve a step forward in the process of rebuilding. The accountant needs to be fully involved with this, so that there can be good control accountancy, but also good analytical accountancy.

As things stand at the moment the huge value of donated professional time appears nowhere in the accounting ... while many institutions think that when they no longer have the money, something good has been done with it. This is plain ridiculous ... and accountants have to stand up and start to make a noise. I will do it, I hope others will join me.

As time has passed, it has become glaringly apparent that the issues raised in this message are not on the agenda of the main users of resources in the Haiti emergency program beyond making sure that the PR is in place. The subject of accounting and accountability is not a mainstream issue in the official relief and development assistance community, and, not surprisingly I have not been overwhelmed with responses.

But there is some progress. The following is interesting from James P. Andersen, Jr., Principal and Founder, Foundation Management Associates

I started a business 5 years ago, Foundation Management Associates, that provides outsourced accounting services to small non profits; those who are large enough to need the help of a controller or CFO, but typically can only afford a bookkeeper. One of my clients is a U.S Foundation that operates a 125 employee, 65 bed hospital in Fond des Blancs, Haiti, about 65 miles southwest of Port au Prince. This organization outsourced their financial management to my company, and we effectively serve as their internal accounting department.

I have decided to focus more of my attention on providing these services to other U.S. non profits operating in Haiti, because I feel there is a real need for them. We can assist these NGOs by helping them manage their foreign financial management needs, documentation flow, as well as management of of a major headache, the annual A-133 audit process.

We can also help our Haiti clients through our rather unique, virtually paperless, electronic accounting and financial reporting model that works particularly well for NGOs operating in developing countries. These services include assisting the NGO with establishing and managing effective internal control systems, utilizing processes that are simple to use by foreign accounting staff, and leveraging readily available technology that enables the U.S. client to maintain its foreign financial information and documentation in the U.S. in real time.

FMA provides a full range of accounting services, from bookkeeping to CFO-level services for just the amount of time needed each month. This model has proven very cost effective for our clients as our services are packaged at a price that is often no more than the cost of a good bookkeeper.

If anyone has any interest in pursuing this further, please feel free to contact me by email at andersen@fm-associates.com.

My take on this is simple. I like it ... I have responded publicly as follows:

Dear Colleagues

The Foundation Management Associates (FMA) initiative is a very sensible idea ... I like it.

I visited a small accounting firm in New York this week and found that they were doing a lot of work as the "accountant/CFO" for small business, and had a good business and doing something that was very useful. FMA in Haiti with focus on the not for profit NGO is a very good idea. I know of another organization in Haiti that is "doing payroll" for a number of organizations that have staff in Haiti doing emergency work but no formal corporate or organizational structure.

We are not quite ready ... but accounting for the NGO is not quite the same as accountability for the NGO. I want to see something happening where the NGO community ... and the organizations of the Official Relief and Development Community (ORDA) ... and providing meaningful accountability feedback to the interested public and stakeholders.

Community Analytics (CA) is developing as a way for some of the rigor of money accounting to flow into value analysis. I see accountability as the conversion of money and material resources into something of value for the beneficiaries ... value being either socio-economic progress, or improvement in the quality of life, or similar things. In CA value items are quantified using standards rather like cost accountants might use standard costs. Accountability takes into account the efficiency of the spend ... how much did something cost versus how much should it have cost.

As this develops I would like to collaborate in a mutually beneficial way.

Sincerely

Peter Burgess

While making the accounting better is a step towards better performance in the not for profit NGO world, it is necessary also to have the accountability better. This can be built around the accounting ... but is not just more and more detail in the money accounting systems, but a rather fundamental mind shift to value.

As Community Analytics (CA) has developed and evolved it has become clear that there is a need for organization and structure to enable efficient deployment. The work that FMA is doing is a natural complement to the work that CA should be doing.

Peter Burgess